Focus on building a strong engineering team & strategy.

Takeaways:

• CTO v/s Head of Engineering: In the early stages of a startup, the role of CTO & Head of Engineering would most likely be merged. As the startup grows, however the two roles branch out and a clear distinction is needed. CTO is more outward focussed & would have a seat on the table with the rest of the business leaders of the company. Head of Engineering is more inward focussed and hands-on, working with the teams to closely for architectural decisions etc.
• Framework to observe performance of an Engineering Leader : According to Jey, one can measure the performance of an engineering leader by looking at attrition rate of the engineers, reliability & resiliance of the product (crashes, app store ratings) & architectural flexibility they show in keeping the product together.
• How to hire an Engineering Leader : 5 main things to look at are : Relevant experience (avoid too small scale or too large scale experiences), Sourcing (ideally via referrals), Spend enough time ( enough stakeholders - ideally cross functional should spend time with the candidate), 360-degree panel ( ) & reference checks (Jey recommends blind reference checks).
• Importance of Chief of Staff Role : Naren feels at early-stage such roles are great as it helps the CEO manage and scale their time in the best way possible. The person essentially becomes the confidant of the CEO and this role becomes a larger part of the head of strategy responsibility. A 'pitch hitter' in a team full of specialists.
• OKRs: Very important to provide transparency to entire company & align the organization with both goals. Some product metrics that Flipkart tracks are : Platform hygiene (solving for Priority 0 bugs, Uptimes, security bugs) & Customer growth (MAUs, DAUs, Retention / churn metrics). Concurrent engineering metrics support these product metrics.
  • Flipkart has been using OKRs for the last 2-3 years ; Naren & Jey both agree that it is a multi-year journey.
  • Eventually every company should ideally get to a place where every single person within the organization is able to write their OKRs and link it all the way to the CEO’s OKR.
• In Flipkart, Strategic Planning leads to —> Annual Operating Plan /Budget leads to**—> OKRs**
  • Starts in the 2nd half of the year (after Big Billion Day) & is inclusive with top-down(CEO + 2/3 levels down) & bottom up approach (Business Unit inputs) —> all with a rolling 3 year cycle.
  • Once the process is completed, it is synthesized by the central team & presented to the board by December.
  • Budgeting starts towards the end of strategic planning —> factors in the growth & profitability goals for the company. After a back and forth with finance & strategy teams, OKRs start getting planned.
• For early stage companies, the focus should be on what the founder's priorities are. As the company scales up, additional layers can be built along the way.

Notes:

1. The roles of a CTO and an engineering head may be merged at an early-stage startup, but as the company grows, the two roles branch out and a clear distinction is created. CTO at a large company is someone who would have a seat at the table along with the rest of the business leaders to be able to represent engineering in a meaningful way so that an engineering lens is applied when the company’s strategy is being worked on. On the other hand, the engineering leader’s role is typically more inward-focused. They would play the role of an operator with the focus being on maintaining technology hygiene of the product being developed, working with the teams closely for architectural decisions, design elements of the product being built.

2. Here are some ways to check if the engineering leader is scaling with the company or not:

   • Attrition rate: Engineers get frustrated when there isn't a clear direction. So if there is a high level of churn in the engineering team, it’s a sign that the interfacing role that the engineer has to play is effectively creating a clear roadmap for the short to medium term is not happening. That’s one metric Jey encourages founders and the board to look at.
   • Reliability and Resilience: The other aspect would be in terms of reliability and resilience metrics of the products by the company. If the founder notices increasing angst in customers, that’s a sign. For a B2C company, one could watch out for metrics such as crashes per every 10,000 sessions on the Play Store and the App Store. and reviews and ratings by customers.
   • Architectural Flexibility: The third metric is somewhat difficult to measure but easy to figure out in practice. If the codebases are evolving in unsustainable ways, the founder would notice that incrementally it becomes more and more difficult to add new features and evolve the product. That’s a clear sign that the product is being built through a whole lot of patches, thereby slowing down the velocity of new feature development for the teams.

3. How to hire an ideal engineering leader: 5 things to look at :

   • Experience is important: For second-level management, you would have had some reasonable level of ability to hire and retain people, manage organizations, and be able to inspire people. While hiring, one should look for past experience that demonstrates the candidate is aligned with these traits. Figure out if they have been part of companies where they have managed teams at that scale. Understand if the candidate has worked on products that are at a scale that the founder envisions their products to be in the next 2-3 years. “Don’t look for people who have worked with very small scale or very large scale because both extremes are not a good idea. Find a sweet spot and look for people who would take the company forward in the next two years of scaling,” says Jey.
   • Candidate Sourcing: Founders should rely on references for potential candidates rather than cold sourcing especially because this would be a senior leadership role. “If the founders are fortunate enough to be funded by Accel or the Seed to Scale program, they can also rely on the network on people supporting them from the community for referencing,” adds Jey.
   • Spend enough time: The founders should spend enough time with the candidate in both a formal and informal setting to build that rapport and comfort. Even other key stakeholders of the company should ideally spend some time with the candidate and feel like they can relate to this person. That’s because one of the key aspects for an engineering head is to abstract the technical complexities and be able to convey it to the business side so that decisions can be made keeping the engineering aspects in mind.
   • A 360-degree panel: At Flipkart, we usually have a 360-degree panel for the interviewing process with each person on the panel looking for the same competencies so that there is a comparison across candidates. For instance, if I am interviewing for an HR role, I see if the person is data-oriented, have they thought about technology as a level to transform functions, if they have the ability to manage and champion change, are they risk-taking, etc. An ideal candidate should be OK even if a junior employee interviews them.
   • Reference checks: These are extremely important. Apart from the references provided by the candidate, Jey recommends blind reference checks, too. This would include someone who has managed the candidate, someone who has been managed by the candidate, and someone who has been a peer to them. “Can't stress on the importance of blind reference checks,” says Jey**.**

4. The importance of a Chief of Staff for the CEO at an early-stage startup: Naren feels at early-stage such roles are great as it helps the CEO manage and scale their time in the best way possible. The person essentially becomes the confidant of the CEO and this role becomes a larger part of the head of strategy responsibility. A 'pitch hitter' in a team full of specialists.

5. How to hire the right Strategy Head :

   Even though a strategy person comes from different types of backgrounds, the most standard route tends to be somebody who has come through consulting, or management consulting, business or quantitative backgrounds

   The primary key, however, is the diversity of experience. “Particularly in a startup where you're minimizing the number of hires that you are making, it is ideal to have somebody who can play multiple roles as the startup itself is going through several iterations.” is what Naren said.

6. Strategic Planning Process at Flipkart : The strategic planning begins right after their annual flagship sale event - Big Billion Days - which is held around September or October. They try to make the process as inclusive as possible with a broader set of leaders, the CEO and employees who are two to three levels down. Naren breaks it down below :

   • Their process includes a top down component where there are certain central sources of information around market growth, share, views on primary competition and so on - which can be synthesized centrally.
   • This can be augmented with BU specific bottom up views on where those respective functions are going from a from a three year process.
   • Once these processes are completed, usually over 1-2 months, then a central team can then synthesize all of this into what we finally call the published company strategy.
   • After this, we also share this with our board during the December meeting and validate it.