Neeraj Aggarwal , Co-Founder and COO xto10x Technologies chats with Amit Somani , Managing Partner Prime Venture Partners .

In this episode, you will learn what company operating system entails, best practices on people, org and culture and Neeraj’s stint at Flipkart and Eat.fit.Neeraj has played a key role in scaling two of the most talked-about companies in the Indian start-up ecosystem. At Ekart, his team made several breakthroughs in both service quality and cost, achieving 99%+ perfect delivery and doubling productivity across all facilities almost every year. At Eat.Fit, he built on his experience both as an operating leader and as a people leader - scaling the Eat.Fit business as well as leading the People Operations function at Cure Fit.

Listen to the podcast to learn about

0:45 - Neeraj’s journey from a corporate job to an early stage startup

2:30 - How xto10x helps growth stage startups

6:00 - Working sessions & decision making sessions. How to use them effectively at your company

7:35 - L0-L3 metrics. What do they mean?

9:53 - ‘People forget that company itself is a product.’

12:20 - How a company manifesto makes the founder more accountable 14:50 - How to make a really strong operations org

Read the complete transcript below:

Amit Somani 0:22

Welcome to the prime Venture Partners podcast. I’m Amit Somani, one of the managing partners. We are delighted to have with us Neeraj, Co-Founder and COO at xto10x. Neeraj, welcome to the podcast.

Neeraj Aggarwal 0:33

Thank you so much Amit. Pleasure to be here.

Amit Somani 0:35

Neeraj, love to know a little bit of your story before xto10x. I know you were at Flipkart and you were at Eat.fit, maybe a little bit of your story and then the story behind xto10x.

Neeraj Aggarwal 0:44

I’ve been working for a really long time actually. I started working in 2001, finished my engineering then my MBA and started working in 2001. And my career really had two broad phases. My first 10 years were in technology firms, in India. I worked with companies like Oracle, Satyam, Capgemini was my longest stint. But in 2011 it was clear that, that is not something that I was willing to do, for the next 20 years of my life. And that’s when I made a shift. I joined a very-very early stage startup in Hyderabad. It was an internet company, I love what they were trying to do. And it gave me an opportunity to do something very different. I actually jumped into operations in that company, and that essentially made opening up 120 stores in tier two, tier three India, it meant hiring 500 store staff, training them up, getting them ready to hit the shop floor, setting up the entire supply chain in terms of warehousing set up, the logistics network, the returns team, the customer service teams, did all that for about a year and a half and I just absolutely love that experience. Unfortunately, that company didn’t go too far. And in 2013 beginning, I joined Flipkart. It has to be one of the most privileged experiences of my life, the next four and a half years. I joined their supply chain team and continued working the supply chain team for my entire stint there, did almost everything there. From last mile, to transportation, to warehousing and by the end managing entire supply chain, operations and supply at Flipkart. In 2017, I moved on and joined Cure.fit, as GM for the eat.fit vertical. So we set up their kitchen, the entire business and grew to about 25,000 orders a day. Absolutely amazing journey at eat.fit as well. And finally, at the end of last year, when xto10x happened. And I jumped into xto10x, with Saiki and Binny, two people that I respected deeply from my Flipkart days. What we trying to do with xto10x now is, really help startup scale. We’ve realized in our journey in the ecosystem for about eight, nine years now that there are two distinct phases. Zero to One phase the companies has, which is about product market fit, and then there is a 1 to 10 phase which is about scaling up. And that’s the part of the journey where I think people struggle a lot. And there isn’t enough contextual advice or enough contextual help being given to people, to navigate that really tricky part. You go from being very creative with zero to one phase to actually now rolling up your sleeves and having to run an org., having to hire people, having to manage OKR, having to manage goals, metrics, having to manage the board, I think it can become extremely daunting. And we felt it with our experience in the ecosystem of the last 10 years largely in the operating roles that we played, we felt that we could make a big dent here. And that is what xto10x really aims to do.

Amit Somani 3:14

Wonderful! So that leads me to my first question for the podcast. You guys have a term that you call company operating system, maybe you can talk a little bit about what that entails. And obviously, we’re talking about growth stage startups, typically, Series B plus kind of stage but maybe you can start there.

Neeraj Aggarwal 3:29

Well, the pilars we identified for a company, that we think are really important for to scale well, this is what we call the third pillar in our journey. The first two were really the strategy in the business design and the org design. We believe that once you’ve got those right, that’s when you start thinking about how do you run the company well from within. If the leadership layer and the founders and the org design are the hardware of the company, we say the company operating systems is the software for the company. This is the part that allows you to function and run the company really-really effectively. And I think there are several parts to it. First is, once you’ve got the big goals identified, how do you make sure that those goals are translated to a very clear execution roadmap for everybody in the company. We very strongly advocate use of OKR for example, in being able to convert your strategy into execution deliverables. We strongly advocate the use of working sessions and decision sessions for companies to be able to debottlenecking decision making. We also say that if you don’t have a chief of staff please hire a Chief of Staff, somebody, who can run this entire project for you very effectively. The second element of company operating system, what we call the business finance intervention, I think you’ve got OKR set up, how do you make sure that the core metrics of the company are drilled down to a level that can actually be executed by people on the ground. So taking the L zero metrics and drilling them down to the L3-L4 Level, in terms of input metrics and what we call the L-zero to L-3 cascade, run very effectively in our experience in companies like Flipkart, Cure.fit by the team called the business finance team. If you don’t have a team like that, strong advice, please put in a team with that to help you very-very early on. The third element of this is understanding the customer journey really well, as you are scaling up, one of the things that you will keep facing a lot of is customer retention not being great, customer NPS falling. And a lot of times people are struggling with why that is happening. At Flipkart the best practice of what they call the NPS attribution framework which essentially said, here are the 10 things that actually move your NPS and this is how much you can move it by if you have that level of understanding then you know what sort of levers to pull at what point of time. And the fourth element is what we call communication in the Org. I think as you’re scaling very quickly, people start to feel that they do not know anymore what’s going on with the company. They don’t know anymore what are the big objectives the company is changing. They see the level of disconnect from what they’re doing and what the company is going after. So we strongly advocate a very strong communication forum in the company, whether it is all hands, whether it is one on one, whether it is office hours.

Amit Somani 5:49

So lots of gems of insight in there. Let me try to piece things apart a little bit here. So one thing that you mentioned that caught my attention was working sessions versus decision making sessions. And often, you assume that most kind of decision making thing happens as a combination of a working session and decision making session. Can you elaborate a little bit on that?

Neeraj Aggarwal 6:09

Sure Amit, typically decision session flow only when you are absolutely ready! to get a go or no go session form a team that matters. Working sessions are various sessions when you invite the leadership team for problem solving work. Let’s say you’ve got a big initiative that you want to go after that you think may have merit, but you still have to sketch out what the details of the initiative would look like. Definitely invoke what is called a working session and invite the right leaders to come in and spend time with you in carving out the solution. Once you think you’ve got a blueprint of the solution right, once you think you’ve got the impact assessment right that is when you call a decision session, typically not more than 15 minutes with a good strong preview of what you are proposing, to get a go, no-go decision from the leadership team of the company. So, setting up the institutional framework for empowering people to use working sessions and decisions sessions is really really important.

Amit Somani 6:55

Typically, like a decision session would you have like four decisions and four back to back 15 minutes decision sessions or it could be that you have several working sessions for hours or spread over weeks or months and then you get one 15 minute thing that’s done.

Neeraj Aggarwal 7:06

Absolutely! So there is no limit to the number of working sessions you may work to reach a point, where go or no go decisions required. Sometimes working sessions will lead to the reality check, that you know what, this initiative is not worth going after. So there is no more decision session required even there. There is no limit to the number of working sessions required. But typically, you wanna set aside about one hour a month, one hour a week for decision sessions, 15 minutes each, to actually give people the time to be able to come to you for go, no-go decision.

Amit Somani 7:33

Another interesting thing that you said earlier on was L-zero, L-1, L-2, L-3, etc. metrics I didn’t quite catch that maybe you can elaborate on, I’m assuming L-zero and L-1, are the core like north star type metrics, but maybe what are these L-zero to L-4?

Neeraj Aggarwal 7:46

Great! Let me give you a small example. Let’s say you’re a supply chain company. And let’s say the big L-zero metric is changing in reducing costs per shipment by 40%. Now, the L-1 of that essentially mean that there is a last mile component, there is a warehousing component, there is a transportation component, say you know what, if I reduce my CPS by 40%, I will expect my last mile to contribute about 25%. My transportation team to contribute about 30% and my warehousing team to contribute about 50%, that’s the L-1 breakup of the L-zero objective. Let’s take one example of let’s say the transportation team now, the L-2 articulation of that from a transportation standpoint would be, what are the three big metrics or three big drivers of that transportation CPS? Typically they would be the Air vs Surface percentage, what percentage shipments are going by Air vs Surface, it would be of the shipments that are going by surface, how many are going in part truckloads vs full truckloads, of the shipment that are going by a full truckload, what is the utilization of the full truckload consignments that you are actually shipping out. And L-3 articulation of that of the Air vs Surface split would be how many shipments can be stored locally from a consumer standpoint? How many shipments have to travel nationally versus locally? How many categories can you actually break down or reduce your SLA that you can promise to you consumer. So, I think breaking down your L-zero to L-3 level, articulation can be extremely enriching in terms of knowing what are the big levers that you have to go after.

Amit Somani 9:11

Wonderful! Very helpful. So switching to the people side of the business a little bit, you mentioned that as well. I guess two things you mentioned. One is investing and over investing in people, communications, transparency, etc. And the other one that also was very interesting was the NPS components. So let’s talk about the people side maybe a little bit. Can you talk about some sort of best practices that you think has worked not just at Flipkart, but what as you advice and mentor many of the growth stage companies at xto 10x?

Neeraj Aggarwal 9:39

I think the one insight that I have at least had from a very wise man, Mukesh Bansal of Cure.fit. I think people spend so much time thinking of the product that is out there for consumers to experience from the company standpoint. People forget that the company itself is a product. People forget that the people inside the company also come to work every single day and they’ve invested a lot of their life with you and you have not given enough thought to the company as a product part of the equation for them. And I think it starts with this one very simple thing. You asked about best practices. And I think I’ve seen this in cure.fit play out beautifully. Please put together what is called the manifesto of the company. Put together we call it a manifesto or constitution, but put together a document that encapsulates what the company really stands for. What are the core beliefs that you have as a company? What are the values that you want to live, that you want people to experience and live in this company? What are some of the practices that will follow from those values? For instance, if you say that bias for action is a core value of the company, you cannot have people being hired or people being judged on performance management, without judging them on that core competency. So, if you put together that one simple document that talks about what is it that an employee will experience inside the company, I think the very-very strong intervention, I think, It doesn’t take too much time. I think it takes founders about three or four days to get it right. But, putting that together can have a massive impact on what every single employee as it keeps scaling up will experience for company, number one. Number two, it also sets some North Star for holding everybody true, to what you have laid out in the manifesto of the company. It allows you to ensure that, talk is converted into reality every single day. And like I said, bias for action in hiring , bias for action being discussed in terms of any candidate actually shows their particular value or not. In performance evaluation, you can’t say bias for actions is important as a value, but then you know what I’m going to penalize you, for going to market very quickly. So, i think the language of the company becomes one, that flows from, what is called the manifesto of the company. So, one best practice that I have seen really play out beautifully is putting together a manifesto or the constitution and living every single practice, every single day using the manifesto as a north star.

Amit Somani 11:50

Wonderfull! If I think even at Prime, one of my partners Raj Marshruwala, he says, the culture of the company is what employee number 54 or 550 is experiencing so you can do this at any stage, obviously earlier, the better. Because then people just start living and practicing those values. But what are people really experiencing? So you can say one thing, I think the biggest challenge with some of these things is if you’re not just believing, but also not living those values, in terms of implementing them, then they seem like empty talk.

Neeraj Aggarwal 12:16

I tell you the big advantage of putting a manifesto out there, from an employee standpoint. Founders have no place to hide after that, if you put a manifesto out there, and you tell people that this is what we believe in as a company, and this is what we’re going to stand for as the company. I promise you, you don’t live up to that in the first town hall that you have, and you’ve done a violation of that Manifesto there will be an outcry, people will not hold back. So I think the manifesto also forces every leader in the company to run the company in a certain manner. I think that’s been one of the big learnings from the Cure.fit.

Amit Somani 12:45

Sure. So back to the elements of NPS, much like advertising how do you really break it down to attribute what element the NPS is coming from. So, there will obviously be some qualitative metrics but some quantitative metrics. Is that just a lot of customer conversations and customer research, or maybe just a little bit of elaboration on that would be helpful.

Neeraj Aggarwal 13:08

I think it’s deep science actually Amit. The NPS attribution framework that Flipkart put together was after months and probably a couple of years of very deep analytical work of being able to figure out what are the various points in a customer’s journey, where experiences really mattered to him. So, for example, initially, we would have just one NPS score, which you could take every 15 days for every single customer of the company, which wasn’t a very accurate picture of what is really happening today with the customers. The NPS attribution, the NPS framework in the company evolved to saying, look, the customer experience is a product or the company in three stages. You’ve come to the app you’ve not shopped anything, which means a lot of customers who not even bought something from you, but have experienced you in some way, you’re not even touched in NPS journey. So we would actually have an NPS survey done for people who came into the app but, never really transacted after that. You would have an NPS survey in customer that actually transact on the app. And then you would have NPS metrics analyzed in customers who have used the product till they have bought on the Flipkart app. So I think the NPS journey or the NPS attribution framework is a deep science. And I think having an analytical team in place, that can actually, in your own context, understand what are those exact trigger points that matter to customers most is I think very-very important.

Amit Somani 14:14

I’ve heard from many people in this industry, that you are a six sigma wizard on operational excellence. So maybe we’ll talk a little bit about operational excellence. And I know you’re very passionate about people and org and culture as well. So let’s start with the operations a little bit. Maybe you can elaborate on some of the best, you know, tips and techniques on how to run orgs, which are operationally heavy, I guess all of them are.

Neeraj Aggarwal 14:36

I think I’ve had the opportunity & the privilege to see a journey at Flipkart. Where we actually were struggling at one point in time. And I was at the helm of the last mile team and we were really struggling in terms of scaling up and that’s when a lot of the insights and learnings came from. But over the years, what I have realized is that, there are four or five big dimensions of making a really strong operation function. It starts with people design, it starts with the people, the people engine, in any operation setup, I think, when you’re scaling up very rapidly, what starts to happen is that you find people, you find attrition levels increase, you find people going on strike, people being more more disgruntled, especially when you’re running blue collar workforce teams, which are dispersed across the entire country. And why does that happen? It doesn’t happen because people are not leaving you because they found a better job somewhere. People leave you because some basic core tenets of people design are completely missing. Have you hired in the right manner? Have you trained people in the right manner? Have you engaged with them in the right manner? Do you have a design for how all of these elements will actually be done in the company every single day. I think there are some very, very deep learnings that I’ve experienced firsthand in my career. I’ve seen the downside of not doing it well. And I think the upside of doing it well. So I think investing in the right sort of people design in terms of hiring, training and engagement framework is very important. Now, I can’t even begin to overemphasize how critical it is for any company which is scaling up very quickly, especially for your blue-collar workforce. Second dimension from an operations standpoint is really the operating leaders in the company. What sort of trade makeup gets operating Leaders? How are they managing the teams every single day? What sort of structures do they have in place as they keep scaling up? Are operating leaders scaling up with the company or not? The second dimension of running a very strong operating team took me almost a year to hire the right sort of people in our team but it was time well spent. Thirdly, is the governance system in the company I think operations is a military machine. Operation should be run like a military machine. And you have to have the rigor every single day. Do you have daily morning calls to run an operations machine every single day, do you have weekly huddle we have monthly reviews. If you don’t do stuff like this if you do not measure and track the daily metrics that matter every single day, you will never have a consistent org. The fourth dimension that I think over a period of time that I’ve been a very, very big proponent of is the importance of design. Operations is here & now it is a lot of hard work every single day. People don’t have time to think about one year out in two years out, but you need to do that. if you have to keep scaling up if you have to be ready to be 10x over the next 3 years time, holding the thinking around that. Having a very strong thinking arm in operations called the design team I think it’s super critical. The fifth dimension that I think is very important, again, is really thinking about high severity incidents. A lot of times when you are scaling up, the most painful incidents are the ones which are highest severity from a customer standpoint. Have you thought deeply enough about how do you protect yourself against that? And if they happen how do you react to them? I think these are 4 or 5 very critical dimensions running a really strong ops org, if you got them right, you will have a great time.

Amit Somani 17:26

You mentioned several things. There’s people, there’s rigorous process discipline. How about tools?

Neeraj Aggarwal 17:32

I think that’s a given, in my opinion, when i say governance of daily morning calls, weekly reviews metrics to be reviewed in the daily morning calls. These can never happen when the systems that are not in place. So I think I’m not talking about tech because tech is an absolute must. It’s a need, so I think, for scaling up tech is an absolute must. And I can’t think of any company these days that is attempting scaling without tech. So I think that is, in my opinion, that’s a given. But I think within the tech to develop the right sort of metrics and dashboards and right sort of tooling for people on the ground is also very critical.

Amit Somani 17:58

Wonderful! Neeraj. Lots of very interesting insight we could go on all day here. But really thank you for being on the podcast. And good luck to you and xto10x.

Neeraj Aggarwal 18:07

Thank you so much Amit. Pleasure talking to you as always.

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