Udaan

IMB 869
udaan Capital: BUILDING RESILIENCE
SHANKAR VENKATAGIRI
Shankar Venkatagiri, Associate Professor of Information Systems, prepared this case for class discussion. This case is not
intended to serve as an endorsement, source of primary data, or to show effective or inefficient handling of decision or
business processes. The author acknowledges the sterling articulation of the framework by Santana Ramakrishnan, Head of HR
at udaan Capital; the case bears the imprint of her consummate narrative skills. Furthermore, the tireless efforts of Arshdeep
Kaur, Performance Management Partner at udaan, in furnishing fine-grained execution details and informative exhibits have
made producing this case a rewarding experience.
Copyright © 2021 by the Indian Institute of Management Bangalore. No part of the publication may be reproduced or
transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise (including internet) –
without the permission of Indian Institute of Management Bangalore.
This document is authorized for use only in Amanda PETTICA-HARRIS's MBA Grenoble - Strategic Human Resources Management - DA006465 at Grenoble Ecole De Management from
Feb 2023 to Apr 2023.
udaan Capital: Building Resilience
It was a sunny autumn afternoon in 2019. A dusty street in the upcoming eastern reaches of Bengaluru housed a
string of start-ups that buzzed with activity. Santana Ramakrishnan walked up the stairs of udaan’s headquarters,
past the brick and glass façade, and waited at the lobby. Chaitanya Adapa, the business head for its Capital arm,
escorted her to a conference room; he was meeting with her to discuss an HR leadership role. The conversation
quickly turned to Adapa’s concerns.
Each employee has his or her own career journey and dreams. In my mind, performance management
brings together individual aspirations and organizational goals. To convert these into actual outcomes,
Performance holds the key. I have certain expectations in terms of how the organization is perceived by
our employees, just as we are concerned about how our products are regarded by the end users. We can
talk all we want about culture, but the ultimate judgment that our employees make about who we are
and what we stand for is when they see us running the process on them. Bottomline: does the
organization walk the talk?
Working with small teams, the company’s leadership had conducted business with an iterative approach to
problem solving. However, they could not sustain an organization with large expectations of financial outcomes,
without the right people practices. This theme resonated across subsequent conversations that Ramakrishnan held
with udaan’s business heads. Adapa believed that performance management was of foundational significance.
Sujeet Kumar, a co-founder, wanted the Capital business to serve as the crucible to pilot a performance
management framework, with a view to scale it to the entire organization.
Having spent two decades in structured settings such as AXA and Goldman Sachs, Ramakrishnan had developed an
in-depth understanding of HR operations within large financial outfits. She now wanted to explore the prospects of
working in the setting of a nimble start-up. She joined udaan Capital as the Head of HR in January 2020.
RETAIL IN INDIA
Millions of neighborhood “kirana” stores constituted the backbone of retail commerce in urban and rural India.
These family-run two-to-four-person operations stocked food as well as non-food grocery items (see Exhibit 1).
Weathering stiff opposition from these shopkeepers, the central government had eased the norms for foreign
direct investment (FDI) in retailing.1 The 2010s witnessed rapid growth in organized retail, from a miniscule 4% of
the total share to twice that by 2015. Grocery hypermarkets had sprung up on main streets. Shoppers in metros
and larger towns had begun to flock to big format “malls” that carried apparel, branded electronics, and
furnishings.
In stark contrast to this picture of prosperity, two-thirds of India’s population inhabited smaller towns and villages.
Retail commerce in these parts was the province of small format stores that were classified as micro, small and
medium enterprises or MSMEs. The MSME Development Act of 2006 brought the manufacture of goods and the
rendering of services under one umbrella. The Act was drafted as a vehicle for the government to formulate
preferential policies and facilitate registered enterprises with skill development, technology upgradation,
marketing, and most importantly, financing.
The policies and practices in respect of credit to the MSMEs shall be progressive, and such as may be
specified in the guidelines or instructions issued by the Reserve Bank, from time to time, to ensure timely
and smooth flow of credit to such enterprises, minimize the incidence of sickness among and enhance the
competitiveness of such enterprises.2
1
Bhaskar Balakrishnan. Resistance to FDI a hangover of the past. Hindu Business Line. (December 2011) Retrieved from
https://www.thehindubusinessline.com/opinion/columns/bhaskar-balakrishnan/resistance-to-fdi-a-hangover-of-the-
past/article20371402.ece1
2
MSMED Act 2006 retrieved from http://dcmsme.gov.in/MSMED2006.pdf
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Feb 2023 to Apr 2023.
The MSMED Act defined a services sector “microenterprise” as an undertaking whose investment in equipment
was under INR 10 lakhs (about USD 15,000). This category captured the bulk of retail businesses. Government
schemes like the Micro-Units Development & Refinance Agency (MUDRA) were designed to support MSMEs, but
the loan amounts averaged a low INR 45,000 or USD 700. Bank credit extended to services sector MSEs in 2015-16
amounted to USD 70 billion. 3 The World Bank had estimated the credit gap in the sector at USD 380 billion, but
there were supply side constraints. Institutional lenders were reluctant to tap into this market due to small loan
sizes, high servicing costs, and the inability of their clients to shore up financial documentation and collateral. 4
A vibrant community of thirteen million merchants formed the entrepreneurial pulse of India’s retail economy. 5
Even though these businesses had stable cash flows, less than 10% had access to working capital loans from formal
financial institutions. A majority of these retailers relied on invoice lending (known as trade credit) from suppliers,
which permitted them to defer payments until after the goods were sold. Oftentimes, sellers were forced to
borrow from informal lenders at steep rates of interest. A survey commissioned by the Mastercard Center for
Inclusive Growth revealed the demand side constraints:
Few merchants rely on formal lenders to access credit, and two out of three merchants are not satisfied
with their current formal lenders mainly due to the indirect costs of making multiple visits to a branch
that is not located within walking distance, and the lengthy disbursement processes associated with loan
applications. This has implications for financial inclusion programs that focus on promoting access to
finance but pay inadequate attention to design and delivery. 6
Non-banking financial companies or NBFCs stepped in to finance the underbanked. These companies could issue
unsecured loans without seeking collateral, while not being mandated to maintain cash reserve ratios like
scheduled banks. Instead of demanding borrowers to demonstrate a financial history, NBFCs relied on credit risk
models that were developed using the same transactions they underwrote. Easy Internet access and mobile-
friendly technology platforms helped speed up the lending process and monitor repayment behaviors.
DIGITAL MARKETPLACES
The 2010s were a heady period for Internet adoption in India. By 2015, over 200 million users 7 were connected to
the Internet with their smartphones. Online retailing had come of age; the e-tailing duo of Amazon and Flipkart
had cornered a large share of the USD 16 billion e-commerce market. Flipkart’s “Big Billion Days Sale” (BBD sale) of
October 2015 ran neck to neck with a competing event by Amazon. 8 Netting USD 300 million, this five-day BBD sale
showcased the potential of an eight-year-old indigenous venture to facilitate 150 million visits to its servers from
apps that ran on myriad devices.
Half of the BBD sale traffic had originated in Tier 2 and Tier 3 towns. On the one hand, customers accessing the
Internet from far flung corners of the country had racked up large order numbers. On the other hand, every item
had to be delivered efficiently and without a glitch; this accentuated last mile connectivity hurdles in the
distribution networks. Managing the supply chain to pull off this scale of operation involved liaising with thousands
of vendors for millions of SKUs across multiple categories, stocking inventory in warehouses, and building up the
end-to-end logistics. Giant data centers and competent staff were required to sustain the high throughput.
3
Nair, Tara, and Keshab Das. "Financing the Micro and Small Enterprises in India." Economic & Political Weekly, 2019, 54(3), 37.
4
Dutt, Nisha et al. Financing India’s MSMEs: Estimation of Debt Requirement of MSMEs in India. No. 134150. The World Bank, 2018.
5
Check out the IBEF Report dated August 2015, retrievable from https://www.ibef.org/download/Retail-August-2015.pdf
6
Singh, Anisha et al. The Evolving Financial Ecosystem for Micro-Merchants in India. IFMR Report (September 2017)
7
Statista report. Retrieved from https://www.statista.com/statistics/309019/india-mobile-phone-internet-user-penetration/
8
Joel Zand. Flipkart dominates India’s shopping apps. SimilarWeb (October 2015) retrieved from
https://www.similarweb.com/corp/blog/flipkart-dominates-indias-shopping-apps/
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By 2015, digital platforms had enabled millions of sellers to transact with consumers. Whereas the business to
consumer (B2C) connect had come of age, the less visible but significant business to business (B2B) linkage was yet
to show maturity. Small merchants in India’s hinterland still lacked access to branded products. Establishing a
platform akin to Flipkart for the Indian B2B marketplace had its share of challenges. Buyers routinely deferred their
payments for indefinite periods. Sellers contracted differentially with buyers based on order volumes, so prices
could not be made transparent. Sellers had to comply with strict regulations in sectors like pharmaceuticals. 9
udaan
udaan was a Bengaluru-based enterprise with an eponymous trading platform that was specifically designed for
small businesses. It was founded in late 2016 by technocrats Vaibhav Gupta, Sujeet Kumar and Amod Malviya, who
regarded the Internet as a powerful equalizer. A central aspect of udaan’s business model was to help millions of
merchants in India leverage their reach with seamlessly integrated digital, financial and logistical infrastructure.
With a focus on making B2B commerce convenient, the founders rolled out a platform that was uniquely
positioned to formalize and scale e-business operations.
Through its e-commerce marketplace, udaan connected traders, retailers, and manufacturers over a mobile app.
Buyers registered on the app (see Exhibit 2) could browse through items in a variety of product categories such as
lifestyle (apparel), food, FMCG, electronics, and pharmaceuticals, and place their order. The in-house logistics team
at udaan took care of the fulfilment. The team collected the ordered items from the seller, who could be a
wholesaler or a manufacturer; the shipment went through a series of hubs before being delivered to the customer.
Retailers and sellers could avail of a loan through various credit products offered by udaan Capital, the NBFC arm
of udaan. The entire process concluded after collecting the payment from the buyer.
The udaan ecosystem (consult Exhibit 3 for the divisions) enabled members across different product categories to
discover customers and suppliers, and deal directly with them, rather than through intermediaries. They could
establish their own buy and sell terms. Besides providing logistical support, udaan also secured the payments,
relieving vendors from the burden of collections. The udaan platform helped members build relationships with
like-minded parties and grow their network through repeat purchases. It facilitated easy product returns and
extended customer support to buyers on the platform.
Within 15 months of its launch, the firm had built a book size of INR 300 crore (USD 40 million). By 2020, it had
established a nationwide presence, with employee strength of 3000. Connecting a network of three million users
via its app, the company was moving a hundred thousand shipments daily (see Exhibit 4) across India’s towns and
cities. Clocking a GMV10 of INR 1000 crore (USD 140 million) per month, udaan had emerged as a partner of choice
for brands to distribute their products to small and medium-scale vendors across the country. Anand
Ramachandran, who oversaw credit deployment, listed the factors that spurred this growth:
We had three lucky breaks. Reliance rolled out its Jio network at dirt cheap rates. Suddenly, folks in Tier 2
and Tier 3 cities had fast 4G on their smartphones, so they could get on to digital apps. The second was
Demonetization. Merchants who were cash starved switched to making their payments over the phone.
This accelerated their migration towards digital interfaces. The third tailwind was the launch of the GST: 11
this tax regulation morphed all of India into one market. Inter-state mobility became much freer, because
of which a pan-India platform like ours benefited. So the growth story for udaan is a mix of hard work and
the right opportunities.
9
Hummer, Merritt. B2B Marketplaces will be the next billion-dollar e-commerce startups. TechCrunch (November 2020) retrieved from
https://techcrunch.com/2020/11/04/b2b-marketplaces-will-be-the-next-billion-dollar-e-commerce-startups
10
GMV = Gross merchandise value
11
GST - Goods and services tax (GST) is an indirect tax (or consumption tax) used in India on the supply of goods and services.
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Feb 2023 to Apr 2023.
udaan Capital
udaan Capital was an integral part of the udaan ecosystem, which brought traders, wholesalers, distributors,
retailers, and manufacturers under one umbrella. It offered credit products for buyers and sellers on and off the
udaan platform. It was a well-capitalized NBFC with equity support from udaan Group and debt capital raised from
marquee financial institutions such as Aditya Birla Finance, Kotak Mahindra Bank, and Tata Capital.
The workforce of two hundred at udaan Capital was divided along operations heavy and knowledge heavy roles
(see Exhibit 5 for team descriptions). Operations roles involved negotiating and working with people on the “field”.
For instance, cluster collections managers oversaw a team of field executives in a region, who were responsible to
collect dues from customers operating on lines of credit extended by Capital; these managers were expected to
strengthen the credit portfolio of the cluster by improving collections. On the other hand, risk analysts and
financial planners required a different skill set to support data analytics and forecasting.
In a town hall meeting, co-founder Vaibhav Gupta had summarized his outlook for the financing arm:
India’s MSME story is gaining steam. When we think of a digital ecosystem, we must have a trading
marketplace, a lending marketplace, and a supply chain with warehousing and fulfilment. All of these
platforms and services must work together to take the existing offline trade and digitize it for the future.
Informal trade credit runs the economy of this country. Looking at our growth over the next 3 to 5 years,
Capital must continue working on the trade credit problem. How do we get better at underwriting? How
do we get better at collections, and better at predicting the behaviors of our buyers and sellers?
Adapa of udaan’s founding team had played an instrumental role in laying the groundwork for Capital. An engineer
and an MBA, Adapa had earlier held key financial positions at prominent start-ups within the e-commerce domain.
He was committed to building Capital as a bulwark for the business and its customers. This journey was fraught
with anxiety in raising debt, regulatory upheavals, and fickle borrowers influenced by other lending sources.
Knowing that these factors remained outside the direct influence of udaan, the workforce had to be geared up to
overcome the diverse challenges that came in its way. Through his accumulated experience, Adapa had learned
the importance of getting people practices right.
Over the years, I have had these “light bulb” moments. Normally, organizations view customer experience
as the core metric to measure success. This experience is delivered by the products that we offer, and
these products are designed by our employees. If we take care of our employees, then the products will
be taken care of, and subsequently the customer experience. In smaller teams, it is easier for managers to
moderate reportee relationships with respect, but to move a hundred people at the same rate, you will
require strong HR processes such as performance management and feedback. Finally, the way we resolve
conflict, and the way we handle performance sends tremendous messaging around who we are.
HR at udaan was lean and structured along the lines of business. Founders had seen their best laid plans not reach
their full potential because the teams that executed them could have been better managed. They recognized that
merely assigning targets to employees and measuring their achievement would not suffice; their own experiences
had convinced them that performance was something truly personal. Any people process that encouraged
employee categorization and censure in the name of rating and feedback would at best yield a well-oiled machine.
What we really want is to enable employees towards moon shots, and to acknowledge that each one is at
a different stage of their career and cannot be normalized on a curve. We must reinforce that the “how”
is as important as the “what”. Doing all of this with passion and sincerity means that we have a chance to
build an organization that is resilient to external forces.
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The strongest frameworks and most honorable intentions were known to fail when confronted with disengaged
and cynical employees. As the head of the Capital business, one question kept Adapa on his toes: “How do I create
an organization that will effectively navigate crises and build the employee’s trust?”
PM at udaan Capital
Ramakrishnan’s initial conversations with the leadership team revealed the need for a portfolio of HR practices
that would evolve with the business of a start-up on a massive expansion path. Adapa was convinced that after the
company founders, HR was the biggest influencer of culture. In most settings, managers delegated instructions to
their reportees to get work done; the encoding of how a direction was perceived and acted upon, with the
appropriate level of focus and energy, strongly depended on the manager-reportee relationship; if the right HR
practices and culture were in place, then they would optimally shape this relationship.
Ramakrishnan met with employees individually and in groups to understand the company’s value chain (Exhibit 6).
During the course of these conversations, one thing became clear: the goals that the organization as well as its
workforce had set for themselves had been ambitious. Managers and employees were swimming upstream simply
to stay relevant to the customer; this left little room to introspect on one’s personal growth. Anuj Minglani, a risk
analyst, summed up the status quo:
We have always been goal-driven and output-oriented. However, there is no structured way to capture
this output for us to grow inside the organization. The feedback mechanism is missing. We do not reach
out often to our seniors to discuss how we are progressing. We are just trying to grow the organization
and complete our tasks, but never step back and see what needs to be done to grow as an employee
within the system. I have had very few feedback sessions and even those are task-oriented. There are no
clear signals as to, this is what the organization expects from me, and this is what I need to be delivering.
By January 2020, two formative years had passed, fueled by the adrenaline that energized start-ups, and buffeted
by headwinds that the company had sailed through. People paused to catch their breath; in this pause, questions
about career, growth and development began to take shape and steadily gained momentum. The absence of their
resolution had manifested as dissatisfaction, anxiety, and attrition. The leaders on the other hand had expressed
doubts about being able to sustain the pace in the face of employee dissatisfaction.
While the existing protocol had checked all the boxes concerning goals and feedback, it provided limited leverage
to managers and employees to focus on progress and personal development. Prevailing performance management
(PM) frameworks like the balanced scorecard laid heavy emphasis on accountability and metrics; what was lacking
was the rigor of employee engagement and continuous dialog, which were essential to the success of any
performance process. It was imperative to formulate a new framework that addressed these shortcomings.
PERFORMANCE MANAGEMENT REIMAGINED
Upcoming years would demand increased agility from the organization, a higher level of ambition in employees,
and resourcefulness in accomplishing audacious goals. This required the workforce to wholly pledge to udaan’s
central cause, believing that their professional development was a shared commitment. With minimal control over
external factors, the new PM framework had to build stability in the minds of the employees, while encouraging
them to continue moving forward. Ramakrishnan explained:
Setting goals, appraising performance against them, having feedback loops and arriving at employee
ratings – these cornerstones will continue to exist in the new protocol. We have not drastically departed
from that. These are performance management principles that a lot of organizations have debated. But at
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the same time, what elements are relevant to Capital today? Will they be elastic and scalable to the
organization we wish to become? Is it a practical model for today, and a sustainable one for the future?
For any performance protocol to work, cornerstones had to be clearly defined, non-negotiable outcomes had to be
mutually agreed upon, and difficult questions around business commitments had to be handled. An effective PM
framework for udaan had to address the dichotomy between operations-heavy and knowledge-heavy roles with
specific directives. Equally important was determining how udaan Capital’s leadership would leverage the output
of a process of this scale and nuance to build a resilient business. Ramakrishnan was certain that implementing the
process would give them specific data around individuals and cohorts:
Who should we focus on in terms of growth? Who has long-term potential in this organization? Who can
build new lines for the business? Who can fix the broken parts? Who is the Steady Eddie that keeps the
lights on? Who is the aspirational employee with moon-shot goals? I would like to have a system that
inspires faith in people, one that is fair and logical. It should take into account not just outcomes, but also
the effort that our employees have put in. I am very clear at the outset that we must value competence as
well as collegiality. And we must enable employees to become more employable.
All of these ideas coalesced to sow the seeds of a reimagined performance management approach.
Approach
The starting point was to break down organization-wide business and financial goals into business unit (BU) level
and function level goals. Building rigor around this step at the outset would be critical to ensure that the processes
followed were effective. Individual and team goals (the “what”) cascaded from the goals of udaan, while balancing
the functional priorities of the various BUs. What udaan Capital managed to do for the employees was to inter-link
goals that aided team performance without diminishing the value of individual contributions.
At an individual level, goals were further refined as key result areas (KRAs) and key performance indicators (KPIs);
timelines were attached (see Exhibit 7). To illustrate, assets under management (AUM) was a key performance
metric for udaan Capital; expanding AUM was a vital business goal. A KRA for this metric flowed into goal sheets of
the Head of Business – Supplier Credit, and the sales executive at the last mile, with targets adjusted on the basis
of the level and role of the individual.
A common denominator clarifying “how” goals could be achieved had to be drafted; this would serve as the
baseline for all employees, irrespective of level, function, or seniority. It also held them accountable to deliver their
business objectives in a constructive and collaborative fashion. Thus began the journey of drafting “enablers” for
the udaan Capital organization, which affirmed with demonstrative statements a set of five core values for
employees to embrace and display: care, ambition, resourcefulness, velocity, and camaraderie (see Exhibit 8).
Skills were a composite of knowledge that was specific to a domain. They helped individuals and teams deliver
results, while organizations harnessed them to build proficiencies relevant to the line of business. Building upon
the role classification in udaan Capital as operations and knowledge-heavy, “skill ladders” were developed for a
dozen job families, overlaying the career stages of individuals. These ladders clarified to employees and managers
the level of expertise required of an individual to work effectively towards their goals, and agree on areas for
further improvement so they could reach their full potential.
Exhibit 9 highlights skill proficiencies for risk analysts at different rungs on the ladder. These skill discussions were
followed by a detailed action plan in partnership with HR, to help build a satisfied and competent workforce, one
that was agile to pivot to the future needs of the organization.
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Feb 2023 to Apr 2023.
Triad of Actions
The recipe to build a resilient business was to develop a resilient workforce. As this theme began to take shape, a
triad of actions unfolded. While Ramakrishnan was clear about the steps, they had to be enunciated and woven
into a cohesive process and optimized for effort and outcome.
1. Provide experiences and opportunities appropriate to the career stage
Given the diversity of backgrounds and experience, development interventions for udaan Capital employees
had to be designed based on their career stages:
 Early stage – Campus and lateral hires with no prior work experience
 Early-to-mid stage – Hires with relevant business experience
 Mid-stage – Lateral hires with an established career experience
 Mid-to-late stage – Hires with superior career and leadership experiences.
These stages were configured to accommodate the nuances of operations-heavy as well as knowledge-heavy
roles (Exhibit 10).
2. Discuss objectively and periodically on effort, results, and skills.
Three quarterly check-ins and an annual performance review facilitated continuous dialog between managers
and their reportees. The objective, as the name suggested, was to “check-in” on someone. It was not meant to
function as a top-down review that would have narrowed the scope to one-way feedback plus a star rating. 12
Each intervention commenced with an employee submitting a self-assessment to their manager. The manager
followed it up with his or her assessment. A discussion would be scheduled, either face-to-face or on video.
The two parties would jointly agree on the next steps, and an action plan was documented. In exceptional
instances, the one-over-one manager or the HR business partner would be called in to mediate, if the manager
and the employee were unable to reach a consensual outcome.
3. Focus on a 2-4-year development horizon
The feedback on skills relevant to the employee's career stage and role would steer the conversation toward
one’s development. Based on the output of the skill assessment and the individual’s career aspirations,
managers and employees would discuss and finalize an individual development plan or IDP. An IDP (Exhibit 11)
consisted of the development goals of an employee along with an action plan to achieve those goals.
Performance Milestones
Goal setting (July)
To enable timely goal setting, the leadership team along with the co-founders and relevant stakeholders had to
finalize their business and financial goals. While articulating the goals, it was the manager’s additional
responsibility to emphasize the role of the enablers. Besides clarifying goals for the individuals, this exercise also
accommodated those who operated with quarterly or half-yearly goals, and “step-projects.” 13
12
Video excerpts from actual check-in conversations at udaan Capital have been attached as supplementary materials for the case.
13
Small projects designed to be time sensitive and deliver incremental advantages to the business unit.
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Quarterly check-ins
First Check-in (September)
During this initial check-in, whenever employees had concluded their quarterly goals or step projects, managers
communicated their feedback, highlighting potential areas for growth. With the remaining employees, the
discussion focused on reviewing existing goals, making course corrections, and resetting goals and expectations.
The common thread across the discussions included two elements: one, having an open and honest conversation
about the enablers and two, initiating a discussion about the employee’s aspirations and challenges (IDP).
Second Check-in (December)
The second check-in continued along the same spirit as the first, with the added element of skill ladders; these
would function as a reference chart to baseline an individual’s existing skill level in their current role as well as
guide a discussion around development opportunities. This helped the employee build a deeper appreciation of
the current role, while being informed about what it would take to move to the next level (promotion), a new role
(lateral move to a different BU or team), and a project (short-term assignment).
Third Check-in (March)
During this check-in, the manager and the employee were expected to take stock of the journey of delivery and
development and agree on an action plan to end the upcoming quarter and performance year on a strong note. It
would validate any pending separation or termination decisions. This outcome would be a result of continuous
feedback, skill assessment, and sustained dialogue over a period. While this would not diminish the difficulty of the
decision, it would ensure that the employee was treated with respect and was allowed the appropriate chances to
maximize his or her prospects of succeeding within the organization.
Annual Performance Review (June)
The annual performance review tied-in all elements of the quarterly check-ins. This was a four-part discussion
between the manager and the employee, which involved reviewing and assessing the employee’s performance
against the agreed goals, their conduct on enablers, progress along skill ladders, and movement against individual
development plans. The first two parts yielded a non-numeric performance rating to inhibit comparisons. 14 The
outcome of the last two parts formed the basis of the employee’s continuing journey within the organization. It
supported follow through actions and decisions around the employee’s development, growth, and continued
engagement.
IMPLEMENTATION
Arshdeep Kaur joined udaan Capital as a Performance Management Partner with the express mission to roll out
the reimagined PM framework. Backed by business partnering experience within large organizations such as Tata
Steel and Jindal Steel Works, she understood the challenges of implementing an HR process spanning the entire
employee base. Kaur’s remit in Capital included program managing the PM process execution, building protocols
for the framework adoption, and running the quarterly check-ins in an efficient manner, while troubleshooting
failure modes. She had to meticulously orchestrate a set of actions in partnership with the employee-facing
business partner and talent management teams.
Consistent communication and a uniform application of the PM framework across the organization would generate
a sense of engagement as well as drive active participation. Before the launch of the PM exercise, Kaur and her HR
14
Did not meet expectations/ Met expectations/ Exceeded Expectations/ Exceeded expectations consistently
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Feb 2023 to Apr 2023.
colleagues conducted enablement sessions that were aimed at facilitating the milestones as well as improving a
manager’s capability to anchor constructive dialog. These sessions leveraged different modes of learning such as
training, dialog, and roleplay. Additional sessions during the PM cycle allowed the HR team to address any gaps in
understanding and reduce dissonance.
Kaur’s implementation journey was filled with challenges and learnings. Employees had high expectations around
self-development and growth, and it was important to deliver the PM process in letter and in spirit. Getting the
managers to conduct the check-in discussions effectively and complete them on time was vital to the success of
the process. The initial goal setting conversation was unusual to most managers and their reports, who had grown
accustomed to discussing goals on an ad-hoc basis during the year. As the PM exercise progressed, they realized
not just how challenging the undertaking was, but also how detailed and balanced it needed to be.
The maturity and credibility of the HR team was critical to support managers in unlearning their past experiences,
while coaching them individually and providing guidance around potentially difficult employee conversations.
Occasionally, employees relied on assistance from the HR team around writing their self-assessment, selecting
words to showcase achievements, and holding a productive conversation with their managers. As time progressed,
employees were able to complete their tasks on the platform with minimal support from the HR team.
The PM exercise not only demanded time from business heads, but an equal commitment to the quality and intent
of the discussion. The manager and employee experience had to stand up to the lofty ideals that the framework
had set out to achieve. Sumit Gupta, the National Head of Collections explained the benefits of integrating
employees at the bottom of the organizational pyramid:
They are able to establish the link between our collections targets and the financial outcome at the top of
the funnel. If an employee does not sit at an udaan office but works remotely, a quarterly commitment to
discussing goals and aspirations helps us drive engagement and loyalty. I work with young and first-time
managers; this process has helped them absorb first principles of people management such as keeping
communication channels open, being transparent about what is working and what is not, how a target is
achieved is as important as meeting the target, and so on.
The first quarterly check-in was done offline, using Excel spreadsheets to capture the outcomes. To sustainably
conduct this exercise, the PM process was migrated to an internal technology platform. While the platform offered
clear advantages, transitioning to it required concerted efforts and change management. Subsequent check-ins
were uncomplicated. The tracking of progress against goals (see Exhibit 12), recording self-reviews of employees,
documenting conversations, assessing employees and assigning skills relevant to them became streamlined.
The second check-in demanded an increased awareness and education for the managers around assessing skills at
an individual and team level. The HR team coordinated with the managers to maintain consistency in assessment
and communication across the teams. The third check-in built on the gains and experiences of the earlier check-ins
to ease the PM process into autopilot. Managers and employees were beginning to address these check-ins as
“business as usual.”
After every check-in, two protocols were set in motion. Firstly, the HR team examined 70% of the documents to
gather insights and recommend follow through plans. The second protocol involved a feedback survey (Exhibit 13)
with an objective to measure the overall satisfaction with the experience, to validate the existing PM process, and
to seek opportunities for improvement during future deployments of the framework. These steps ensured that the
process stayed relevant and rooted in reality, as opposed to a rigid loyalty to a theoretical construct.
At the end of three quarterly check-ins, the HR team had amassed a wealth of data about individual aspirations,
skills assessments and IDPs. Distinct trends could be identified across cohorts: business analysts hoping to switch
Page 10 of 19
Feb 2023 to Apr 2023.
to business development roles, underwriters wanting to take up a short-term assignment in sales, managers who
devoted themselves to detailed reviews versus those who traded in brevity, and so on.
The career development framework at udaan Capital relied on the PM process, given that the skills and IDP were
integrated with the check-ins. Individuals received timely feedback on skills that were relevant to their jobs; IDPs
were drafted with the support of their managers. The “Talent Assessment Framework”, which was a composite of
performance parameters, provided data around individuals who could move into positions of higher responsibility;
promotion conversations became more aligned to organizational needs and individual aspirations. Employees who
wanted to move laterally across functions to build depth were shown opportunities across the udaan organization.
CONCLUSION
Consistent application of a PM methodology would result in meaningful conversations and reliable actions. A few
bad quarters or a bad year was inevitable in the business cycle; however, assiduously developing skills that were in
line with employee aspirations was important for gradually building resilience and longevity in the workforce. It
was equally important to listen constantly to managers and employees on the practicality and effectiveness of the
reimagined PM approach, which had to be tweaked and adjusted to reflect current and future experiences. Not
compromising on the quality and intensive nature of the process were all necessary milestones in this journey.
The availability of talent and skills had a noticeable impact on organizational design. As new roles emerged,
managers began to make objective decisions. Earlier, leaders looked without hesitation outside the organization to
hire for new positions; now, they stepped back and invested in internal talent pools. This not only meant better
management of resources, but also created symbols of success within the organization that inspired employees.
The backbone of performance management began to create a cycle of trust and engagement in the employees
that withstood targeted poaching by other start-ups.
Adapa, Ramakrishnan, and their teams were preparing to stay the course on this PM journey. A validation of the
fundamentals and the process would form the basis for a more universal PM framework that could be scaled
across the rest of the organization. Following a debrief on the PM exercise, Gupta elaborated on his vision:
We want to do things well and do them patiently over long periods of time. When we conceptualized this,
we asked questions in the broader context – of not just udaan Capital or udaan as a whole, but around
how to build a large-scale organization. Our core choices are not going to change as we deploy across
contexts, simply because they are foundational choices. I do believe they will shift a bit in shape and form,
because of how differently we are organized. Take for example udaan Capital versus e-commerce versus
our logistics businesses. While there may be obvious differences, the choices we make have largely been
driven by the context of high growth, evolving environments.
QUESTIONS
1. What was the need for a performance management revamp at udaan Capital?
2. Goal setting and three check-ins are through. Has the reimagined PM framework worked?
3. What suggestions would you have for the annual performance review?
4. If you were heading udaan Capital, what aspects of the reimagined framework would you want to modify?
5. What considerations must be taken to roll the framework out to other arms of udaan?
6. Can this framework be generalized and applied to all kinds of organizations?
Page 11 of 19
Feb 2023 to Apr 2023.
Exhibit 1
A “Kirana” Store in India
Source: Photograph provided by udaan
Exhibit 2
Trading with udaan
Source: Information provided by udaan
Page 12 of 19
Feb 2023 to Apr 2023.
Exhibit 3
udaan Ecosystem
Exhibit 4
Business Growth
Page 13 of 19
Feb 2023 to Apr 2023.
Exhibit 5
udaan Capital
Teams at udaan Capital
Supplier Credit: Business development and sales teams responsible for onboarding sellers to avail of udaan’s credit
products.
Retailer Credit: Focuses on the buyers on the udaan platform to avail of the credit products. This team uses
technology to send notifications through the app to the retailer network to avail of credit products.
Time Pay: Provides working capital management solution through an app for retailers to settle payments.
Off-udaan Business Development: Targets the buyers or sellers who are not on the udaan app to avail of credit
products offered by udaan Capital.
Collections: A large field force of collection agents responsible for collecting the dues from borrowers.
Risk Analytics: Builds models to generate insights on optimizing processes and products by examining data from
buying patterns, re-payment behaviors, and so on.
Enterprise Credit & Finance Team: The Enterprise team raises capital from banking partners for the credit
products offered on the platform. The Finance partnering team manages the P&L for udaan Capital.
HR: Supports the business by being a strategic partner in decision-making on the org structure and meeting the
talent needs of the organization. The team also takes care of the talent by extending support throughout the
lifecycle of the employees.
Page 14 of 19
Feb 2023 to Apr 2023.
Exhibit 6
Value Chain for udaan Capital
Exhibit 7
Goals for a Cluster Collection Manager
Page 15 of 19
Feb 2023 to Apr 2023.
Exhibit 8
Enablers
Exhibit 9
Skill Ladder for a Risk Analytics Professional
Page 16 of 19
Feb 2023 to Apr 2023.
Exhibit 10
Directions for Development Interventions
Exhibit 11
Individual Development Plan
Page 17 of 19
Feb 2023 to Apr 2023.
Exhibit 12
Tracking Goals with the Internal Technology Platform
Page 18 of 19
Feb 2023 to Apr 2023.
Exhibit 13
Results of the Feedback Survey
Overall Sentiments
Page 19 of 19
Feb 2023 to Apr 2023.

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IMB 869

udaan Capital: BUILDING RESILIENCE

PERFORMANCE MANAGEMENT REIMAGINED

1. Provide experiences and opportunities appropriate to the career stage

2. Discuss objectively and periodically on effort, results, and skills.

3. Focus on a 2-4-year development horizon

Goal setting (July)

First Check-in (September)

Second Check-in (December)

Third Check-in (March)

Annual Performance Review (June)

Source: Photograph provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

Teams at udaan Capital

Source: Information provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

Source: Information provided by udaan

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