Flexbox with Unordered list

You need to apply the flex properties to the <ul>

ul {
  display: flex;
  flex-direction: row; <-- not needed as this is the default behavior
  flex-wrap: wrap;
}

Putting the properties on the <div> tells it to display the <ul> in flex, not <li>.

Based on your markup, note that the <li> elements are the child of <ul>, not the .example division element.

<div class="example">
  <ul>
    <li>1</li>
  </ul>
</div>

Since the immediate parent of the <li> elements are <ul>, use the flex properties on the <ul> that is wrapping around the multiple <li> elements, instead of the outer <div> element:

.example {
  width: 50%;
  border: 1px solid #000;
  margin: 1em 0;

  ul {
    display: flex;
    flex-direction: row;
    flex-wrap: wrap;
    width: 100%;
    padding-left: 0;
  }

  li {
    list-style: none;
    display: inline-block;
    width: calc(100% / 3);
    height: 120px;
    text-align: center;
  }
}

http://codepen.io/anon/pen/NGPBbg