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July - 2007 - issue > Cover Story
Driving the Mobile Mania —at home and around the world
Aritra Bhattacharya
Monday, July 2, 2007
Rajiv C Mody, the Chairman and CEO of telecom services firm Sasken Communication Technologies, along with his team of engineers had anticipated as many as 5,000 tests for the digital video application they had developed for a Japanese mobile phone company. The Japanese, they knew, were strict about quality. But when the actual testing process began, it sent their minds in a tizzy. “The number of tests probably went well beyond 50,000,” recalls Mody. They (the clients) would test the resolution of each pixel on the mobile screen, over and over innumerous times. The grind came to a sudden unexpected halt two days prior to the product release: the display characteristics for a particular pixel were not up to the required specifications. The anomaly stretched Sasken’s faculties to the core, and as the harrowed minds worked round the clock, ‘literally 24 hours’ to fix the error, the powers that be in the company realized all over again the worth of quality, and what it meant to respond to a client’s quality specifications.

The experience has held them in good stead; recently the new phone launched in the Motorola stable became the 50th phone to be shipped with Sasken IP. In all, more than 50 million phones have shipped with Sasken’s IP.

Financially too (see graphic on pg-24), the organization has marched from one distinction to another. After having gone public on the BSE in 2005, its revenues touched Rs. 477.1 crore for the fiscal 2006-07, up 55 percent from the previous year. While its services wing grew at 62 percent to contribute 95 percent to the revenue, the products segment contributed 5 percent.

To fuel its growth inorganically, in April last year, Sasken acquired Chennai-based Data Networks and Wireless LAN company iSoftTech for US $1.45 million. This was followed by an all-cash Euro 35 million acquisition of Finnish Hardware and Mechanical Design firm Botnia Hightech.

The acquisitions were a measure to further the philosophy of a global company; an aspiration communicated by the phrase ‘at home around the world’ in its annual report. The theme is brought to life by the clay character Kenny, who is shown embracing varied cultures that Sasken is a part of around the world, thus signifying the mission of global diversity.

Onus on Technology
For Sasken, developing embedded solutions for mobile handsets vertical constitutes a ‘phenomenal opportunity’. As a result of a narrowing down of its focus area—it had begun as an EDA and telecom services provider in 1989 and today is purely devoted to the telecom space—it is poised to grab the opportunity in its earnest. What will carry Sasken through to the next level, believes Mody, is ‘focus on technology’.

“It takes anywhere between five to seven years for a techie, one with a single-minded focus, to understand the GSM space end-to-end,” he explains. Such techies, close to 300 of them are among Sasken’s ranks, make focus on technology a part of their DNA. This has come about not as a matter of coincidence, but by design; only those with an Electrical Engineering or Computer Science background and a strong knack for hardcore technology are recruited by the company. This technological expertise, claims Mody, has helped him win customers (in the handset space) across geographies; from NEC and Panasonic in Japan to Nokia in Finland to Motorola in the U.S.

Incidentally, the brains behind Sasken look at audio-video and security applications for mobiles as the biggest opportunities in the times to come.

In its work in other verticals—Sasken’s business is divided into offerings that cater to four focus areas: wireless terminal product vendors just spoken about, large network equipment manufacturers (both wireless and wireline), semiconductor manufacturers supplying to the telecom market, and test and measurement equipment providers—the onus is on tying the lessons gleaned from deployment into the R&D process.

For example, while deploying networking equipment for one of its clients, it was found that the equipment was not customized as per the local requirements. It was referred to the client’s headquarters, and post-tweaking, was given to Sasken for deploying.

“We look to shorten this cycle in the future,” says Mody, envisioning a scenario where rather than routing the problem to the client’s headquarters, it could be fixed by his own R&D unit. Sasken has developed three different product lines that include Wireless Protocol Stacks, Multimedia Subsystem, and Application Framework, all aimed at the mobile handset space. The management, buoyed by the two-year old shift to the royalty regime versus the earlier license fee arrangement, believes that, the product division will turn profitable in the months to come.

The Makings of an Institution
Walk into a Sasken interview and be sure you won’t be offered a job, not even a career, as most companies fashionably call it today. Instead, what you could have on the table is an offer of a ‘relationship’, one that is not bound by legal documents but by a mutual understanding.

“The hallmark of a relationship is feeling good about oneself in the presence of others,” says Iyer. This ‘feeling good about oneself’ is driven by high self esteem; to push that the powers-that-be work towards providing a sense of psychological security at the workplace - ‘where the world is without fear and the head is held high’.

For one, the company does not have an attendance system, since monitoring induces fear; instead, notes Iyer, all engineers are governed by their conscience of ‘professional commitment’.

“Freedom from fear also means that techies here are allowed to make mistakes,” he says. Errors of commission are not only tolerated, but techies are encouraged to come out with them in the community, so that others too can learn from them. There was, in fact, a time four years back when the company had kick-started the process of celebrating failures, like successes, through parties and get-togethers.

But, why this onus on celebrating failures? “Mistakes spur us to grow” says Swami Krishnan, Sr. VP (Marketing) and CMO (Products and Services), recalling an incident that occurred some time in the ‘90s. The team at Sasken had slogged to create a ‘great v34 modem’, but after all their efforts at building it were through, they realized that it would not be commercially feasible due to the various IPR involved. Taking a cue, today, the company makes it a point to address all IPR issues right at the onset of a project.

But all the above solves only a part of the problem: that of addressing issues pertaining to the psychological environment. There is also the issue of physical environment; it is something that can cause a lot of difference.

Voicing his observations on physical environment, Iyer notes, “Territorial claims are typical of the animal kingdom, but they exist in the social animal kingdom as well.” To make sure that employees are not disgruntled on the issue of ‘territorial’ claims, everybody, even the CEO along with the rest of his management, works from an identical cubicle.

All these are efforts centered on the desire to create an institution, and not just an organization, called Sasken.

Leading, through Impeccability
Getting to enjoy the ‘liberties’ on offer at Sasken does not come easy; the company takes in only those with a ‘high need for achievement’: ones who are willing to take risks, but not gambler’s risks.

“And of course, they must have an impeccable character,” says Mody. Integrity is the most important virtue he looks for while deciding on the lower rungs of leadership in the organization. While that is often heard, he insists that those at Sasken, especially the ones higher up in the ladder ‘actually walk the talk’, for that is the best way to spawn transparency among the ranks: One does not need poster campaigns or newsletters to build organizational character, it comes through when juniors observe seniors, and when they see their bosses being open and transparent, they are attracted and tend to follow the same path.

So much is the management’s onus and belief in character that it does not believe in plain review processes; one, it helps in cutting costs, and two, just numbers based reviews never tell the true story since human minds are conditioned to respond in a preordained manner to them.

In leading the growth of Sasken, and drawing up the line of generals-in-waiting, Mody swears by a liberal mindset. After having identified techies with impeccable character (and technological prowess), he shares his vision with them, asks them about their preferred mode of operation for a particular goal, the resources they would need, and then steps back to let them make their own decisions. “That’s the only way they’ll learn,” he notes. “I believe in giving them a long rope, whether they use it to climb up or do something else is their prerogative.”

Having driven the organization past various milestones of success, he is now absorbed in the idea of creating a ‘Global Sasken’. It would necessitate global-thinking (sic), may perhaps involve a shift in the center of control, geographically. “Today, though we have global centers, (like in Finland, Germany, Japan, and Mexico) they work more as service centers for our clients in that geography,” he says. A Global Sasken would mean one where when an opportunity crops up, and they happen ‘on an hourly basis in the telecom market’, the organization would have the capability to execute it anywhere, depending on the requirements, rather than executing it at the local center.

Of course, there are other more immediate challenges that the organization faces. Primary among them is how to address the duality in the thinking process of today’s techies: they want sky-rocketing salaries, but also job-security as it exists in a PSU. For a company that operates in the ever-metamorphosing communication space, cost sensitivity is a big issue. “If I’m paying someone Rs. 20 lakhs, he/she better deliver value worth Rs. 20 lakhs,” notes Mody. That transforms itself into a call to his people to stretch themselves and work smart.

And why not, questions Iyer. After all, during the ’50s in Japan, a generation committed itself to change. As a result, so advanced is the Japanese market has turned out to be that any global mobile phone company attempting to enter it with its latest ‘state-of-the-art’ products can only match up to Japanese standards that existed two years ago.

Mody and Iyer unequivocally voice that such a watershed era has arrived in the Indian context as well and that today’s techies constitute the generation that needs to commit itself to change. “In fact, they are the change themselves,” notes Iyer. And hence, they must take the stress, they must deliver value, and in Sasken, they must herald the beginning of a new era of technological advancement.

Rajiv Mody: A Food Freak, at Heart

Mody’s style, if there is one, he says, is that of getting better people and giving them a platform to execute. “I bet on people,” he says, “and integrity is what I look for in them”.
A firm believer of the adage ‘growth without character is unsustainable’, he deems it necessary to separate the individual from the issue and concentrate on the latter.

He attributes his being finicky about integrity to his family values. To elucidate, he cites an incident from his childhood spent in Rajkot. He was in the seventh grade then, and the last exam paper of the term happened to fall on a day when his family needed him to travel out-of-station. His father woke him up on the given day at six in the morning and gave him the exam paper and two hours to write it. At the end of two hours, he took away the paper, along with the answer sheet and submitted it to the school’s principal, who had been liberal enough to understand the problem and had made it available to him in the first place.

The Gujarati way of life taught him two things: the importance of being profitable, and the sacredness of paying the salary on time. As a result, even when the company was going through a rough phase after having started out in a garage in California, he made sure that all salaries were paid on time.

A movie buff during his college days, Mahatma Gandhi, ‘and therefore Tolstoy’, and Warren Buffet are some of the authors he reads most today. He believes in working out regularly and is not shy of admitting his biggest weakness: food. “I’m quite adventurous about food,” he exclaims.

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