The Way I Work : Arvind Rao of OnMobile

As told to Jacob Cherian

For a person who has redefined the telecom value-added services sector, Arvind Rao sure is a strange fit. He dislikes checking mails on smartphones, gets irritated with people who fiddle with their Blackberrys at meetings and switches off his cell at night. “The day you start the day by answering emails on your phone, you are lost,” believes this IIT alumnus, who along with Chandramouli Janakiraman, has built a Rs 400-crore company in less than a decade. OnMobile went public within four years of its inception and has grown at nearly 50% year-on-year since then. It has also created at least a hundred millionaires from among its staff of 1,200 through its unique stock options programme. Rao likes to do things differently. He is opposed to traditional office hierarchy, where people pull rank to get work done, and believes everyone has to prove his worth everyday. On any given day, you might find him in a pair of jeans and t-shirt, encouraging employees to argue an idea out or urging them to “move the needle” and make an impact on the client’s profits

I’m constantly told that I’m the worst-dressed person in the world, to which my usual retort is: “The way you dress has little impact on your performance”. I typically wear a combination of cargo pants and shirt, or a t-shirt, to work. I remember once closing a deal in jeans and a t-shirt. The guy seemed distracted the whole time. Just before he signed the contract, he looked up and asked confusedly: “One of you is the CEO. Who is it?” My colleagues were dressed in suits, while I was in casuals. Yet, I was talking the most. I firmly believe the way I dress has no impact on my business. The fact remains that our deal closure rate is more than 95%. And all our customers have given us repeat business.

I live in a rented apartment that opens out to the sea. My bedroom has huge French windows and faces the east. At night, I switch off my laptop and phone, and leave the windows wide open. When the sun peeks over the horizon, I snap awake. If sunlight doesn’t wake me up, my golden retriever does. Oscar always knows when it’s time for his morning walk. I don’t use an alarm clock. That’s a discipline that my grandfather, an IAS officer and a Sanskrit scholar, inculcated in me as a child.

After my walk, I have my first cup of coffee. I like the beans freshly crushed in a French-press machine — I have got three of them in the office as well. My breakfast consists of oatmeal and fruit, and a cup of cold coffee. Then I get started on my mails. Usually, I respond to those marked “urgent”. I go through my emails in detail only once I get to work.

My office at Nariman Point is a short ride from home—usually in my 7-series BMW. It has a sea view on two sides. Five of us sit in this office, mostly, people who interact with the financial community, or look after the books. About 30 kms north, in Andheri, sit another 80 people who manage the portal and act as a support structure for our team in Paris. There are more developers in Bangalore and Delhi.

I usually talk to my top management everyday. I don’t like checking emails on my handset. I’m an email junkie all right, but definitely not a Blackberry person. I strongly believe that the day you start answering emails on your phone, you are lost. It is the last bastion of privacy. I see people fiddling with their phones during meetings and it annoys me. It’s a way of disrespecting the people you are with. I did break my rule once when I used someone’s phone to check my mail on vacation. I don’t think people need to be plugged to their mail boxes constantly, even at the start-up level. If it’s really that important, people will call you.

In my order of priority customers come first, then investors and shareholders, and then, employees. I believe these people are the live action and I owe them all something. After them, come prospective customers, potential employees, analysts and journalists. The real challenge is to decide what needs attention first. In fact, prioritising products and markets is crucial. Any idea for a new product is discussed for its merit, the size of the opportunity and time required to take it to market. Once launched, a product has to touch a million users in three months. If it doesn’t, we scrap it and move on. We like to make sure that we do our homework well. People often come up with an idea and get swayed by whims. Not us. My gut tells me how much homework is enough and if we are ready to execute. Then we just go all out.

Hierarchy has no place in our office. Our top management knows they cannot pull rank. No debate here ever ends on the basis of someone’s rank. People have to stand their ground and talk it through. We all need to prove ourselves every day. At the same time, I believe that senior people deserve respect because of their experience. Just as junior colleagues have the right to defend their ideas. But once a decision has been taken by a senior, everyone should toe the line.

I encourage a culture of debate. There is something that you can learn from employees at every rung of the organisation. I learnt this at McKinsey. In the US, people are not afraid to argue an idea out. But that usually does not happen in India. People hold back, even if they have a good idea. To prevent that from happening, if an attendee does not speak up at three meetings in a row, I ask them not to attend the next one.

My productivity increases on long-haul flights. My brain gets charged up and starts shooting ideas. I always exit these flights with a large sheet of paper where I have jotted down those fleeting ideas. With the team, I am most productive during our brainstorming sessions. In the earlier days of OnMobile, the meetings were largely about planning new products. Increasingly, we are talking about addressing new markets. Should we get into the Internet space? Should we push into China yet? Should we be a brand and drop white-labelling?

I have not dealt with internal policy in years. I don’t like it, maybe because I’m not good at. My role largely involves customer relationships, negotiations, managing the finances, and working with bankers. I love to get out and face the customer, presenting what we have and closing a deal. With new-age products like ours, this cannot be done over the phone or video-conferencing or through a representative. In a digital company, you are doing things that have not been done before. The client needs to see you, meet you and trust you to deliver on it.

I am paranoid about competition. So, we constantly find ways to serve our clients better. For example, one of our telecom clients faced a huge churn in users—only 50 out of 100 people who bought into our service renewed it. So we put in an algorithm to understand their reasons for dropping out. We learnt how to retain users, and reduced the number of drop-outs without even informing the client about it. We thought of it as micro-tweaking our product. However, we brought it up when it was time to renew the contract. It gave us greater bargaining power.

My stint with McKinsey helped shape the philosophy I adopt at work. It is an expensive consultancy—and deservedly so. Its premium is justified because it ensures a significant impact on client profits. If you will move your client’s profits by only 1-2%, then don’t bother. You have to be able to move it by 10-20%. I call this “moving the needle”. I tell my colleagues every day that if they cannot make a significant enough impact on the people they meet and work with, they shouldn’t bother.

On a personal level, someone who has had a significant impact on my life is my late wife—she even wrote the essay that got me into Wharton. We were friends from a young age, and got married when we were 23. She passed away four years ago. Suddenly the responsibility at a personal level was clearly a lot less. And before I knew it, I was spending long hours at work. Now, I have started to keep a check on that and block out entire days to go sailing. On my 50th birthday, which was shortly after we went public, I gifted myself a Jeanneau 54 DS—a 54-foot yacht docked at the Mumbai harbour. It revives my memories of college days at Madison. I sail for at least eight days in a month.

That is a large part of my personal life. I don’t have any children of my own, but I am very fond of a colleague’s five-year-old son. He is one of my favourite people in the world and is on my speed dial. In fact, I also store miniature cars in my office for him.

As a child, I lived in a joint family with my parents, so I have plenty of cousins and nephews and nieces who I am close to. I have even opened an education fund for the young members of the family. It is for those who get through top institutes in their chosen field, be it music or engineering. The fund ensures they get that education, even if their parents cannot afford it. In a way, the fund is there to encourage their ambition and drive them towards those top institutes. I strongly believe in justice, both internal and external. We have a reward system consisting of variable pay and stock options for our employees. For some of our senior people here, the value of stock options is more than 20x of everything that they have earned in the past four or five years. A while ago, I got a call from one of our earliest employees, a developer, who is now 27. He had just bought himself a BMW and called to express his gratitude. Another employee bought her first house before she hit 30. A deserving employee needs to be rewarded appropriately.

As a company, I want to be treated in the same way. We often come across clients who demand an unreasonable price or, exclusive rights. This makes me sad. Not angry, but sad. That’s because I take pride in what we do; if we deliver a high-value product, we want to be paid accordingly. This is when I politely say “sorry” and walk away. I remember a customer who chose to go with one our competitors, after being turned down by us. A year later, they sought us out again. These instances make me feel glad that we held our ground.

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