On the day we catch up to David Sutcliffe, shares of Sierra Wireless are rocking like a yacht caught in a wild Pacific gale. Which is to say that it’s a normal day in the life of the CEO of this stormy play on wireless technology.

There certainly have been times when Sutcliffe, an accomplished sailor, would rather have been sailing than riding the waves of a wireless firm whose shares peaked at $230 in 1999 before crashing to $2.50 within three years.

But in his ninth year at the helm of one of Canada’s most astonishing technology success stories, Sutcliffe shrugs off the volatility, having learned long ago about the merits of focusing on the big picture.

With Sierra shares in yet another freefall – they’re down 65 per cent since April – Sutcliffe, like a true yachtsman, has his eyes cast on the blue yonder.

1. What career did you aspire to as a youngster?

“I wanted to be an astronaut and as I got older, I wanted to be a businessman. I went to the University of British Columbia to study computer science with the objective of eventually getting some experience in business and ultimately starting up and running my own business. I did not graduate. I did my final year part-time and then got swept up in a business career and, frankly, never looked back.”

2. You worked with Motorola Canada. How did that experience enhance your career?

“I started with responsibility for marketing and engineering. Then, I took on the general management responsibility for a business unit with a global product portfolio.

So Motorola was an excellent training ground in terms of general management skills and international business experience.”

3. Was it an easy decision to leave Motorola and join Sierra Wireless in 1995?

“I thought about it pretty carefully. The founder of the company and CEO that I was taking over from was Dr. Norman Toms, who I had worked with at Motorola previously, so we knew each other. I met with him several times before taking the job and also met with the board. I was very optimistic about prospects for growth in wireless, and in wireless data products in particular, the area in which our company specializes. I had a background in wireless data technology at Motorola, so in evaluating the opportunity at Sierra Wireless, I certainly understood the technology, the market and the business opportunity it represented.”

4. During your tenure as CEO, you’ve seen enormous swings in Sierra’s share price. How did you feel when Sierra stock was trading at $230 at the pinnacle of the tech boom in 1999?

“For those particular five minutes? I didn’t really have a lot of time to think about it. I was busily running the business at the time and the day-to-day and minute-to-minute movements of the stock market are something that I think one should not pay too much attention to. It can be very distracting. We focused on building our business and the proof of that is we not only grew during the bubble – I think we put on 120-per-cent top-line growth in 2000 – but we also grew approximately 15 per cent the next year when the bubble had burst. While many companies, including some of our closest competitors, were shrinking year over year, we continued to grow year over year.”

5. How did you come to terms with the reality of having to restructure your company during the downturn in 2002?

“We realized through a series of developments with our customers and business partners that the downturn was probably going to be deeper and longer than we’d originally anticipated. At that point we decided to do a very significant restructuring of the business and put ourselves on a footing where we would at least be a profitable company, even if the market itself was challenging. We realized that by being at break-even (financially) or profitable, we would have the ability to conserve the cash on our balance and to ride out the downturn, no matter how long it took. The job cuts (95 of 275 employees in 2002) were the hardest thing to do, by far. When you’ve built up a company over time and then you have to reduce the staff by about a third, that’s very dramatic. Since then, it hasn’t been a hiring boom or anything, but we’ve been gradually hiring people.”

6. Was there ever a time when you wondered if the company would survive?

“Going back several years to the early stages of the company before it was a public company, there were some very significant challenges with various financing rounds, and there were days I wondered. But in the last five years, during which we’ve become a public company and grown significantly, I’ve never had those kinds of worries or doubts. In the early years of the company, I was what you would call a sweat-equity investor, putting in my time and energy at below- market compensation, hoping to build significant equity value in the business. But I did it because it represented an opportunity to really build something world class, and do it from an early stage.”

7. What’s the most valuable lesson you’ve learned at Sierra?

“It’s been a reinforcement of something I’ve been exposed to during the course of my career, and that’s the tremendous importance and power of teamwork. The culture we’ve built here is a very strong team culture. We focus on going out and hiring the best and brightest people in the industry and then developing those people and retaining them. To accomplish that, you have to create an environment where they can have individual challenge and reward, but it also has to be an environment where there is very strong teamwork.”

8. What’s the key to developing a winning team and instilling loyalty in employees?

“Well, I think that you have to understand that when you’re working with people in a business environment, you have an exercise of figuring out at any given moment what the business needs to do and you also need to know what the motivations are of the individuals you’re working with. You need to know what really gets them charged up or what things are negatives or frustrations to them. As a leader, you’ve got to put together a group of people who can work effectively together and ensure that each individual can achieve what they want to achieve. In my experience, some people approach this complicated job in an overly simple way. If you just say, ‘Look, here’s what the business needs to get done and everybody’s got to go in this direction,’ that overweighs the business objective and doesn’t factor in the human dimension. If you go the other way and just try to make everybody happy all the time, you’ll never get any business things done. So it’s a complex balancing act between the two.”

9. What’s your strategy in growing Sierra?

“Since the time we did our restructuring over two years ago, we’ve had a strategy of profitable growth and we’ve put in eight consecutive profitable quarters with positive cash flow.

“The strategy has been to focus on our core markets and on our core technology platforms, and look for ways to add more products, whether that’s new models or variances of existing product lines. The idea is to keep incrementally adding new products and new market segments that allow us to grow the top line and to do that at a pace consistent with keeping the company profitable while it grows.”

10. Is the current market ripe for acquisitions?

“We’ve done two significant acquisitions in the last nine years, so we’re not a company that has relied on acquisitions to drive top-line growth. But we have done them when we’ve seen good quality opportunities.”

11. Geographically, where’s the hot market over the next few years?

“Our focus is in North America, Europe and part of the Asia Pacific region. Today, our strongest-performing market is North America and I expect the highest growth rate to come out of Europe or Asia Pacific. Europe has very significant growth opportunities for us and the bulk of our Asian business is concentrated in China – I see that as a long-term growth market.”

12. Do you anticipate spending in the wireless sector to increase in 2005?

“Yes. But let me say that you need to think about how you define spending. Some people who track the wireless market define spending as capital spending on carriers deploying new infrastructure. In our case, we’re more interested in corporations and governments spending to adopt wireless technologies in their operations. I expect that form of spending to increase in ’05.”

13. How significant do you anticipate sales of the Voq smart phone to be toward Sierra’s growth?

“I expect it to be very successful commercially and we’re off to a great start with it initially. It’s too early to start filling in a scorecard on it yet. We’ve targeted the product to be launched in Europe and North America. We’ve seen a series of very favourable reviews for the product in industry publications. And we’ve had a lot of feedback from our target markets of business and government, who are telling us this is just the sort of product they’ve been looking for.”

14. Do you think there’s too much emphasis on the issue of the same person serving as both chairman and CEO (Sutcliffe is chairman and CEO of Sierra)?

“I think it’s an area of emphasis and I think in a way it misses the point. In our business, I’ve been serving as chair and CEO for the past three years, and on our board we have a lead independent director. The emphasis of separating the roles is a little simplistic. It suggests that a strong-willed person who combines both of those roles is able to dominate and unduly control the board.

And I think that where that happens, it speaks more about the weakness of the other directors and the rest of the institution than it does about the overpowering strength of one individual. Certainly, I don’t think giving a CEO a title of chair turns a person from a contributor to the business into a threat to the business. If you separate chair and CEO roles, you won’t necessarily prevent any of these disasters. You need to do more than that. You need to avoid situations where the CEO, regardless of title or titles, is able to control the entire enterprise without any checks and balances. That’s the real issue.”

15. Ideally, how long do you wish to remain as CEO?

“Oh, I don’t know. And if I knew, I couldn’t answer, as a public company CEO. I’d be putting a date on a calendar. Then, I’d have all kinds of market watchers phoning me. Right now, I’m 44 years old, I’ve been CEO of this company for nine years and they’ve been nine very full and rich years. I plan to continue doing the job indefinitely and the end of indefinitely is when my board decides that it’s time for a change.”

16. At what point, would you be comfortable putting your feet up on your desktop and saying, ‘I’ve done it?’

“The objective I had in coming into this company was two-fold. One, it was to build a world-class company and, two, it was to earn for myself and the other stakeholders the rewards that go with building a world-class company. Today, I would say we’re part of the way along that path in building a world-class company.

“Annual revenues are on a run rate approaching $200 million US. That’s from zero 10 years ago, so in one sense we’ve built a very substantial company and we’re profitable to boot. On the other hand, many of the companies in the wireless communications arena where we work are multi- billion-dollar companies. While we’ve built a pretty good company in 10 years, it’s still relatively small compared to the industry giants that populate the wireless equipment arena. So I think we’ve got a ways to go before I can say it’s a world-class company and put my feet up on the desk.”

17. Are you one who pauses occasionally to celebrate the victories and milestones?

“I do my best to do that. You’ve got to get your nose off the grindstone to be able to do that, but that’s something that we make a point of doing.”

18. You take a day off tomorrow and turn off your cellphone? How do you spend the day?

“I’d probably go sailing, or skiing if it was winter. I’ve got a young family and we’d be doing something together. It’s important to balance your life. I don’t think you can stay in this kind of role in a high-growth, high-change industry long term unless you find some effective balance. And frankly, there are very few people in this role in a company who have been in the role for this many years.”

19. If you had to trade places with one CEO for a day, who would it be with?

“If you could trade places with the president of an airline for a day, you could actually make business travellers happy for a day.

That would be worthwhile – getting a chance to focus on some improvements. I can’t think of any particular airline, though.”

20. What’s your next great challenge beyond business?

“You know, whatever it is, it’s still a twinkle in my eye so I don’t know. I just did one this summer. For many years, I’ve wanted to do an ocean yacht race that is run every two years from Victoria to Maui (the Vic-Maui International Yacht Race). So in June I did that. It was 16 days of sailing 24 hours a day with a team of 10 people.

It made me forget about business. I wasn’t thinking about business at two o’clock in the morning in the pitch black, sailing down the big waves of the ocean. We didn’t win the race, but we finished without a lot of damage to the boat.”

THE COMPANY: Sierrra Wireless
* Brass: David Sutcliffe, CEO/chairman; Jason Cohenour, chief operating officer; David McLennan, chief financial officer.
* Profile: Sierra develops and manufactures wireless modems and software that allows users of hand-held, notebook and vehicle-based computers to connect to the Internet over cellphone networks. The company’s key markets are mobile professionals, public safety organizations, field service organizations, transportation companies and financial services companies.
* Key Partners: AT&T Wireless, Compaq, Hewlett Packard, Verizon Wireless, Microsoft.
* What’s New: Sierra recently launched a new product known as Voq, a wireless mobile-based smart phone.
* Recent Stock Price (TSX:SW): $20.26 (52-week range, $18.50-$61.33).
* Website/E-mail: www.sierrawireless.com/info@sierrawireless.com
* Headquarters: 13811 Wireless Way, Richmond, B.C., V6V 3A4.
* Phone/Fax: 604-231-1100/231-1109.

IN PROFILE: David Sutcliffe
* Title: CEO/chairman, Sierra Wireless.
* Born/Raised/Age: Vancouver/44.
* Education: University of British Columbia (computer science, did not graduate).
* Career: Sutcliffe joined Sierra Wireless as CEO in 1995 and was appointed chairman of the company in 2001. Previously, Sutcliffe was president and CEO of Xillix Technologies. He began his career in technology with Motorola Canada, where he held various positions, including vice-president of the mobile data division. In 2000, he was elected chairman of the Wireless Internet Caucus.
* Passions: Sailing, hiking, mountain biking.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)