Why the Company Built on the Mouse Is Going All-In on Gaming | Leadership Next

Speaker A: There's too many screens, there's too many devices. How do you solve for that?

Speaker B: There's definitely a segment of the consumer these days that is tech tired. And I, you know, I count myself amongst those. I think tech is best when you actually don't know that it's there.

Speaker C: Hi everyone. Welcome to Leadership Next, the podcast about

Speaker A: the people and trends that are shaping

Speaker C: the future of business. I'm Diane Brady.

Speaker A: And I'm Kristen Stoler.

Speaker C: And this week, Kristin, we are speaking to the CEO of Logitech, Hanika Faber.

Speaker A: Yes, we chatted with her at our most powerful women's Summit in Washington D.C. and I think my favorite part was the fun fact she gave me that the plural of mouse is mice.

Speaker C: Okay. And of course we were talking about what attaches to one's computer. This is kind of an old line brand and she's brought a lot of innovation to it. I'm fascinated with the partnerships they have with Nvidia, with Apple, with others and of course gaming.

Speaker A: Yeah, when I think of it, I think, you know, back in my Skype days when I would plug my little Logitech, uh, webcam into my computer with a usb. And now the gaming sector is so interesting because they are making these mice, they are making all of these products specifically so that players can be faster, perform better, which I think is really cool.

Speaker C: Well, and of course AI has an impact and ultimately this is design thinking, I think, at its best. Which is how do humans behave, how do we interact with machinery and how do you then create an experience around whether it's gaming or the workplace? Logitech and Hanika Faber thinking about that.

Speaker A: Yeah, it was a fascinating conversation. Let's listen to it now.

Speaker C: Earth observation technology is transforming industries by offering vital data that improves decision making, reduces risks and boosts efficiency. We are here with Jason Garzatis, the CEO of Deloitte us sponsor of this podcast. Great to see you.

Speaker D: Great to see you, Diane.

Speaker C: Earth observation. So what is it and how can it help drive value for business?

Speaker D: Earth observation really means the collection, uh, of data about the natural events and man made events, uh, captured from all the satellites in orbit. We've seen a, ah, real explosion in the number of satellites. Over half of them are commercially owned at this point and that number continues to go up.

Speaker A: Jason, I'm curious, what are some promising trends and why is right now a good time to be talking about Earth observation?

Speaker D: I think the um, uh, realization, particularly amongst commercial enterprise, that this data is providing new insights and it's now at a cost effective point in its development for all sorts of organizations in different sectors.

Speaker C: So I'm curious, are there a couple of examples of ways to use this data that you'd want to share?

Speaker D: I think some of the areas that, um, are particularly exciting is in the agricultural space when Earth. Earth observation data can be used to monitor stress on crops and different weather cycles. I think also, ah, very complex supply chains that, uh, may have operations and, uh, hard to access or more distant, um, uh, elements of supply chains, whether it's in utilities or in oil and gas. That's opening up a whole new frontier for, uh, cost effective, insightful data that can be used to innovate as well as to achieve, um, cost leadership.

Speaker C: Fascinating stuff. Thanks, Jason.

Speaker A: Thank you.

Speaker D: Thank you.

Speaker A: Annika. Thank you so much for being here with US in Washington D.C. at the Fortune Most Powerful Women Summit. We really appreciate you coming in.

Speaker B: Thank you. Thanks for having me.

Speaker A: Of course. So I want to start with what I find the most fun about you, which, um, is that you were a competitive diver in the Netherlands and then also in college at University of Houston. Is that correct?

Speaker B: Go Cougs.

Speaker C: Oh, um, my seven time champion. Yeah. Tell us about scariest sport ever.

Speaker A: Yeah. Diane is terrified of diving, by the way.

Speaker C: Um, tell me about me.

Speaker A: You're right. It is about Hanukkah. Tell us about that. Why did you do it? Why did you stop? What lessons did you learn?

Speaker B: Yeah, um, I started as a gymnast, but m. You know, at like age 11, I was 5 9. And this is not good for gymnasts.

Speaker C: So, um, you kind of become obsolete at puberty in gymnastics in general.

Speaker A: Yeah.

Speaker B: But certainly at 5 9. So, um, um, I happened to be in a pool and I had watched the Olympics on tv, so I was doing flips off the diving board thinking I was some Russian, you know, competitor. Unfortunately, I was a dive team there. And long story short, they said, would you like to join? So became, um, a competitive diver. Went to the world championships when I was 16 and was lucky enough that the US coach at the championships was the coach at the University of Houston. And he said, would you like to come to Houston? And this is before the Internet. So my parents and I looked at an atlas and we said, houston, where is that? It was in the orange zone. Um, that means warm. We're like, yay.

Speaker A: But may.

Speaker B: In Holland, it rains all the time. So, um, ended up at the University of Houston. And I will be forever grateful for the chance to come to America and, you know, get an education here. My parents would never have been able to afford to send me here. So to be able to do sports and get an education, um, was just a wonderful opportunity.

Speaker C: Well, college in the Netherlands tends to be free. I always think about that from a. But let me, you know, one of the things, uh, before we move on from diving, I did say it was curious, but it is a sport that is so much about just plunging into the unknown. Like, I would love to just unpack that a bit. What are the qualities besides being able to do flips that you think make for a world class diver?

Speaker B: Yeah, it's a combination of kind of craziness and discipline. So you're up on a 10 meter platform, 33ft up in the air. So you're taking risks. Um, and I think that has really helped me actually in business because when someone says, oh, aren't you scared to, you know, do a big presentation or you propose this to the board? I'm like, have you been on the 10 year platform and done a reverse two and a half? That is scary. This is, yeah, not very scary. So I feel that is a really great foundation. And then of course there's discipline. The 10,000 hours that you must put in, uh, every morning at 6am you're at the pool, um, doing literally thousands of times of the same thing. And that kind of hard work and discipline combined with the craziness and the taking risks and the thinking big, it's a pretty good combination for life and work as long as.

Speaker C: So you've got a fascinating background, but I feel remiss if we don't start with Logitech and tell us a bit about the space that you're in and what you think is underappreciated about that. Because I think of you as sort of the forefront product for gaming, etc. I mean, give me some sense as to the scope of the business.

Speaker B: So we, um, are, let me start actually with our purpose. So our purpose is to extend human potential in work and play. We're a tech company, we make technical products. But what we're all about is making humans a little better. So those words are carefully chosen. Extend is a riff on the mouse. The mouse built this house. That's how the company started with the mouse. We're by far the world's largest maker of computer mice. Um, but it's about extending the human and what the human can do and leave. We do that by making people a little more productive, by helping people perform better as they game. A third of our business is in gaming. We do that by helping people connect a little More easily. We're the global market leader in video conferencing. So you know, all those meetings that you have on Zoom, they're enabled by our software enabled hardware. So, um, extending human potential in work and play. That's why we wake up every morning and then we do that with design LED software enabled hardware. You think of us maybe just as hardware. Your mouse, your keyboard. Um, but we start from design. We have 300 designers in house. I, um, used to work at big, big companies. We have way more designers in house than huge companies like that. And those designers are all about understanding the users so that we can understand the users up front and design beautiful products. We make hardware, but the hardware software enabled, it's chock full of software and AI these days and we employ more software engineers than hardware engineers. So, um, all that ends up with, I think, beautiful products that again, extend the human potential. And in today's day and age of AI, that is a very sexy and exciting space to be in.

Speaker A: Yeah, I know we want to come back to AI and gaming both. But before we do, I, I'm just fascinated by like behavioral psychology and design psychology. So, so is there anything surprising about, you know, the way you design your mice or your keyboard and mice is the version of mice. Okay, just want to check on that. Um, but is there any, you know, interesting insights about how you design things based on human behavior that you could share with us?

Speaker B: It's critical to just get close to the user. So I'll give you two quick examples. Um, in gaming, we work very closely with pro gamers because gaming is not just gaming. Gaming is a sport. These days. We work with more than 300 pro gamers, more than 40 gaming teams. Um, and we don't just sponsor them, we co develop our products with them. So now of course, they want to move faster and, you know, shoot their strike. Exactly. So we just launched a new Super Strike mouse developed with Pro Gamers that uses, I won't get too technical, but it uses haptics so you actually feel better and you shoot faster. The pro gamers that we developed it with, when we finally presented the final product a couple weeks ago, they were like, oh my God, this is almost like cheating.

Speaker C: Oh, it's like those suits that swimmers wear that make them too fast.

Speaker A: Right.

Speaker B: Almost like cheating, though not quite when

Speaker C: you say, okay, so I may m. Do have to unpack this a little bit. So Super Strike haptics. What, I mean, what exactly are you doing that makes them think, wow, this is a whole new level, Right?

Speaker A: Like does it vibrate? Like what are the.

Speaker B: Exactly, Exactly. So it replaces the traditional switches in the mice with these new induction analog switches with haptic feedback. So not only are those faster, but you actually feel it and that improves performance by quite a bit in games. So that's fun. So that's one example of being really close to the user. Another one is more on the work side of our business. Um, this goes a few years back, but it's still the case during COVID when everyone started working from home. What we found with which is very interesting is that the men got the home office and the women were in the kitchen.

Speaker A: Yep.

Speaker C: Go figure. Yeah.

Speaker A: So baking the sourdough eggs.

Speaker C: Well.

Speaker B: Or working very non ergonomic circumstances on their kitchen table.

Speaker A: Yes.

Speaker B: Um, and getting like shoulder problems and all kinds of problems. So one of the products we developed then from that insight of being close to the users is called a cassette pop up desk. That's an ergonomic keyboard mouse that you can fold up like a book. It looks actually really nice, but it's still ergonomic for places that aren't necessarily meant to work. So that's just another example of an insight. And we again, all those designers, um, and our product people, we always start from really understanding the user.

Speaker C: So you grew up in the consumer products business. Let me go back a little bit, um, to the fact that you are Dutch. And I've always been struck by, first of all, the entrepreneurial energy around the Netherlands. You know, you've got Paul Pullman, Warner Vogels of Amazon. I could go on Mars. What is it? Tell us a little bit about when you grew up. What do you think has made the Netherlands such an incredible and underappreciated country when it comes to even exporting food? I'd love to hear a little bit about just the culture there.

Speaker B: We're a small country, a very small landmass, only 17 million people big. You know, it's a small place. We speak a language, a small language. So you grow up, you grow up with, you know, foreign tv, hearing English in the movies on tv, traveling, because you only have to travel like half an hour and you've left the country from any places in the country. So it's a pretty. Even though, like it's not a rich upbringing or anything, but it's actually pretty international just by being where you are and then in school, because our language is a small language and we're a nation of traders. Um, um, everyone learns at least four languages in high school. And if you go to like the higher level of high school that I went to, you learn six, and this is normal.

Speaker C: So what are your six languages?

Speaker B: Yes. So Dutch, English, French, German. And then you take Latin and Greek, which at the time I thought was useless, but I ended up marrying a Greek American, so. Oh, wow.

Speaker C: Yes.

Speaker A: I'm going to take it back to the tech because I find what you do so interesting. And I also think about. We're at this moment where I think a lot of people are feeling tech fatigue and screen fatigue.

Speaker D: Yeah.

Speaker A: And, you know, I see Gen Alpha buying the flip phone that I had when I was 13, and I wonder, like, how do you think about that at Logitech?

Speaker B: Ah.

Speaker A: If there's such an overwhelming sense of, like, there's too many screens, there's too

Speaker B: many devices, there's definitely a segment of the consumer these days that is tech tired. And I, you know, I come myself amongst those. I think tech is best when you actually don't know that it's there. So one good example of that, another recent launch is a solar keyboard. Um, and why do I say that? Of course it's cool, but it's wireless and you never, ever have to charge it. It can live for four months in absolute darkness. And if you take it out into a room, it doesn't have to be out in the sunshine, it will recharge. That, to me, is an example of tech that you need a keyboard, but tech that you don't have to worry about, tech that doesn't intrude, tech that doesn't break, um, or stuff also, like, is really, really durable. So, um. Yeah, but I think you're right. So we, again, we tried to design for that cohort as well.

Speaker A: Interesting.

Speaker C: You know, I think about the movie Minority Report, where you're just pointing to your fridge, you know, you're pointing. So this almost post. It's not post hardware because the hardware is embedded elsewhere. How does that future impact the way you think about your business?

Speaker B: Well, as I said before, hardware really is sexy. In the age of AI, of course, AI is everywhere, and AI will continue to be everywhere. For us, AI is incredibly strategic because if you think of AI as like an extension of the human brain a little bit, you know, we all have like, some extra brain power thanks to AI. That extra brain needs inputs, um, needs data, needs information to work better. We are the eyes to ears, the hands of AI, our products, our cameras, our headphones, the mice to keyboards. So we play a really, really key role, um, at this time. Um, and what we're finding in our work every day is that it makes our products smarter. So, um, uh, one of my favorite new products is called a sight video conferencing camera. You set it in the middle of the table and it's almost like have Steven Spielberg producing your video conference. So you know the point where there's like 12 people in one room and then you have the screen, right? And that poor person, or the poor people on the screen, they can't tell who's speaking. They only see that long table. This thing zooms in on the person who's speaking. If there's two, it puts those two people on the screen. It knows, thanks to AI that if you are touching your keyboard, it knows you're not talking, that that's actually a keyboard. If I'm opening a packet of chips, you. It also knows not to focus on me. In this world where AI is everywhere, we're excited to be the eyes, the ears, the hands of AI. Uh, because you need the hardware to make sure the AI has the data, the information to be truly smart. So that's cool. And it's making our products smarter every day. Whether that's video conferencing, two way noise cancellation headsets, you name it. Um, so a lot of opportunity in our products, um, and then of course in the company. And um, we talked about this at the conference. Um, you know, we've created more than a thousand AI agents internally since January. And it is making us most productive.

Speaker C: Is there a particular agent that does something cool that's maybe not obvious to us?

Speaker B: We've created more than a thousand AI agents since January. Most of them actually are rather mundane. So if I look at the thousands, maybe two or three are really going to be home runs inside the company. 200 probably are not useful.

Speaker C: Mediocre employees don't have to pay them.

Speaker B: Really not useful at all. So we'll get rid of them. Then there's 800 that are, you know, give us incremental productivity benefits in all kinds of spaces. Um, outward facing customer service is a big one. Marketing is another big one. Coding, of course, you know, we're company of engineers is a big one. Um, but all those incremental benefits of 800 agents in nine months, that helps on productivity. And I'm excited about that because it will help us grow faster with the same amount of human resources. And that's I think the cool thing here we are working smarter to grow faster, not to become a much smaller company in terms of number of people.

Speaker A: One of the things you've spoken about that I Find so interesting is this idea of, like a forever mouse, a super mouse that you're going to have that's durable and there could be a subscription service. Can you tell us more about that and what you mean when you say, you know, a forevermouse?

Speaker B: Yeah, the forevermouse. That idea was not very well received by the Reddit, uh, community. And I didn't really mean a forevermouse. What I mean is durability is critical. And that means. Because that means quality. We're all about quality. So you don't want things to break down in one or two weeks, which happens to some of our competitors. So durability is key. And I think beyond durability, repairability and refurbishment from a sustainability angle is also something our especially Gen Z consumers really, really want. So we've been investing in replaceable parts, um, and working with a company called Ifixit, so that it's easy when your mouse, after 10 years doesn't work anymore, to fix it and to give it another new life. So that's.

Speaker C: And yet you want to build sales. So there's the upgrade, the subscription.

Speaker A: It was popular with me because I hate having to get new things. I hate when tech breaks. Yeah, yeah.

Speaker C: So you grew up in consumer products. Let's go back to that. What do you learn from manage like, you know, shampoo, et cetera, P and G, Unilever, that applies to this business? Because I think those are, uh, you've those two brands understand their customers like few others, and they can slice and dice their demographic base. Give me a sense of what you took away from that.

Speaker B: Yeah, yeah. Sometimes I have to pinch myself. I'm like the Silicon Valley tech CEO now. And two years ago I was selling ice cream and mayonnaise.

Speaker C: A basic human need, I might add.

Speaker B: Yeah, absolutely. And I love that too. So, um, um. But what I learned there, I think especially I started my career at Procter and Gamble, which is such an outstanding school, and A.G. lafley was the CEO for much of my time there. You know, his big thing was the consumer is boss. And that has always stuck with me. You have to listen to your user, your consumer.

Speaker C: And design thinking, too, is what he's known for.

Speaker B: Yeah, design thinking as well. So. But I would say at Logitech, we've taken that to another level, which is. Which is fabulous. But, um. But if you don't make the consumer happy, then you cannot make any of your other stakeholders, including shareholders, happy.

Speaker A: One very smart woman today that I was speaking with on one of my panels here at the conference had this great quote about we should be celebrating all of our failures, especially in the tech industry, because it means we're innov.

Speaker B: Yeah.

Speaker A: And I'm wondering if there's a story you could share with us of either a big failure and what you learned, or a pivot you had to make and any really pivotal moment for you that stands out.

Speaker B: So I think at Logitech, when I joined, um, we were just coming off a massive sugar high from COVID right when everyone was at home. So the work side of our business was. I was really on a sugar high and everyone was gaming. So we had had, um, many quarters actually of decline when I came in. So the first thing to do was take the company back to growth, which we've done and we're in a really good way now and growing very robustly. But looking at the strategy, I think one of the things where we just acknowledged that we made a mistake was um, the company had said we're going to go for a multi brand strategy, um, which is great for some companies, but the Logitech brand itself is a great brand. And so buying other brands, trying to build other brands beyond Logitech. And I think as a leadership team, we came to the conclusion that that actually was not a good strategy because it was scattering our resources all around. And the Logitech brand is a fabulous brand with very broad shoulders. Um, it's known around the world. If I get in a taxi in Shang, they know what Logitech is, but also in Kazakhstan or Belgium. So it's fabulous. And it appeals to the 16 year old gamer as well as the CIO because we have a huge B2B business market, uh, leader in video conferencing. So I think one of the mistakes that we made was, you know, trying to be a multi brand company. So we've changed that. We are 100% focused on the Logitech brand. And again, that has broad shoulders. So we can innovate under that brand and build that brand.

Speaker C: I think about gamers and a, uh, stereotype comes to mind. I'll say positive because I've got children who are gamers.

Speaker A: We both have gamers in our family.

Speaker C: But what have you discovered? Is there any sort of small stories in terms of what you discover through how people use the technology even in different parts of the world that you think are just made? You think, huh, that's interesting.

Speaker B: I think one of the things that I didn't realize before I joined Logitech is how huge gaming is. Two thirds of Americans, game not just men. It's almost 50, 50 male and female. And gaming as a form of entertainment, um, more hours are spent on gaming than on movies and TV combined. So it is huge. And this is not just in the U.S. um, you know, China is the world's number one gaming market actually. So it is very, very large. I think within that one underappreciated part, uh, another one that I wasn't really that aware of is actually simulation and especially racing, um, which is such a fun part of gaming where you're simulating actually being in Formula one or in NASCAR or whatever other game. And that is a super fun one because it's also social. It's for, you know, the target user that we target with that is, we call them kidults. It's the father or the mother who feels a little guilty on the weekend about not spending enough time with their kids and kind of wanting to game themselves. But when you have a racing sim, um, at home and you have that wheel, you can actually play that with your kids and you're racing together. And it's kind of the new version of a board game. Um, so I love that space. Again, we just launched a whole bunch of exciting new products with McLaren who are doing great in Formula One and um, it's a big growth area for us.

Speaker A: Where do you see, um, the biggest growth opportunities in the future? What is, what are some new, any new products you can see? Any new exciting things that's coming up?

Speaker B: Yeah, so we have a great portfolio. So about a third of our business is video conferencing. And with every company after Covid rethinking the ways we work, with more work happening, um, on Zoom or Teams or Google, that's a big growth space for us. And there's constantly exciting stuff coming out in that and for offices because back to office is also a big trend. Um, so actually we just launched, um, an environmental sensor for the office so that um, workplace services can know is a room. First of all, are there people in there? Should we have that room? But second, um, what's the temperature? What's the CO2 in that room? Is it a healthy atmosphere? It's called the Spot. It's just one time invention of the year actually.

Speaker A: Wow, congrats.

Speaker B: So that's cool. So that's kind of for the, the, the for work side professionally. Then there is gaming, which of course is a big macro trend. And again as the number one globally gear provider, um, that will be, that is big for us and is a big growth space. And Then there is the, you know, our bread and butter we called personal workspace. The mice, the keyboards, the webcams that you have at home and in the office. And because all of us post Covid are working in more than one place, you know, and not just at home and in the office. But I'm sure you guys are prime examples of this, um, in cafes, on planes, on trains. For us to provide the tools for people to do that in comfortable, ergonomic, fast, accurate ways is really big. So three big pillars. Um, we call it B2B, personal workspace and gaming. And all of those have great growth opportunities. So, um, this is an exciting place to be.

Speaker C: I can't think of many industries, whether it's tech, gaming, et cetera, where you have to earn the trust of your employees. You're dealing with creatives, you're dealing with software engineers. I know you're on the board of Tapestry, so I'm sure there's a lot that you've learned about leadership through that. But what have you found to be the ways that you both assert yourself as the leader but engage these groups that I think of as hard to win over and, you know, because they're the experts, you're coming in. Give me a sense of your philosophy for how you get things done and get them moving in the same direction.

Speaker B: Yeah, so I think it's a combination. I call it, maybe call it a leadership philosophy, but doing well by doing good. So doing well is what we talked about earlier. I want to win. Um, and we're going to think big, we're going to take some risks, we're going to double the size of this company in the next few years. So that's the one side and that gets people excited and how can they contribute? By doing good is all about values. Um, and one of the reasons I joined Logitech is their values are super Strong. Their number one values for its entire existence, 44 years this month, is equality and environment. And that's not new. That is not a fad. That is in the genes of this company, and especially in the last year, that has been very important with employees. You know, so many people ask me, is this still true? Is this still our number one value? And absolutely it is. And that is not charity or anything. Equality is super important for us because we're a global company, 150 countries that we serve. I must have diverse teams, otherwise we are not going to win. Um, and diverse in terms of nationality, ethnicity, gender and many other things.

Speaker C: Does it matter? Being a Swiss based, it's a good

Speaker B: time to be Swiss.

Speaker C: What does that mean? Neutral?

Speaker A: Explain please.

Speaker B: Yeah, yeah, yeah. And we joke about being Swiss but being, you know, and we're dual headquartered Swiss and Silicon Valley, we're dual listed NASDAQ and smi. But that combination is a strong combination because the Swiss have the neutrality. We work with everyone, you know, at video conferencing, we're deeply integrated with Microsoft, teams with Zoom and with Google. So we work with everything. We work with Apple so uh, we're neutral in that respect. But the Swiss are also, you know, precise. They have a really long term view on things. They've been around for a long time. All of those things are good. If you combine that with the dynamism and the innovation of the Silicon Valley, you get a pretty potent mix and that's really what this company is all about. So um, that's an exciting thing.

Speaker A: Well, thank you so much for joining us. Great words to end on.

Speaker B: Wonderful. Thank you for having me.

Speaker C: Thank you, thank you.