 Hello everyone, we are here with Breck and Darryl, the CEO of Logitech. Thank you very much for making the time to speak to us. And look, I am a customer of Logitech for a long time. Thank you. You're paying my salary. And I can see a massive change that Logitech is promoting. I would say in the past five, six, seven years. So it's a big change. So can you give us some background of what is going on? What happened in Logitech a couple of years ago that drove all this need for change? Yes. So Logitech is a company that was founded in 1981. So we're not a young company. And almost every company, if they're around for a while, whatever got them, that early growth curve usually levels out and then starts to decline. And they have to find new growth. And so Logitech is no different. So we started out growing about the back of the PC, you know, first the mouse, then keyboards and headsets, PC speakers, webcams. So we grew and grew and grew. And then in about 2008 the music stopped because the PC stopped growing, more and more things were being integrated into the PC and so our business stopped growing and started to decline. And so in 2012, 2013 we, first of all, we restructured so we changed the size of the company. Then we started, we moved resources out of the core business, that PC business and put them into new things, R&D resources. The most important thing we did, I'd say besides that, is we said we're going to become a design company. We'd always been pretty good at products, very good. But we never, you know, just said we're going to be a design company. What does that mean? That means we put you, the user, in the center of everything we do from a product standpoint and we started staffing up. I hired a head of design, former head of Nokia design. We built design principles. He and I then built a design team, or he built it and I helped. 150 people around the world. And then we started unlocking the technology that was always there. And so then we started to serially enter new categories. So we went from, first we went into video equipment, we went into Bluetooth speakers, then we went into home cameras, security cameras, then we, they went into earphones. And so we're serially entering these new small categories where we think we can lead them. And that's really what we went up to. And we're multiple brands now, not just Logitech or Astro, Blue, Logitech, Ultimate Ears. So it's super exciting. Yeah. And of course, during this journey, it's very easy to tell backwards. Yeah. But can you share with us a little bit more of the challenges of that? Because sometimes you have great ideas, but to transform them into reality, there is a clear gap. You know, people don't want to move. People don't want to change. People see this kind of restructuring as a challenge to their jobs or to their lives. So how you were able to drive this change? Well, I think there's been so much written about change management that I won't go through and give the list of change management principles by the various experts. Your viewers can find that on their own. I'd say I'll just make one point, which is two points. Point one is it's easier to change if you're in the middle of a crisis. And we're in the middle of a crisis. At least we felt like we were. I was brought in because of that crisis. The former CEO had to leave. They brought me in. It's a crisis. On the flip side, it's also easier to change if you have one organizing principle. So the organizing principle was we're going to be a design company. So that forced a whole bunch of other changes. And you know, people either get on board or they don't. But in the beginning, it was hard because people thought design, God, Brack, you're going to screw up this company. We're going to become a decoration company instead of a technology company. So I had to learn how to articulate that better to, especially the engineering teams. Our goal by being a design company was to unlock the power of technology. The power of engineering. It's wasted if you don't do it against real user needs. So I made it through that little hump somehow without the mutiny that I almost could have had. And I would say from there it was actually relatively smooth. Yeah. What you just said is amazing. So you said we have a very burning platform. If we don't change, we are dead. But several companies would love to learn a little bit before because you don't need. We did a research last year talking about leading from crisis. And one of the key principles is that on crisis, people move much faster. You said, but how we can learn from that and avoid, for example, incumbent organizations that are not on crisis now, but they will be soon if they do not move. Well, I'm actually going to publish a LinkedIn post. Probably it's already up now. People are watching this about reinvention. Because I think whether it's a company or you as an individual, you've got to constantly be trying to figure out how to reinvent yourself is almost a cliche. But I'll tell you how I did it. So after I'd been here for five years and we had a good track record. We've grown double digits the last three years. Our profits quadrupled. Our stock price up 600%. By any measure, people would say, ah, well done. But the truth is we're not even close to done. And we're going to be more different five years from now than we have. We're five years, these last five years. So I asked myself, am I the right guy to do this job? Because I was apparently the right one for the first five years. But we're going to be totally different five years from now. So I wrote down a list of what I thought the person should look like. And I kind of compared with my background. I thought, you know, I'd be a pretty good choice. But it was a Monday night in January, by the way. I'd be a pretty good choice. But I have one problem, which is I'm getting at the problem you raised, which is I know too much. I picked every player. I helped decide every strategy. I worked on and touched most of the products. What do I do here? Because I'm not objective anymore. I mean, I'm going to have to take this place apart again, or somebody's going to take this place apart again. And it can't be me if I own it all. On the other hand, I'm the right person for the job. So I decided I'd fire myself. So I fired myself that night. And I didn't know what I would do the next morning, but I didn't tell anybody. I just fired myself. I said, I'm going to sleep on this. I went to bed, woke up the next morning, and it was totally clear as it often is when you sleep on something. I rehired myself on one condition, which was no sacred cows. Nothing, no person, no strategy, no product. Nothing, nothing is sacred. It can all be thrown out and start over again. And that sounds brutal and cold-blooded, but I meant it. And then I shared that with my leadership team three months later after I already started making moves. And I said, now I want you guys to do the same thing. And then later I said, and if you don't fire yourself and rehire yourself, I'll fire you. And I won't rehire you because you've got to have the courage to do it. You've got to have the objectivity to do it. So I think this mentality of always trying to get back to feeling like a newcomer, getting the newcomer's advantage back is a quest that all of us have to go after all the time. And if you don't, in a world that's getting faster and faster and faster, you're falling behind. It's a fact. Because somebody else is going to be a newcomer and you're not. So you have to find it. You have to find it every way you can. And one of the things I do that is really helpful is every new employee in the company, they have this big advantage that I don't have anymore. They're new. So I talked to every employee in small groups in the company. I say, now I have one favor to ask you. I've talked about strategy. I've talked about culture. Now you owe me a favor. I want you to write me a note. It can be one sentence. It can be 10 things, 20 things. Give me exactly what you would change in this company. It can be as important as a strategic move like you should be in health care bracket and you're missing the vote. Or it can be as minor as this carpet on the floor is super depressing and it's killing my motivation. We need to get it out. And I want to see them. And they're super helpful. And sometimes I make decisions on the spot when I read this thing. God, she's so right. I mean, where did I think about this? I missed it. But it's super helpful. But you've got to get back to being new again. Yeah. That's amazing. And one thing, if you try to close your eyes and open it again in 10 years from now, how do you see the world of Logitech? And how do you see the world with all this digital technology that we are seeing just outside here? Let's start with what the world I see. So the world I see, which I'm not a visionary. I'm just telling you what is kind of obvious. Once you create a cloud, the cloud, which has computer processing and storage. And then once you have really, really, really low cost sensors because with the number of phones today, the costs are going down. When you take those three things, you basically have three ingredients that we never had before that are almost free. Why would any category not take advantage of those three highly effective, highly efficacious ingredients? So they will. Either you'll do it in your business. If you're in the milk business, you'll do it. And somehow you'll incorporate those three ingredients or a competitor will. And they'll eat your lunch because they have three highly efficacious ingredients that are not in your product. It may be a different business model. It may be, who knows? So I believe that's the world we're headed into. We're in it now, whether we realize it or not. In that world, there's going to be, there's a chance to reinvent every category and invent a whole bunch of new categories. So it's a world full of opportunities. It's like looking out into a pasture with all kinds of different vegetation. So in that world that's coming, you're either going to jump in and say, I want to be part of it, or you're going to be hanging steadfastly or slowly onto your old thing and then trying to improve it. So we're going to be, our goal is to be one of the people who jump into these new categories and help invent the future. So what that means is, what do I see us in a few years? I see us in, today we're in 27 categories. We're in, say, five or six when I started. I believe we'll be in 100. I believe we'll be the leader in most of those categories. And I also believe that we'll be multiple brands, not just Logitech. We already are. We started adding brands because you need to in some categories to be competitive. If you want to be authentic, you can't be Logitech stretching into the music business. You've got to be a music brand. So an authentic music brand with authentic music people. And we'll be inhabited and run by a mixture of a lot of entrepreneurs who ran companies on the outside and a few of us who grew up inside our company or in some other company who are learning to be entrepreneurs because they better be entrepreneurs because they're going to be a loose confederation of businesses. But that's the future of Logitech. It's going to be super exciting. It already is. Yeah, and it's very exciting when you are able to see that future, how you see it. But on the other side, what we see today is that there is a lot of very large companies that were extremely successful in the past that are now facing a dramatic challenge and they see for some of their revenues and their profit going down so sharp and so quickly. For example, we see the challenges on the retail industry. We see the challenges and they are being disrupted not by their traditional competitors but by something completely new coming out. So how do you, for example, as Logitech, you prevent and protect yourself or your business from this something like an absolutely disruptive that can just throw away everything you have on your business, for example. How do you think on that? I think we all have to live on the edge and on the edge in a whole bunch of different ways. On the edge because you know that that could happen to you. So you better be in touch with the ecosystem of people outside of your company that are trying to create new things because if you're not aware and something comes out of nowhere and it'll hit scale before you know it now because things can scale so fast. On the edge of your own business where you're constantly trying to completely transform your own business. But on the edge in one other way which is when you're trying to create new things we're a portfolio so we don't have a sink. You can't kill us by killing one category. You have to kill us in a hundred different ways to get to us in the future, today 27. So one of the things we're really trying to do is as we build new businesses we separate them from the old businesses completely. Because like gravity on earth it slows everything down. A big business will slow down a new business a new startup. So we separate them completely. Hopefully the big business will go fast too but we certainly don't want their resources sucked up I don't want them to be drawn in. One final question so what would be your key advice to two groups first to the startups that are outside starting new business so what a piece of learning that you can share with them and second one for the C-level executives of incumbent organizations that have been challenged by all means by digital transformation and they could not get through that. So what would be the advice to these two groups? Okay for the startups I guess my advice would be stay, your most important partner is your customer and it's a cliche but it just happens to be true. So live with your customer find something that they love and then deliver it big time and then keep looking for more things you can do that really they will fall in love with you for. That's the most important thing you can do and have courage because sometimes they don't know that they will love it and your intuition is they will and then have the courage to follow through and if you're wrong you're wrong then you pivot. So I'd say it's all about the experience you're delivering for your customer for the big company for the large company C-suite or executive I pity you just like I pity me because we're wrong we're in a bad spot the world is not waiting for the next bureaucracy to form it's being disrupted by all those small hungry small teams that are out there trying to deliver new growth so you better start hating the size of your company and hating your own bureaucracy and hating the old the slavish nature we take to titles and offices and you just need to hate your the bigness and start loving being small and then find a way personally to get deeply involved in something that can really make a change and don't be hands off be hands on don't think empowerment think enablement and participation you know don't do what everybody tells you to do don't be the C-suite leader be the individual player I mean because I hate titles like executive this and executive that you be somebody who's out there to make a difference one to one that's the most important thing look thank you very much it's so inspiring and thank you for sharing your knowledge and the history of large tech well thank you very much it's really great to meet you thank you it's really fun