Logitech CEO Hanneke Faber: ‘Tech is best when you actually don’t know that it’s there’

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Transcript:

Kristin Stoller: There’s too many screens, there’s too many devices. How do you solve for that?

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

Diane Brady: Hi, everyone. Welcome to LeadershipNext. The podcast about the people…

Kristin Stoller: …and trends…

Brady: …that are shaping the future of business. I’m Diane Brady.

Stoller: And I’m Kristin Stoller.

Brady: And this week, Kristin, we are speaking to the CEO of Logitech, Hanneke Faber.

Stoller: Yes, we chatted with her at our Most Powerful Women 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.

Brady: 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.

Stoller: Yeah, when I think of it, I think of back in my Skype days when I would plug my little Logitech webcam into my computer with the 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.

Brady: Well, and of course, AI has an impact. And ultimately this is design thinking 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 Hanneke Faber are thinking about that.

Stoller: Yeah, it was a fascinating conversation. Let’s listen to it now.

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

Jason Girzadas: Great to see you, Diane.

Brady: Earth observation—so what is it, and how can it help drive value for business?

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

Stoller: Jason, I’m curious—what are some promising trends? And why is right now a good time to be talking about Earth observation?

Girzadas: I think the 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.

Brady: I’m curious, are there a couple of examples of ways to use this data that you’d want to share?

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

Brady: Fascinating stuff. Thanks, Jason.

Girzadas: Thank you.

Stoller: Hanneke, 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.

Faber: Thank you. Thanks for having me.

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

Faber: Go Cougs.

Brady: Seven-time champion in the scariest sport ever.

Stoller: Yeah, Diane is terrified of diving, by the way. Tell us about that. Why did you do it? Why did you stop? What lessons did you learn?

Faber: Yeah, I started as a gymnast, but at like age 11, I was 5’9″, and this is not good for gymnasts.

Brady: You kind of become obsolete at puberty in gymnastics.

Faber: Yeah, but certainly at 5’9″. So I happened to be in a pool, and I had watched the Olympics on TV, so I flipped off of the diving board thinking I was some Russian competitor. Unfortunately, there was a dive team there, and long story short, they said, Would you like to join? So I became a competitive diver. I went to the World Championships when I was 16, and was lucky enough that the U.S. 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. That means warm. We’re like, Yay. living in Holland it rains all the time. So I ended up at the University of Houston, and I will be forever grateful for the chance to come to America and 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 was just a wonderful opportunity.

Brady: College in the Netherlands tends to be free. I always think about that from a—but before we move on from diving, it is a sport that is so much about just plunging into the unknown. 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?

Faber: Yeah, it’s a combination of kind of craziness and discipline. So you’re up on a 10 meter platform, 33 feet up in the air, so you’re taking risks. And I think that has really helped me, actually, in business, because when someone says, Oh, aren’t you scared to do a big presentation, or propose this to the board? I’m like, Have you been on the 10 story platform and put on 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 the every morning, at 6 AM you’re at the pool, doing literally 1000s 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 well.

Brady: 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 under-appreciated 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.

Faber: 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. And 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. But it’s about extending the human and what the human can do, and 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 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. But we start from design. We have 300 designers in house. I 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 upfront and design beautiful products. We make hardware, but the hardware is software enabled. It’s chock full of software and AI these days, and we employ more software engineers than hardware engineers. So 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.

Stoller: I know we want to come back to AI and gaming both, but before we do, I’m just fascinated by behavioral psychology and design psychology. So is there anything surprising about the way you design your mice or your keyboard—are there any interesting insights about how you design things based on human behavior that you could share with us?

Faber: It’s critical to just get close to the user, so I’ll give you two quick examples. 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, and we don’t just sponsor them, we co-develop our products with them. So now, of course, they want to move faster, so we just launched a new super strike mouse developed with pro gamers. 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.

Brady: So it’s like those suits that swimmers wear that make them too fast, right?

Faber: Yeah. Almost like cheating though, not quite.

Brady: Okay, so I do have to unpack this a little bit. So super strike haptics—what exactly are you doing that makes them think, Wow, this is a whole new level?

Stoller: Does it vibrate?

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

Brady: Yeah, go figure.

Stoller: Making the sourdough.

Faber: Well, or working in very non-ergonomic circumstances on their kitchen table and getting 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 Casa 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 and our product people, we always start from really understanding the user.

Brady: So you grew up in the consumer products business. Let me go back a little bit 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, Paul Polman, Werner Vogels of Amazon, I could go on. Tell us a little bit about—when you grew up, what do you think has made the Netherlands such an incredible and under-appreciated country when it comes to even exporting food? I’d love to hear a little bit about just the culture there.

Faber: We’re a small country, a very small land mass, only 17 million people. It’s a small place. We speak a small language. So you grow up with 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 place in the country. So it’s a pretty—even though 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, everyone learns at least four languages in high school. And if you go to the higher level of high school that I went to, you learn six, and this is normal.

Brady: So what are your six languages?

Faber: 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.

Stoller: 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, and I see Gen Alpha buying the flip phone that I had when I was 13. And I wonder, how do you think about that at Logitech if there’s such an overwhelming sense of there’s too many screens, there’s too many devices.

Faber: There’s definitely a segment of the consumer these days that is tech tired. And I count myself amongst those. I think tech is best when you actually don’t know that it’s there. So one good example of that in another recent launch is the Solar Keyboard. 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. But I think you’re right, so we, again, we try to design for that cohort as well.

Brady: You know, I think about the movie “Minority Report,” where you’re just pointing to your fridge. So this, almost—it’s not post hardware, because the hardware is embedded elsewhere. How does that future impact the way you think about your business?

Faber: Well as I said before, hardware really is sexy again 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—that extra brain needs inputs, needs data, needs information, to work better. We are the eyes, the ears, the hands of AI—our products, our cameras, our headphones, the mice, the keyboards. So we play a really, really key role  at this time, and what we’re finding in our work every day is that it makes our product smarter. So one of my favorite new products is called a site video conferencing camera. You set it in the middle of the table, and it’s almost like you 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, 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, 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 cancelation headsets, you name it. So a lot of opportunity in our products, and then, of course, in the company. And we talked about this at the conference—we’ve created more than 1000 AI agents internally since January, and it is making us productive.

Brady: Is there a particular agent that does something cool that’s maybe not obvious to us?

Faber: We’ve created more than 1,000 AI agents since January. Most of them actually are rather mundane. So if I look at the 1,000s, maybe two or three are really going to be home runs inside the company. 200 probably are not useful.

Brady: Mediocre employees, don’t have to pay them.

Faber: Really not useful at all. So we’ll get rid of them. Then there’s 800 that give us incremental productivity benefits in all kinds of spaces. Outward-facing customer service was a big one. Marketing is another big one. Coding, of course, you know, we’re a company of engineers, is a big one. But all of 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’re working smarter to grow faster, not to become a much smaller company in terms of number of people.

Stoller: One of the things you’ve spoken about that I find so interesting is this idea of a forever mouse, a super mouse, that you’re gonna have that’s durable, and there could be a subscription service. Can you tell us more about that? And what do you mean when you say a forever mouse?

Faber: Yeah, the forever mouse, that idea was not very well received by the Reddit community. And I didn’t really mean a forever mouse. What I mean is, durability is critical. Because that means quality, right? 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, especially Gen Z consumers, really want. So we’ve been investing in replaceable parts 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.

Brady: And yet you want to build sales. So there’s the upgrade, the subscription.

Stoller: It was popular with me because I hate having to get new things. I hate when tech breaks.

Brady: So you grew up in consumer products. Let’s go back to that. What do you learn from shampoo, etc, P&G, Unilever, that applies to this business? Because I think 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?

Faber: 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.

Brady: A basic human need, I might add.

Faber: Absolutely, and I loved that too. But what I learned there—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 that the consumer is boss, and that has always stuck with me. You have to listen to your user, your consumer.

Brady: Design thinking, too, is what he’s known for.

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

Stoller: 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 innovating. 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.

Faber: So I think at Logitech, when I joined, we were just coming off of a massive sugar high from COVID, right? When everyone was at home, the work side of our business was really on a sugar high, and everyone was gaming. So we had 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 the company had said we’re going to go for a multi-brand strategy. Which is great for some companies, but the Logitech brand itself is a great brand. And I think as a leadership team, we came to the conclusion that that was actually not a good strategy, because it was scattering our resources all around. And the Logitech brand is a fabulous brand with very broad shoulders. It’s known around the world. If I get in a taxi in Shanghai, 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, we’re a market leader of video conferencing. So I think one of the mistakes that we made was 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.

Brady: I think about gamers and a stereotype comes to mind. I’ll say positive, because I’ve got children who are gamers. But what have you discovered—are 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 made you think, Huh, that’s interesting.

Faber: 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—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. You know, China is the world’s number one gaming market, actually. So it is very, very large. I think, within that, one under-appreciated part, another one that I wasn’t really that aware of, is actually simulation, and especially racing, 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. 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 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. 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 it’s a big growth area for us.

Stoller: Where do you see the biggest growth opportunities in the future? Any new products you can see, any exciting things coming up?

Faber: 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 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. So actually, we just launched an environmental sensor for the office so that workplace services can know, is there room? First of all, are there people in there? Should we have that room? But second, what’s the temperature? What’s the CO2 in that room? Is it a healthy atmosphere? It’s called the Spot. It just won Time Invention of the Year, actually.

Stoller: Wow, congrats.

Faber: So that’s cool. So that’s kind of for the work site. Then there is gaming, which, of course, is a big macro trend, and again, as the number one global gear provider, that is big for us, and is a big growth space. And then there’s our bread and butter, we call it 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 and not just at home and in the office. I’m sure you guys are prime examples of this—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, we call it B2B, personal workspace, and gaming. And all of those have great growth opportunities. So this is an exciting place to be.

Brady: I can’t think of many industries, whether it’s tech, gaming, et cetera, 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. 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.

Faber: So I think it’s a combination. I call it maybe a leadership philosophy, but doing well by doing good. So doing well is what we talked about earlier. I want to win, 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? It’s all about values. And one of the reasons I joined Logitech is because their values are super strong. Their number one value 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. 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. And diverse in terms of nationality, ethnicity, gender, and many other things.

Brady: Does it matter being Swiss-based?

Faber: Good time to be Swiss.

Brady: What does that mean? Neutral?

Faber: We joke about being Swiss, 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 neutrality. We work with everyone 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 we’re neutral in that respect. But the Swiss are also 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 Silicon Valley, you get a pretty potent mix, and that’s really what this company is all about. So that’s an exciting thing.

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

Faber: Wonderful, thank you for having me.

Brady: Thank You.

Brady:LeadershipNext is produced and edited by Hélène Estèves.

Stoller: Our executive producer is Lydia Randall.

Brady: Our head of video is Adam Banicki.

Stoller: Our theme is by Jason Snell.

Leadership Next episodes are produced by Fortune‘s editorial team. The views and opinions expressed by podcasters and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.