Fortune: Mouse- and keyboard-maker Logitech was dying a slow death. A design-focused CEO helped it thrive
Co-authored with Alex Salkever and Ismail Amla
Logitech’s CEO, Bracken Darrell, keeps a copy of the legendary designer Dieter Rams’s "Ten Principles for Good Design” on the wall of the conference room next to his open office desk. The German industrial designer is a guru to many of the leading product designers of our time, including Jony Ives of Apple. Darrell, too, believes passionately in the power of design. This belief is what has underlain his execution of a stunning turnaround of his struggling company since he became CEO in 2013.
The Logitech that Darrell arrived at in 2012, when he joined as president, was known mostly for cheap computer mice in neutral colors and clunky, forgettable keyboards. The Swiss company created products to fit price points and often launched products without significant market testing. At best, the products were uninspired; at worst, they were ugly.
Inspired by Apple as well as by his own experience as president of Procter & Gamble’s Braun division, Darrell resolved to reinvent Logitech “as a design company.” This seemed a tall order for a maker of mice and keyboards, and he knew that he would need a design leader as his partner and to build a culture of design excellence before he could pair Logitech’s impeccable product engineering and manufacturing with eye-popping design. That combination, Darrell believed, would turn the company around and make it a lot more exciting to customers, investors, and its own employees.
The alternative was a dark future. Logitech sales had stagnated before Darrell joined. The market for plain PC peripherals was not growing: Smartphone and laptop users had no need for them.
Design principles and purpose
To effect the transformation, Darrell assigned resources to match his vision. He took two-thirds of the company’s $200 million annual R&D budget away from mice and keyboards and used it to place bets on faster-growing sectors. He recruited a very respected designer who had led design at Nokia: Alastair Curtis. The team, now boasting more than 100 designers, has subsequently attracted talent from Nike, IDEO, and other leading companies.
To give this transformation a heart and soul, Darrell and Curtis created design principles that echoed those of Dieter Rams. Logitech’s principles are simple and elegant:
Powerful Idea: clarity of purpose and the benefit to the consumer
Soul: unique personality of the product/experience
Effortless: relentless pursuit of creating friction-free experiences
Crafted: simplifying, perfecting, and stripping down to the essential
Magical: interactions that are alive and expressive
The idea is not to build products merely to fill a niche, but to build products to fill a need, and to do so in a way that creates emotional resonance and crafts a comfortable, seamless user experience. Having a major unifying idea behind every new product was a powerful way to force designers, marketers, and everyone else working for Logitech to check whether the feature they were designing or the marketing campaign they were planning fitted the unifying idea of the product.
For example, Logitech’s Circle Home security streaming-camera system provides a visual principle—the device is circle-shaped—and a language concerning the circle encompassing our homes, our loved ones, and the places we care about and want to watch. Logitech’s Spotlight Presentation Pointer is designed to help audiences focus on the speaker. Even in products deriving from Logitech’s past, the design teams are striving to add one or two seminal features that improve the lives of their users. On keyboards, for instance, Logitech began adding dials so that people could scroll through menus with their keyboard rather than with an inexact mouse.
Innovation is considered the domain of mathematicians and scientists, and engineering often receives all the focus. But the most important lesson that Steve Jobs taught the tech industry concerned the importance of form. As Jobs told Fortune in an interview in 2000, “Design is the fundamental soul of a man-made creation that ends up expressing itself in successive outer layers of the product or service.” This is what Darrell also demonstrated: Engineering is assuredly important, but what makes a technology product most successful is its design.
An important myth that Darrell helps shatter concerns the backgrounds of people who can make exponential innovations happen: They don’t need to be geeks and nerds. This too is something on which Steve Jobs held a very strong opinion. “It’s in Apple’s DNA that technology alone is not enough—that it’s technology married with liberal arts, married with the humanities, that yields us the result that makes our heart sing. And nowhere is that more true than in these post-PC devices,” said Jobs at the unveiling of the iPad 2 in March 2011. Darrell himself majored in English at a small liberal arts college in Arkansas before completing an MBA at Harvard.
There are other great liberal arts examples: YouTube’s chief executive, Susan Wojcicki, majored in history and literature; Slack’s founder, Stewart Butterfield, in English; Airbnb’s founder, Brian Chesky, in the fine arts; and, in China, Alibaba’s chief executive, Jack Ma, in English. In the new era of converging exponentially advancing technologies, creating the most disruptive solutions often requires a knowledge of fields such as biology, education, health sciences, and human behavior. Tackling today’s greatest social and technological challenges requires the ability to think critically about their human context—something in which humanities graduates happen to be well trained.
Diversifying and simplifying
As Darrell was beginning to reinvent Logitech, digital-native brands such as Dollar Shave Club were the cool kids on the block. They had figured out how to sell directly to customers, bypassing the traditional song and dance of securing distribution and shelf space at a major physical storefront. They played the Amazon merchandising game as if they were born to it, running circles around legacy brands. These digital natives often created market buzz that resonated initially with Millennials and Generation Xers, often expanding then into other demographic age groups. They also tended to refresh products more often and vary their approaches to marketing.
Under Darrell, Logitech accelerated a multi-brand strategy, better utilizing existing assets and, in a few instances, acquiring new ones. Logitech’s UE (Ultimate Ears) brand broke out as a popular Bluetooth speaker brand, winning numerous prestigious awards from audio reviews and tech publications. The company made another key acquisition in 2016 with the purchase of Jaybird, a fast-growing wireless-earbuds company founded by Australian entrepreneur Judd Armstrong. Jaybird had carved out a premium wireless-audio brand with a strong following among athletes and adventure-sports pros. Logitech then went on to acquire two rapidly expanding complementary brands, Blue (microphones) and ASTRO Gaming (gaming headsets).
Darrell’s years at large companies had taught him the good and bad of them. On the positive side, they remained disciplined on cost and invested in sales and marketing. On the negative, they could be stiflingly bureaucratic and slow and could kill off entrepreneurship and innovation as business grew. At Logitech, Darrell kept teams small and independent, to maintain the feeling of a small company, and he flattened the organization, having more than twenty senior managers report to him directly.
Meanwhile, Logitech’s senior managers were clearly signaling that they welcomed speculative ventures that could be moonshots returning 1000% on investments.
Recognizing "people people"
One other practice of Darrell’s that stands the company in good stead is staying in touch with his employees. Review after review on Glassdoor remarks on how he spends time with employees and listens to their points of view.
None of this should be taken as minimizing the company’s struggles in making this transformation. There have been failed products. Reallocating the R&D money resulted in some anger and fear. Middle-level managers struggled to acclimate to the new environment. But the numbers bear Darrell out. Profits have increased by an order of magnitude; the company now derives less than a third of its revenues from the sales of keyboards and mice, and it is now a perennial winner of prestigious design awards. Investors have likewise benefited. Share prices have risen more than tenfold since their nadir, when Darrell joined.
After five years as CEO, Darrell decided to undertake an exercise of firing himself and assessing whether he would hire himself back. It sounds like a gimmick, but Darrell was seriously considering whether he was the right guy for the job. He decided he was an acceptable candidate after all.