Strik­ing a chord in new head­phone mar­ket

China will soon be the big­gest cus­tomer of ma­jor au­dio sys­tem pro­ducer, says its chief

China Daily (Hong Kong) - - Q&A WITH CEO - By ZHONG NAN zhong­nan@chi­

Daniel Sennheiser, chief ex­ec­u­tive of­fi­cer of Sennheiser Elec­tronic GmbH & Co KG, one of the world’s big­gest au­dio sys­tem pro­duc­ers by sales rev­enue, can­not stop think­ing about how many lower-tier Chi­nese cities his prod­ucts have yet to reach, ev­ery time he vis­its the coun­try.

The Ger­man group has made plans to de­ploy more re­sources and man­power in the mar­kets of China’s pro­vin­cial cap­i­tals and low­ertier cities. It wants to speed up pro­mo­tions of its prod­ucts next year, in­clud­ing head­phones, as well as meet­ing and con­fer­ence sound equip­ment.

“We all know about the frus­trat­ing qual­ity of tele­phone con­fer­ence calls and we have a lot of so­lu­tions,” said Sennheiser, who trav­eled to China four times this year.

The CEO said that a typ­i­cal Sennheiser user is usu­ally one that knows a lot about au­dio equip­ment or is an au­dio pro­fes­sional. “In the pro­fes­sional au­dio world we have 100 per­cent brand aware­ness,” he said.

He said for mu­sic stars such as Adele, Pink Fl­loyd, David Bowie and Rob­bie Wil­liams, when they are singing on stage, a Sennheiser mi­cro­phone is of­ten the only thing between them and the au­di­ence.

China will be his com­pany’s big­gest mar­ket very soon and there is a huge op­por­tu­nity to im­prove the qual­ity of its com­mu­ni­ca­tions and busi­ness, he said.

Ger­many used to be the com­pany’s largest mar­ket, be­cause that is where it is from, while later the United States be­came big­ger and still later on the com­pany found that its big­gest growth rates are in China.

Re­cently, the Ger­man came to China to un­veil Sennheiser’s very first im­mer­sive Sound Stu­dio at The Penin­sula Ho­tel in Bei­jing, and spoke with China Daily about the com­pany’s strat­egy and his man­age­ment style.

The fol­low­ing are edited ex­cerpts from the in­ter­view:

How do you pro­mote your busi­ness in China?

The best way of do­ing that is be­ing very close to our cus­tomers, and Sennheiser has al­ways op­er­ated that way. We need to un­der­stand what our cus­tomers’ prob­lems are and what their prod­uct needs are.

When it be­comes more com­pli­cated, we bring in our en­gi­neers with all their knowl­edge, but we also use lo­cal part­ners and im­ple­men­ta­tion part­ners, in or­der to ar­rive at a so­lu­tion that is valid there.

Sennheiser needs to work with what we call lo­cal in­te­gra­tors to bring a com­plete pack­age to com­pa­nies which don’t want to choose just a mi­cro­phone, but want to choose a full so­lu­tion for their con­fer­ence room.

What is your big­gest achieve­ment as Sennheiser’s CEO?

It’s not so long since I be­came the CEO, so maybe it’s very pre­ma­ture to talk about my achieve­ment. Usu­ally you talk about ‘achieve­ment’ at the end of your life. My brother and I — al­ready not very typ­i­cal — are two brothers run­ning Sennheiser to­gether, both with the ti­tle of CEO. And what we pro­vide is what the com­pany needs: re­newal.

And we re­ally need to stay with very mod­ern man­age­ment meth­ods at the top. We are also cre­at­ing an or­ga­ni­za­tion where ev­ery­body needs to take re­spon­si­bil­ity. We’ve cre­ated an or­ga­ni­za­tion where ev­ery­body is em­pow­ered to do what is right for the com­pany, which I think is the mod­ern way of run­ning a busi­ness.

What is the ad­van­tage of be­ing a Ger­man fam­i­ly­owned com­pany?

You are in­de­pen­dent. You make your de­ci­sions based only on what you think is right for the cus­tomer. So we fo­cus 100 per­cent of our time on science, on tech­nol­ogy and on the cus­tomer. If we were not in­de­pen­dent, we would need to dis­cuss things. I would spend a lot of time with an­a­lysts, with banks, in­vestors, with a lot of peo­ple -- and in the end it doesn’t help the prod­uct. Now I can spend a lot of time with my end con­sum- ers, in prod­uct de­vel­op­ment, and in think­ing about strat­egy, which I think is bet­ter for the com­pany.

How do you en­cour­age your em­ploy­ees?

I think one thing that re­mains glob­ally valid is strong vi­sion and good prod­ucts. It’s as sim­ple as that. If you have a strong vi­sion and ev­ery­body knows where you want to go, you have good prod­ucts that peo­ple are proud of.

Once our peo­ple are proud of our prod­ucts, you don’t need to mo­ti­vate them. Be­cause I don’t think I can mo­ti­vate any­body. They need to be mo­ti­vated by them­selves.

What I can do is make sure that the vi­sion is clear, the strat­egy is clear and that they have the au­ton­omy or the em­pow­er­ment to make their own de­ci­sions.

How do you man­age your in­no­va­tion ac­tiv­i­ties?

A to­tal of 7 per­cent of our turnover is al­ways go­ing into re­search, so we do ba­sic re­search based on sev­eral vec­tors that we de­fine, like trans­duc­ers and mi­cro­phone tech­nol­ogy, and so on. Once th­ese are al­ready at a cer­tain level, it’s like hav­ing a prod­uct in­no­va­tion cy­cle that’s it­er­a­tive, with us tak­ing things step by step.

What is your plan to de­velop smart au­dio prod­ucts?

We do have quite a lot of wire­less prod­ucts in our range al­ready and we are in­te­grat­ing them with apps. When you’re able to con­trol the head­phones with your app, it al­lows for adap­tive noise can­cel­ing where you can re­ally al­ter lev­els to what you need. So you’re in very in­tu­itive way of in­ter­act­ing with the prod­uct.

We are work­ing on so­lu­tions to be­come smarter about sit­u­a­tional aware­ness, while en­joy­ing your mu­sic.

How do you see the po­ten­tial pur­chas­ing power of China’s ris­ing mid­dle class in your long-term strat­egy?

The coun­try has very pro­fes­sional broad­cast or­ga­ni­za­tions here, in­clud­ing Bei­jing Satel­lite TV and China Cen­tral Tele­vi­sion, which are very in­no­va­tive. We are work­ing very closely with them. A lot of times we come up with new prod­ucts and they try them out, as I said ear­lier. We are provid- ing tools and they are find­ing new ap­pli­ca­tions. There­fore, that for us was an en­try to the Chi­nese mar­ket.

As China opened more to Western brands, we were al­ready there and able to show our head­phones, so we had a very strong mar­ket share in China for the small com­pany that we are.

When Chi­nese con­sumers spend their money, es­pe­cially the ris­ing mid­dle class, they want to know that it’s well in­vested. So this is ex­actly why they turn to Sennheiser, be­cause you are re­ally get­ting value from their money.

Sennheiser seems to be less known com­pared with Bose and Beats. What is your busi­ness strat­egy in mar­ket­ing and brand­ing?

We are a suc­cess­ful com­pany and we are grow­ing, so I’m not so wor­ried about mar­ket share, be­cause mar­ket share comes and goes and there are so many play­ers, es­pe­cially with head­phones, right now.

We don’t fo­cus so much on com­peti­tors. We ac­tu­ally fo­cus on cus­tomers, be­cause cus­tomers are get­ting bet­ter and bet­ter ed­u­cated. There is al­ways a part of the mar­ket which is re­ally in­ter­ested in what Sennheiser is of­fer­ing, and we fo­cus on that part of the mar­ket.

How do you spend your off­duty time?

I love to travel and spend time with my fam­ily. We have a house in France where we drink wine and en­joy life. It’s rather im­por­tant to calm down. When I sit at my pi­ano, I im­me­di­ately un­der­stand that I’m just a very small be­ing within the big uni­verse.

Where are your fa­vorite travel des­ti­na­tions ?

I love Asia and spend quite a lot of time in Asia. I love dif­fer­ent cul­tures and have been trav­el­ing to Viet­nam, Cam­bo­dia, China, Myan­mar, Laos, Ja­pan and South Korea. To a Euro­pean ini­tially they look sim­i­lar, but ac­tu­ally they are very dif­fer­ent. I love to get a deeper un­der­stand­ing of dif­fer­ent cul­tures.

Art Cen­ter Col­lege of De­sign in La-Tour-de-Peilz, Switzer­land

Pasadena in Cal­i­for­nia, the US

Fam­ily: Mar­ried with two chil­dren


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