There are but two Danish brands that, no matter where you live, you are probably aware of: Lego, and Bang & Olufsen.
Lego makes plastic blocks that kids snap together, with sets starting around $20. You probably have some at home. Bang & Olufsen makes design-focused, top-of-the-line home and automative sound and acoustic equipment, $800 cordless phones that look like futuristic candy-colored aluminum bone sculptures, and $85,000 3-D TVs. You probably don't have one at home.
Tue Mantoni, the new CEO of the 86-year-old Bang & Olufsen, is out to change that. In August, Mantoni announced that the company had recently returned to profitability after some tough years during since the 2008 market downturn. He also announced a new revenue-growth strategy for the company that will both streamline its products and focus on new customer segments.
"If you roll back over the last 86 years and look at what we've done with the automotive business and the feedback we're getting from partners like Apple and so on, it's clear that sound and acoustics is where we can really make a difference and be world class," Mantoni says. "Yes, we're good at all the other stuff, but sound and acoustics is going to be a bigger focus for us in the future."
Meanwhile, the company is just beginning to roll out a new line of "plug and play" type products to appeal to a new swath of consumers--the types who might want the best in the business for audio equipment, but may not be prepared to hire Bang & Olufsen to link up their sound system with their heating, air, window shades, and swimming-pool cover using a remote control. The idea is that the new products--while still very high end--might appeal to consumers who (gasp!) don't even have a private swimming pool.
One of the first products it's launched, the BeoSound 8, is a dock for iPods, iPhones, or iPads that the company is selling not only through its own retail locations, but also through the Apple store. It goes for $999--which is a hell of a lot more expensive than most iPod docks, but also nowhere near an $85,000 TV. The company is rolling out this new consumer-focused soft brand starting in November. In early October it launched a new global marketing campaign called "What Moves You," featuring short films by notable personalities telling stories about their emotional connection to sound, experience, and Bang & Olufsen products.
"This new brand is going to hopefully attract young professionals, people who may not be in a big house yet," says Mantoni. "In addition to selling through our 1,000 shops, we also will sell the new products through Apple stores and other premium retail channels like department stores. This is a way for us to reach some new people who don't have Bang & Olufsen on the shopping list, to reach people who think Bang & Olufsen is too expensive or not for me, and to give them something fun and very high quality and design focused. Hopefully over time they fall in love with the brand and the products."
The big idea: Despite its far-reaching name recognition, Bang & Olufsen remains a very small company, with around 2,000 employees and about US$555 million in revenue in fiscal 2010/2011. "My conclusion is that its potential is gigantic if we get it right, if we roll up our sleeves and do things in a different way," says Mantoni.
Background: Before coming on as CEO in March, Mantoni worked for the past eight years at Triumph Motorcycles, most recently as CEO. Before Triumph, he was a consultant for McKinsey & Co. in Copenhagen and London. In 2002, Triumph Motorcycles contacted McKinsey. The 100-year-old company had been losing money for 10 years; the technology was behind the competition, the stores were not up to date, and then their factory had burned down. The insurance company was going to cover commercial losses and lost profits for next three years, and they said that Triumph needed to bring in someone who could get it back on track quickly. So they paid McKinsey's fee to come in and help guide the owner. "I was working for McKinsey, and the owner of Triumph Motorcycles at some point said, 'It's time for you to get a real job,' so I joined Triumph and ran the turnaround for the first three to four years and became CEO. We ended up tripling the size of the business, and it's now a fantastic, profitable business that competes with BMW and the Japanese in terms of quality and performance."
First job: Mantoni's first job was as a paper boy delivering Sunday morning papers. "I worked faster than the other guys. I would get up, starting at midnight with five routes," Mantoni said. "Then what I would do is after five, I would go to the main depot because if you did more, you got 50% more per route. It was just hard work."
What's in a name? "Tue" (pronounced too-eh) in Danish is just a short, simple name. "But I traveled to Japan, and they said, "Oh! Tue-san! That means 'early morning.'"
Leadership philosophy: Mantoni says hiring people you deeply trust is the first priority in building a company. "We all make mistakes, but if people who you trust make mistakes, you know they're doing it simply because they got it wrong, not because they're bad people or have the wrong intentions," he says. "Once you do that, you can give people a lot of room and freedom in their jobs. Then I will say, obviously, show interest, be open, be approachable, be accessible."
Age is a number: In the beginning of his career, Mantoni (who is now 36) sometimes heard people express surprise at his young age. "But once you get to know people, the way you look, how old you are, your background, what you wear become less important," Mantoni says. "I use my age to my advantage. I think if you're humble and demonstrate that, you can go in and you can say 'I'm young. You've got experience. I don't know anything. Tell me what you know.' When you're young, honestly you really know very little. You may be smart, you may be able to process knowledge and challenge people, but you have very little experience. There's not this risk of saying, 'Oh, I know everything.'"
On hiring: Now that he's been CEO of two companies, Mantoni says he is starting to rely more on his own experiences when it comes to calling the shots. But, because he was very young when his leadership roles began, he still focuses on getting the most out of his teams. "My philosophy has always been to hire people who are better at you at doing what you want to do," he says. "If all my direct reports are 10 times better than me at doing what I need them to do, we'll have a great company."
Design: Both of Mantoni's parents were doctors in government-run hospitals; while they were solidly middle class, they were not a family that could afford Bang & Olufsen products, he says. "I never missed anything when I was a child, but I was never spoiled and I'm glad I wasn't," he says. "Many of my friend's parents had Bang & Olufsen; it's a very big thing in Denmark. Denmark is very big in furniture design and architecture, so I always liked design. I just like cool stuff. I like spending a bit more money on things that in addition to doing great things for you also look great. That's why I love working for Bang & Olufsen."
Alternative reality: If he weren't running Bang & Olufsen, Mantoni, who is a committed long-distance runner, said he'd love a career in sports. He ran the New York City marathon in 2:55, and has completed many others, including Boston and the Jersey Shore marathon. He's now graduated to ultramarathons. "Now I'm doing 100-mile runs in the mountains, in the Alps," he said. "Obviously when you run 100 miles in the Alps, which has a positive elevation gain of about 30,000 feet up and down, it's not so much a physical challenge as it is a mental one, because it takes about 32 hours--you don't sleep, you just run. In the beginning, you start to think about all the issues in life--family, work. Then, you focus on the running. And then after a few hours, you think of nothing. It's like meditating, and the most difficult thing about meditating is to to think of nothing. But that in itself is a great way to challenge yourself, to focus. And it also means that when I work I can work quite long hours without sleep and be focused."
Inspiration: Mantoni admires former IBM CEO Lou Gerstner, who wrote the book Who Says Elephants Can't Dance, which he's read three times and whose tenets he has used at his own companies. "It's about when he came to IBM, which was so conservative, so slow, and how he created a more agile business," said Mantoni. "I've used a lot of those analogies both at Triumph and at Bang & Olufsen. Both are brands that had been successful in the past and I think the potential is a lot bigger than what we have unlocked. Only by becoming more flexible and open to what's happening in the market, by becoming more agile, can we do that."
What customers want: Mantoni says he thinks it's fun to personally meet with customers to suss out what they think about the company's brands. But at the end of the day, he says, his job is to process all that information and decide what's right for business. "I don't think you should ever just say, 'This is what the customers want, let's give it to them.' Because then you're not going to impress or surprise them; it'll be what they expected. Our job is to exceed expectations and surprise them. Some companies don't believe in market research because the risk is you give people exactly what they want. It's important to balance, though--you cannot be arrogant."
Death by committee: "If I can create an environment where it's okay to come up with ideas that might not fly or where it's okay to make mistakes, and I demonstrate that that's okay, then we will get a more creative organization, more innovation, and an organization that moves faster. The last thing you want is to have an organization where everyone is so afraid of making a mistake that there's no new ideas coming out, or where every time I see an idea it's so well worked through, it's been through so many committees, that it's a boring idea, it's just middle of the road. A lot of businesses are like that."
Hierarchy: Mantoni says he's very happy to phone up someone in the company who is several levels below him in the organizational structure if they have great ideas and he wants to see what they think. "People are like, 'Wow, the CEO is calling me.' I just think, 'Of course I'm calling you--you had a great idea!' It really motivates people. Doing that also gives people a signal that they can go the other way, and do it with a direct boss, or that even if you're a junior person you can say what you want."
Perspective: "When you are a small business, you can always sit down and feel sorry for yourself because you're not big, you don't have a big R&D budgets, the big HR systems, the IT infrastructure. But I think what you should really do is sit down and say, how can we exploit the fact that we're small? And how can we actually make it a fun place to work? Because when you work at a small company, quite often you can drive home on a Friday and look back on the week and say 'Wow, I changed things, I had an impact.'"