• Dr. Günter Kast

The ear on the pulse of time.

(Reading time: 7 - 14 minutes)

014 SennheiserHN 09. November 2017 RD48 Sennheiser

Innovation. 3-D audio formats will revolutionize the world of hearing. This is a great opportunity for the family company Sennheiser, which specialises in the manufacture of microphones, headphones and conference solutions. And a challenge. "Andreas (left) and Daniel Sennheiser, "We have to maintain our innovation leadership." The two representatives of the third generation have long since set the course for this.

When the first sounds of "Comfortably Numb" sound, many visitors to the exhibition "Pink Floyd: Their Mortal Remains" at London's Victoria and Albert Museum look around in astonishment. They have the feeling of standing in the middle of the crowd and experiencing the concert live. "The deep sound experience of our technology gives you goose bumps. 3-D audio will fundamentally change the way we perceive music," Daniel and Andreas Sennheiser are convinced;

3-D-Audio is the strategic lighthouse project of the family business. The next big thing, bundled under the brand name AMBEO. After mono and stereo, this is the logical development in audio technology, as it includes the entire room (AMBience). The listeners should get the feeling of literally being immersed in the sound. "For us, AMBEO is a framework in which we develop various products - both hardware and software - and workflows. In the end, the aim is to enable audio experiences that are so real that the difference between reality and reproduction can no longer be determined," explain the two Sennheiser brothers.

This also opens up completely new possibilities for composers, producers and musicians. Simon Franglen, known for his work on the films "Titanic" and "Avatar", explains on the Sennheiser website: "Whenever I mix in 3-D, I notice how much clearer I can hear what's happening inside a track. The additional playback level gives the individual voices and instruments room to breathe in a way that the flat level of a stereo mix doesn't even come close to."

This development away from two-dimensional to three-dimensional audio content opens up many new possibilities for the family business. "With this technology, our core products - headphones and microphone - merge into a single unit." In the future, for example, it will be possible to produce 3D sound for videos that are uploaded to YouTube. "With an AMBEO Smart Headset, amateur clips can be produced in a quality that professionals used to stand for days in the studio."

Music venues and bands are also increasingly putting their gigs and concerts online live or as video-on-demand. Sennheiser and its subsidiary Neumann.Berlin rely on so-called binaural recordings in order to offer their listeners something very special in this area. This allows you to experience concerts in 3-D via normal headphones.

The company has entered into its first cooperation with the renowned Swiss jazz club Moods. "This future, driven in particular by developments in virtual reality and augmented reality, has only just begun."

This is not the first major transformation that the Sennheiser family business has undergone. Immediately after the war, on 1 June 1945, Professor Fritz Sennheiser took his very manageable savings into his hands and founded his "Labor W" in an offshoot of the University of Hanover, named after his hometown Wennebostel in today's community of Wedemark. Not far from the capital of Lower Saxony, he manufactures voltage measuring instruments in a historic farmhouse: tube voltmeters from the material supplies left behind by the occupying troops. The young company's first major customer is Siemens Hannover.

But this is not enough for the native Berliner. The tinkerer enters deep into the world of electroacoustics, first presenting microphones, then headphones, in 1968 even the world's first open headphones, the legendary HD 414. A completely new market emerges. The HD 414 is a real boom and is still one of the best-selling headphones of all time. The company, renamed "Sennheiser electronic", expands strongly. The boss deliberately allows his engineers a high degree of freedom in the development of new equipment: "You have to be able to spin," is Fritz Sennheiser's credo.

The first generation change is scheduled for May 1982. Professor Jörg Sennheiser, son of Fritz Sennheiser, becomes managing director, his father, who finds it difficult to say goodbye, becomes limited partner. In the course of internationalization, the new CEO transforms Sennheiser into a GmbH & Co. KG and founds his own sales subsidiaries through which the electronics group is represented around the globe. Additional works are created in Tullamore (Ireland) and Albuquerque (USA). Microphones with pioneering technology are developed. The MKH 816 tube directional microphone was even awarded the 1987 Oscar for technology, making it world-famous. Another milestone is the Orpheus, introduced in 1991: the best and most expensive headphones in the world, costing 20000 Marks.

Jörg Sennheiser retired from operational management in 1996 for personal reasons, moved to the Supervisory Board and moved to the Swiss Confederation with his wife, who was born in Switzerland. The company is initially managed by non-family managing directors. Jörg Sennheiser had always left his sons Daniel and Andreas free to decide whether they wanted to join the company. Andreas Sennheiser went to tool manufacturer Hilti after completing his doctorate at ETH Zurich. His brother Daniel first studied industrial design, worked in marketing at Procter&Gamble and in his own company. Matured and with professional experience, the sons join the Wedemärker company as the third generation in 2008 and 2010.

In just 72 years, the former craftsman's business has thus become a world market leader with a turnover of almost 700 million euros. "In recent decades, we as an entrepreneurial family have focused above all on one topic: innovation - and on how this term can be filled with life. Of course, striving for the perfect sound is our guiding principle", explains Daniel Sennheiser, "to a certain extent the DNA of the corporate culture. But: Ideas cannot be prescribed. We'll have to till the field."

A first important prerequisite is long-term thinking. Sennheiser is not listed on the stock exchange. There are therefore no investors focused on quarterly reports who become nervous when product development takes longer. After Sennheiser introduced the Orpheus in 1991, the best headphones in the world at the time, engineers began to push the limits of what was possible a little further. It wasn't until 2015 that the time had come: Lower Saxony again presented a headphone of superlatives, the HE 1, which costs 50000 euros. And again the experts agreed - the HE 1 delivers the best sound of the planet.

014 Sennheiser HE 1 6 detail HiRes RGBv2

"Our employees are of course a second prerequisite," Andreas Sennheiser continues. But how can they be lured to the province of Lower Saxony? He has to smile: "For audio engineers, it's not Munich or Hamburg but Wedemark-Wennebostel who is the hub of the world. Many university graduates mature in our company over the years to become the specialists we need. It takes them time to understand the company, to internalize their culture. This also applies to production, not only to the development department."

Thirdly, to ensure that the right people can be innovative and creative, they need the right environment. This is why Sennheiser opened the Innovation Campus in 2015, where interdisciplinary teams of ten to 30 engineers, designers, mechanics and marketing experts work together on projects.

"This is a home for ideas and projects, a catalyst for corporate culture," explains Daniel Sennheiser. "There is a start-up culture here, but without the typical start-up chaos, because many decades of experience are added." HE 1 was finalized here: "But of course it was already in the pipeline when the campus didn't even exist yet". Once the work is done, the project is completed, the experts are distributed among the departments again and a new project moves into the campus.

Here - and this is point four - the brothers are expressly encouraged to experiment. Fritz Sennheiser had already given his engineers this high degree of freedom when developing new devices: "You have to be able to spin. "All that already exists is cold coffee", explains Andreas Sennheiser, "the campus teams should test, improve and optimize, never be satisfied with what they have achieved. We have a number of resources available for this purpose which are not assessed solely on the basis of business management aspects."

When a concrete project is started, the initial aim is often to sound out the technical possibilities. If a project is thrown into a dead-end street, it is deliberately left lying around, only to be picked up again later. Andreas Sennheiser remembers an early prototype of the HE 1: "It didn't look pretty. But the engineers were thrilled with the sound. So it was clear: This must become a product." Sennheiser invests 54.5 million euros, or around 5.6 percent of sales, in research and development. "We don't want to follow trends, we want to create them ourselves."

The two brothers, together with their management team - there are three COOs for the individual areas and a CFO - have to channel and prioritize the many ideas that the campus gives birth to. "We never have to ask ourselves what we're going to do next," says Daniel Sennheiser: What's the most important thing?"

How can you tell? "It's a question of vigilance," his brother explains with almost poetic words, "we must recognize in time the free signals that buzz about as inarticulate needs."

A further management task is to manage the balancing act between high-end and mass business at Sennheiser. "We distinguish between 'bread and butter business' and free skating," says Daniel Senheiser. The Free Dance - a product like the 50000 Euro HE 1 - may devour high development costs, but "it is a milestone in our history of innovation that causes a sensation, strengthens the brand and catapults us into the consciousness of many people".

The HE 1 is exhibited at selected specialist dealers and can be tested there by appointment. Customers who show a serious interest contact Sennheiser and are then contacted by a concierge. He draws up the contract, takes care of the financial aspects, brings the product by himself and explains it to the owner. Names > of buyers Daniel and Andreas Sennheiser do not want to betray of course. Just this much: they are by no means just Russian billionaires. Enthusiasts also often bought the HE 1: "You can be put on the waiting list - and then save years on it," says Daniel Sennheiser. A prominent British musician even postponed the premiere of his new album after listening to it on HE 1 - several dissonances suddenly came to his ears that he had never heard before.

014 Sennheiser SE BerlinStore 0282

However, being successful in the compulsory mass market for headphones is becoming increasingly difficult. Because he's changing a lot right now. Design and haptics are becoming more and more important. Young customers in particular have come into vogue to wear thick and colorful headphones. And they're not supposed to cost a fortune, of course.

Does Sennheiser want to leave this market completely to the candy-coloured Beats by Dre with their powerful basses?

"Yes and no," the entrepreneurs say. "We discussed this intensively, developed prototypes that went in a similar direction. But that just didn't suit us. We were afraid that this would annoy loyal customers from the professional sector. With our Momentum line we have then found our own way. They are available in different colours to suit our target group. The buyers aren't teenagers, they're the 30 plus generation." It is more important to understand customer needs than to follow colour trends. We're not jumping on a moving train, we're building a new one ourselves."

Is it really possible to get customers enthusiastic about another headphone after they've gotten to know the HE 1? "Of course," insists Daniel Sennheiser. "That's not headphones, just in case. It's heavy, you can't take it with you on your travels. The device must fit the occasion. You didn't go to the supermarket with a McLaren to go shopping." Nevertheless, the brand promise of 'perfection' must never be called into question. Because this radiates to all other products.

Growth drivers are currently, for example, offers for so-called business communication, i.e. for high-quality audio solutions in the offices of companies. This ranges from small mobile loudspeakers that can be connected to any smartphone and thus enable an ad hoc meeting at any time, to a product such as TeamConnect Ceiling, a professional conference system that is installed directly in the ceiling of a meeting room. The program also includes headsets. "These business areas are currently booming, particularly in the USA and Europe. In China and other Asian countries, development is still in its infancy."

The way in which the family-owned company is pursuing its path into these new business fields is typical: evolution instead of revolution. Of course, this also applies to the future technology of three-dimensional audio content.

"We've been in the audio world for many years. It is difficult to predict whether this change will be explosive or slow. But as 3-D audio applications continue to grow, we will continue to strengthen our commitment to this area," the brothers announce. The gaming specialists at Soulpix are already using Sennheiser's expertise for their virtual reality game "Eden". The brothers also see one of many possible future business segments in the broadcast segment, such as sports broadcasts on pay-TV.

Sennheiser even collaborates with the Berliner Philharmoniker. "The Berliner Philharmoniker give around 210 concerts a year. They're all sold out, mostly well in advance. If you can't get tickets or can't travel to a distant concert hall for time reasons, you'll find an almost perfect alternative in 3-D audio - at home, in a comfortable armchair. We want to transport the atmosphere of concerts authentically with streams. In a few years, this will be the standard. We look forward to the audio future and to actively shaping it."


Two CEOs - the dual leadership.

Two CEOs with equal rights - the dual leadership Daniel (top picture) and Andreas Sennheiser lead the company and its approximately 2800 employees as Co-CEOs with equal rights. How do they share the divisions? "Not at all", explains Andreas Sennheiser: "I come from technology, my brother comes from design. We have different glasses on, different perspectives. That's very fertile. If we disagree on the content, which happens more often, we discuss it out, in pairs or in the extended leadership. However, there are no democratic majority votes. You have to be able to convince the others."

Isn't such a consensus search very time-consuming and sometimes slow? They're laughing. Yes, that's probably where the socialization of Switzerland is taking effect, where they grew up and where the German Basta culture is not appreciated at all.

They only seek advice from consultants on topics that require specialist knowledge that they do not have, such as IT. Consultants could also carry out benchmarking more quickly and efficiently.

Looking back, the brothers are glad that they did not take over the helm in 1996, when their father withdrew from the operative business: "We were far too young and not experienced enough. We hadn't seen much else yet," Daniel remembers. "Personal maturity must first be earned. I couldn't even imagine starting at that time, whereas for my brother it was already clear at that time that he would one day go into the company. He consistently prepared himself for the tasks. I later saw how I could bring in my knowledge and skills."

Who is to follow the two brothers once - this question is still far from being asked. "This cannot be planned anyway, and we want to release our children from this as much as we have been released from it," the two entrepreneurs agree. "It is important that we stay very close to our customers and continue our culture of innovation. Creative dissatisfaction with the status quo is more important than the question of who is following whom and who from the family is joining the company operationally."



Author: Dr. Günter Kast

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