David Novak 0:03 

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learning so that by the end of the episode, you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. Today's guest is Patrick Spence, the CEO of Sonos. So many tech companies that build consumer products are set up in a way where they make their products obsolete, every time they launch a new product. The idea is that the minute the new devices available, their customers will abandon the old product and buy the newest model. But what's interesting is that Sonos has a very different strategy, they set out to build their products to last, they want their customers to have their products for a long, long time. It's a unique approach in their industry. But there's something about it, that core principle that ties in well, with the mark of a great leader, you see, the great leaders, I know, they build the last, they make decisions to keep the brand strong beyond just the present moment. They develop leaders in their organization. So there's always a pipeline of strong talent, when new opportunities arise. They treat their customers with dignity and respect, which breeds long term brand loyalty. I could go on and on, and what you're about to hear from Patrick Spence, and how he leads Sonos as their CEO, is that he's leading with this build the last approach in all aspects of the business. I can't wait for you to listen in. Here's my conversation with my friend, and soon to be yours, Patrick Spence.

Patrick, it's great to have you on the show.

Patrick Spence 1:57 

It's great to be on David. I'm looking forward to the conversation. You know,

David Novak 2:00 

I got to start out by congratulating I looked at your numbers, he just came off a great first quarter your businesses is on a roll 2022 was record revenues, record margins, you know, I can't wait to learn how you're doing it. But first, I'd like to hear you give us your snapshot of Sonos and how do you define the business?

Patrick Spence 2:17 

Yeah, our ambition is to be the world's leading sound experience company. And so that means creating amazing products and services that bring amazing sound into the home. And now we've started to go beyond the home as well. So really, what we're trying to do is make sure that anywhere in your life, that you're enjoying sound, and that's a lot of places now with it being what I call in the golden age of audio, that we're there for you. And we're providing that sound and doing it in an easy way, in a high quality way, in a way that brings joy to everyone's life.

David Novak 2:48 

Speaking of sound, you got a great voice. I mean, are you really interested in sound and music and all that? Did that kind of gets you really psyched up about going into Sonos?

Patrick Spence 2:56 

Absolutely, you know, I think music really acts as a soundtrack for life. So you know, as you you hear certain songs, they trigger certain memories. And so music is such an important thing to be. But I will tell you a funny story on the voice side is, when I was in business school, we took presentation, lessons and courses, and we had an outside presenter. And when I got up there and presented, at the end of it, she was like, wow, she said, You must really love your father. And I was like, what, and she said, the people that have great voices and confident voices, and it's the men that do, it's a result of loving their fathers and having amazing fathers. And I'd never heard that before it, I thought it was the coolest thing ever. And I do love my dad, and I look up to him as a hero. And I thought that was super cool.

David Novak 3:45 

That is cool. I love it. And I love how you're really transforming your business. And you know, you have great legacy products, but you're constantly innovating. And by the way, one of your great new products is the room my family absolutely loves it. It's it's a portable speaker for all of you out there that you can take wherever you want it to go. It's such a great idea. Tell me the story behind Rome and and how you developed it.

Patrick Spence 4:10 

You know what we're thinking about the products and what we're doing it really like you hit it innovation is the key and the core, really to any business right in this day and age. And when I became CEO, I actually laid out an ambition for us to be introducing at least two new products every year. And that was a huge change from where we were because we had been shipping one product every few years. And we would, you know sometimes get caught up in making the perfect product at times. And we still toil over all the details. But we almost were doing a disservice to ourselves into the world by not actually shipping something. And so I really put this stake in the ground that we were going to unleash our talent and make sure that we're introducing at least two new products every year. Well as you can imagine. The other thing I did was say we're gonna go beyond the home and so that really started us down The road of both the move, which is a large portable product that we have in the room, that you talked about our ultra portable product, and getting into this idea of leaving the house, right, and being able to bring Sonos with you in other parts of your day and of your life. And so that meant bringing on some new expertise, expertise in Bluetooth expertise in battery life. And so we had to go higher and add those teams, we had to learn how to do things simultaneously. So we used to just work on one product, we started to work on simultaneous products, really spur the innovation. And so one of the other things that was important at that time, was trying to instill a bias to action inside the organization and saying, No, we can do this, and inspire the team to really, you know, take this action, and it meant working closely with the engineering leadership to say, how are we going to do this, right, it's not good enough to simply say, you know, we are going to do this and then disappear, it meant trying to make sure that we're prioritizing, understanding where products would fit. And we actually, in the midst of the pandemic, we actually changed our roadmap a little bit. And we prioritized Rome because, you know, we at that point, had felt like Rome would be the perfect product to company, the reopening of the economy. And people starting to leave the home and those kinds of things. So we got a little early in hindsight in terms of where it was. But we actually moved Rome ahead of another product, because we felt like it would be the right product at the right time. And that's always the conversations we're going through internally, is what's the right next product, as we think about what we want to build, we look at the whole audio landscape, and we look at people's lives and try to understand where are we not yet solving customer problems that we need to and with Rome, we knew that people wanted to take a Sonos product on the go and be able to carry that through on their backpack or their purse. And we said, Okay, we're gonna go solve that problem. We'll do it in a Sonos way, so that it's a great speaker when you're at home. And it's a great speaker when you're on the road. And that's what we were able to achieve with Rome,

David Novak 6:53 

you certainly did that. And that's great, it's nice to be able to say which products coming next, that's a good position to be in understand, you basically are in about 15% of households, and your customers, on average, have three of your products in the home. And your goal is to go to four to six. Now, that's a big goal. And you've already talked about how you sort of changed the thinking of the company in terms of, you know, two products a year, how do you get the people that you lead to buy into that goal and own it for themselves?

Patrick Spence 7:23 

I think it comes down to being very selective on who we bring into the organization. And when they come in, there's a couple things one is making sure they're aligned to the mission. And they're excited about the mission, right and want to go do this. And so we're in actually about 10% of the homes that we think we ultimately could be in, will do about $2 billion dollars in revenue this year, there's $89 billion that is sold every year in audio products. So we have a huge opportunity in front of us, and aligning with somebody that's coming into the organization that they see that opportunity, and they want to be part of that story. And their experience, you know, lends itself to actually being able to contribute to driving growth, thinking about new channels, thinking about new countries, thinking about new products, is critical. And then the other part of that conversation, when you're bringing them in is well, the culture we're trying to build. And I want to make sure that we are building a company that is adaptable, enduring and admired. Those are the things that we talk about internally. And so I've found that it's very important that upfront, we're having conversations about that and making sure that people are aligned to that before they come in the door. And then when when they're here, we are incredibly transparent. So even though we're a public company, we share our roadmap and all of our plans with everybody across the company. And we do that because the reason people are here is because they are passionate about and get excited about our products. And we want to make sure they can see that they see the future. They see what's coming. They get excited about it. And once you have that, it's not too hard to get people rally to go and bring these products to market. And everybody inside the company is just really proud to work here. Because anybody they bump into that they tell work, they work at Sonos, they'll say Sonos, I have Sonos. I love it, you know, and that's something that's pretty special. In this day and age, there's not a lot of companies out there that you can say that necessarily, you know, your parents or your friends or family members, we actually know what it is that you build right at the products that you're making. And so it's kind of like a combination of all of those things that come together to create the amazing culture that we have here.

David Novak 9:24 

You know, we recently had the CEO of Adobe Shantanu, Narayen. He was on and I think anybody would say Adobe is a very innovative company, and he hates the word failure. How do you look at failure,

Patrick Spence 9:37 

two things shaped by life. One is technology and the other sports. And so certainly, you know, losing is not something that, you know, I really take to hate it, in fact, but at the same time, it depends when you think about failure in the sense of, you know, maybe if it's not permanent, it's a moment for potential learning and understanding. And so, I do think that there are Things You can learn, and there are risks that you need to take right in order to try and stretch yourself. And it might lead to failure in a particular area, I think it's our job as CEO is to make sure that we're not hurting the organization as a whole in a position where it might fail. You know, you want to be creating areas for the company and the people that take risks and potentially fail. But if they fail, are you learning from it? Can you continue to move forward as an organization? I actually think that's critically important. And I think fear of failure can actually hold you back sometimes. So I think, calculated risk taking is important to making sure that you're really pushing what you're capable of, and innovating, quite frankly.

David Novak 10:40 

Yeah, I think you and Shanu are aligned on it. He just thinks that failure is something you have to embrace because it comes with the territory of being an innovative company, you don't, you know, I found one of the ways that frees up people, as a leader in an innovative culture, like what you have is to talk about the risks that you've personally taken that didn't work out, can you share one of your risks that in your, you know, I don't know if we want to call it a failure or not, but you know, a time where it just didn't work out the way you thought it should? Or would?

Patrick Spence 11:08 

Well, I'll tell you, so really, I've worked at two companies. I've been fortunate to be part of two incredible technology stories, one Blackberry, and the second Sonos. And when I was at Blackberry, we had a really important moment, when we needed to pivot the organization, in my opinion, to something called BlackBerry Messenger, it was an opportunity at that point to grow something that was leading the world, we had 80 million daily active users in BlackBerry Messenger. At this time, the only other messaging solution was WhatsApp at 5 million daily active users. And we had the opportunity to take BlackBerry Messenger and run it on iOS, Android desktops and make it the standard in the industry and probably take that 80 million and grow it into hundreds of millions of people using a messaging service that people love to at least 80 million were using on a daily active basis and absolutely loved. And I was unable to convince the organization that that was the right decision and pivot to make and give up some of the hardware that was associated with Blackberry. Because at this point, if you wanted to be on BlackBerry Messenger, you had to get a Blackberry phone. But at that point, as well, Blackberry phones were falling behind. And in my opinion, at that point, we'd already, you know, begun to lose the race against iOS and Android. And so we really needed to make this shift in order for us to continue and move forward. And it was classic innovators dilemma and not being able to, you know, give up the revenue stream and that business of what we built in the past the hardware to be able to make that shift into the services and a cross platform messaging service. And, you know, I think if we were able to do that, we would have been able to navigate the future in a much different way. I think BlackBerry would still be around more relevant, it wouldn't be known for phones, but it might be known as the standard messaging platform that's out there. And so I do look back, particularly given I grew up inside the company, and I'm a proud Canadian, and it's a Canadian company, as the inability for me to convince the right people, Blackberry to make that shift is probably, you know, the biggest failure of my career.

David Novak 13:20 

When you think about that, what would you have done differently, looking back and having a little bit more wisdom, as you think about, you know, leadership,

Patrick Spence 13:26 

probably taking it as far as the board. And I didn't do that, at that point, I think I could have been even more vigilant in pitching this and laying out my vision for where the future was, and wasn't and really pushing harder than I did, I think I could have taken it, you know, to another level. So as a result of that, you know, I make sure that each person on my leadership team has a relationship with at least one of our board members, and they have a trusted relationship over time, because maybe there will come a time that somebody on my team, you know, needs to I'm not listening, right, and maybe I can't see what they can see. And they, you know, they need to, you know, talk to the board and they need to potentially do something game changing that I'm not going to see and so I try as a learning from that to create a situation and governance where the right things will happen. You know, no matter who is in the COC, you got

David Novak 14:25 

to be really secure to do that. If you always spend that secure in your yourself that where you'd say, hey, I want you to know, my board members. You know, most CEOs like to control that board, like they've got an absolute lock and key.

Patrick Spence 14:37 

No, I have definitely not been that secure all the way along. And I think when I was first starting out as a leader, I was trying to emulate too many other people, right, where you read all these books about, you know, business legends, and you're watching the You know, the founders and the CEO is at Blackberry and you are taking your cues from those individuals. And so I do think over my career Now and a big part of this, I would say is the founder of Sonos, who was the one that handed the reins to me, John MacFarlane, you know, just in leading from a more authentic place of who I am. And look, this is why I go back to sports is because I grew up playing a lot of team sports and ending up in a position where I was leading a lot of those teams and a lot of underdog teams, quite frankly, and having a lot of success. And it's those lessons and how to rally people and bring people together. And that's kind of my superpower is bringing, you know, a group of people together and achieving something that no one thought possible, maybe even those people. And so for me, I think I've really come into my own authentic leadership at Sonos, thanks to John and the team, you know, that has predated me and then as well, our board, quite frankly, David, we have an incredible and very supportive board. And I think they enable me to create a situation. And a culture that really is open is transparent. And, you know, I'm really trying to lead in an authentic way, and try to do the best thing for Sonos. And I think it's been a long journey to get there. But that is where I am today. And I just think that, you know, it's good for the people on my team, it's good for the board to have those connections. And we're a better company as a result of it.

David Novak 16:18 

You know, you mentioned, you're a Canadian, and you talked about your love for sports coming up as a kid. Can you tell us a story from your childhood that really shaped the kind of leader that you are today? You know, a specific example. You'll just always remember?

Patrick Spence 16:32 

Yeah, so in high school, I switched high schools. And I was big into basketball. So even though I'm Canadian, I'm not the traditional Canadia that just played hockey. I played a little hockey when I was young, but I focused on basketball and volleyball, in fact. And so, in high school, I met a coach John Thrasher, who was absolutely incredible leader, super tough coach, and he talks about us being a band, we have different roles. And you know, I think he said, I play the tuba that we had somebody else that was a better shooter that was the lead singer and going through that. And I'd never really thought about the team in that way. But together, right, we would make beautiful music, and go through it. And we were a team that was not very big, I was our center, and I'm six foot four. And so we weren't the most athletic team. But we really acted as a team, I'm still great friends with, you know, five or six players from that team, all the starters. And so we were able to come together through, you know, some great coaching and motivation, but also like that teamwork and friendship, to win what in the United States, I guess, would be considered our regional and upset a couple of teams that were much more talented than we were and go to, you know, our provincial finals, which was huge for us in our year. And I really look back on that as a pivotal moment. And understanding the power of people playing their roles, I was quite good at defense and rebounding. So that's where I would focus. And then we had somebody that was really good at shooting, and we had somebody that was really good at defending on the perimeter. So it defend the breast guard, and everybody playing those roles so that we could win as a team, and the power of that, and we were all very different personalities as well. So it was such a fascinating life experience to go through that. And it's been something that I think about a lot. And I had a chance to coach later on as well, when I was in university, coached some teams. And I certainly brought that to bear. And I really think every day, a lot of what I put to work is from what I learned in sports, you know,

David Novak 18:25 

you mentioned that you're Canadian, and I love Canada, I love your country, and I love the people in Canada, you're really known for being really nice guys. Do you put yourself in that category?

Patrick Spence 18:38 

I do. I think most people that know me would say that I'm pretty nice person. But I also probably unlike many Canadians, I'm also very competitive. So I would say that I'm abnormally competitive for a Canadian. And I think there were a number of us like that at Blackberry. And it's why we were able to build the company into the one that it became. And so yeah, I am pretty relentless. I'm pretty competitive. And those are not typical Canadian traits.

David Novak 19:07 

So you're nice, but you're really, really competitive. So you're no Mr. Nice Guy, you know, tell us a story of where you really had to engage in some very significant productive conflict.

Patrick Spence 19:19 

Probably the most conflicted would be so at Sonos we partner with, but we also compete with all of the biggest technology companies in the world. And many of your listeners will probably know that. At one point, it reached a point with one of those partners slash competitors, Google, where I had to make the decision to actually sue them for patent infringement, and also testify in front of Congress in terms of some of their behavior. And so that being a innovative small technology company in the United States, taking on one of the largest, most powerful companies in the world, that probably tells you a lot about what I'm willing to do. to stand up for what I believe are the rights and the inventions of the little guy, quite frankly. And so that is probably the most public and prominent example of me, you know, being willing to stand up and embrace conflict. At the end of the day,

David Novak 20:16 

when you got great products, like you have big people like Google, they're gonna try to rip you off. I mean, there's no doubt about it in on, you had the courage to take on the big guy, when you're going through that process. As a leader, did you have any sleepless nights on that me you ultimately win. But did you have any sleepless nights along the way, or just business as usual,

Patrick Spence 20:36 

you know, as a leader, many sleepless nights, it is the loneliest job in the world, I have an incredible wife, who's a social worker and an amazing support. I have incredible boards that are great and supportive, and an amazing sounding board in those situations. But there's many sleepless nights when you're dealing with decisions that impact people's livelihoods that take on big decisions that can distract an organization. In some cases, one of the things I'm most proud of is, we didn't lose any of our innovation pace, you know, while we took on Google, so we continue to introduce at least two new products every year. So you know, you want to keep the organization focused. But all of those things went into my mind the money associated, you know, we're not a huge ly profitable organization. And so the investment that it requires, is that better spent somewhere else, there's a lot of those things that you think about late at night, and you know, you have to process and then you have to process in the light of day you do with yourself, you do with people you trust, and then you make a call and you stand behind it and and you adapt as necessary, right. I think that's the other thing is there's some situations where you might have to adjust right, and from what you learn, and from what you you hear and what happens. And so I think being open to that, as well as pretty important as a leader, but as you know, many sleepless nights.

David Novak 21:53 

What role do you think that independent small midsize tech companies have in American innovation?

Patrick Spence 21:59 

This is why I've testified in front of Congress why I believe that it's harmful to society that more and more power gets concentrated in fewer and fewer hands, is that I think society would be much better off with many more independent smaller businesses employing a lot of Americans, we have half the number of public companies we did 20 years ago. I mean, we could do with a lot more innovation, a lot of different perspectives, more diversity out there, stronger balance in the country, so we're not so coastally, heavy, if you will, if we were able to create the conditions to have more and more small and medium sized businesses and really see them thrive. And I worry, I worry about the future of innovation, I worry about the ability for startups to really thrive in a world where, you know, there's a few companies that really dominate and acquire companies, you know, along the way to try and reduce competition and some of those things. And that's why I've been trying to stand for innovation and competition. And I just think, David, we would be a much more vibrant country, if we had a lot more small and medium sized businesses.

David Novak 23:07 

Well, I really appreciate your passion and noble cause for that effort. I think it takes a lot of guts to stand up for something like that and put your neck out there. You know, you mentioned your wife earlier, and I got to ask you this, I want to find out if this is really true. You said she's fairly supportive. And I know she must be because is it true that after you got married, you moved your wife to Australia, basically, one week, after you got married, how in the world, you pull that off.

Patrick Spence 23:38 

My wife is probably more adventurous than be and thankfully, you know, even more understanding that I had. So she saw it as an adventure. Her best friend, thankfully was actually living in Australia, if you can believe that or not. And she saw that I had a great career opportunity, which was to really open Asia Pacific for BlackBerry as well. And so we sat down, we had that conversation, and she has just been incredible. We had our first child in Australia, you know, like halfway around the world. It's just amazing to think about, we moved back to Canada after a couple of years in Australia. And then an opportunity came up to go lead the BlackBerry business in Europe, Middle East Africa and London. And there, my wife was again saying, yeah, like, let's go, you know, let's go have this adventure as a family. And then when it was time, you know, and I was worried about joining Sonos and leaving blackberry and we're living in London, then it was okay, there's this company that's just starting up in Santa Barbara, California. And again, Erin was there to say if you think this is the right thing to do, you know, for our family, then we're up for the challenge and she has been so understanding and influential and such a strong partner, you know, in all of this, I could not be more grateful. She really is just an amazing person and, and I would not be the leader I am today without her influence.

David Novak 24:56 

I feel the same way about my wife Wendy, and you're a true global exec At Vemma, you've traveled the world with us mention Asia, Pacific, Middle East, North Africa, Europe, you know, tell us a story about an experience that taught you the most, from your international days,

Patrick Spence 25:11 

the thing I've taken away, you know, having worked in probably 4050 countries specifically at this point, I will tell you, the thing that surprised me the most being a Canadian who had never traveled outside Canada and the United States, before I went and started opening the Asia Pacific region for Blackberry, was the fact that we're much more similar, you know, then different to anybody in any country. What I found, David is, most people, when it comes down to it, you know, are trying to build a great life with their family, and I got to meet a lot of amazing people and their families and build a career, right, you know, and do a good job, if you will, going through it. And those two things, you know, really stood out for me, as I think about people. And I think about sometimes the differences that we see, or we are perceived to have, you know, country to country, region to region, is the biggest thing to me was landing in all these different places, meeting all these different people, and realizing, you know, what, we're all largely trying to do the same things, do a good job, raise a family, you know, have a good life. And if we can remember that, and stay focused on that, I think we could maybe reduce some of the conflict and the tension that's out there. But I'll tell you my first experience, and it just blew my mind. First time I was in Hong Kong was to launch Blackberry. And we hadn't launched in any Asian countries at that point. And we were doing it with canning Fogg, who was leading Hutchison, and he was basically a celebrity there. And so we turn up in this giant ballroom, in Hong Kong, he arrives on a speedboat across the harbour, and he walks in, and there must have been 50 photographers, like taking pictures of him, like he's a celebrity basically coming to present on the stage. And he presents the talks about how just remember your BlackBerry to Hong Kong. And there I am, you know, at that point, 26, I want to say, you know, first time ever in Hong Kong, turns it over to me to present about BlackBerry in front of all this media, all these people in this massive exhibition hall. And then I started to go through the BlackBerry story and some of those and I just, I look back on that, and it was like, wow, and you realize, like, sometimes, okay, like, Here I am, and you just got to own it, and present and go through it. But there were a few moments like that, where you pinch yourself when we were launching in India, and there was a Bollywood star there, and she was incredible and gorgeous. And they're like, all the attention there. And then here's Patrick to talk about Blackberry. These surreal situations that you just kind of are like, Okay, this is strange, but I'm gonna go with it.

David Novak 28:01 

I love it, you know? And so your BlackBerry for 14 years, you obviously had a lot of love for the company. What was it like watching BlackBerry's ultimate demise? And what did you learn from it that you've tried to keep front and center as you lead Sonos?

Patrick Spence 28:16 

You know, I put those lessons to work every day, I think it's the reason that I'm in a healthy way paranoid, as well about the importance of innovation and culture and some of these things. If you would have caught me, David, I would have bled Blackberry, you know, both as a Canadian, and then somebody who was there, I joined when there were 150 people, virtually no revenue, and we took that to 70,000 people and 20 billion in revenue. My last year, man, I played an instrumental role in making that happen that I'm still very proud of. But a couple things that really happened there, I feel that are the reason that it is where it is today. And the first is, when Apple introduced the iPhone, we got overly focused on responding to the iPhone and Apple. Verizon wrote us a ginormous check to create the response to the iPhone, it was called the Blackberry Storm, our first touchscreen product. And we launched that. And over the course of a weekend, we almost threw away 10 years of hard work in building up everything BlackBerry stood for because the product was not good. It was not reliable. We'd rushed it to market as this response based on the pressure from both Apple competitively and then Verizon, instead of building our own, you know, response. And so I'll tell you how that directly related to Sonos when Amazon and Google brought out their smart speakers that were $25. And our speakers would range from 200 to $1,000. And there were people inside the company saying, we need to rush out at $25 Speaker. I said, that's exactly what we're not going to do. We are not going to respond. We are going to build the next set of best Sonos products, you know, and we're going to take advantage of some of the services that they're offering because those are valuable to customers. But you know, our future is not copying what somebody else is doing and selling it a lot. So for instance, and then the other big lesson, I think, is the classic notion that what you do today may not be what you need to be doing for the next, you know, five years from now, 10 years from now. And so that story I was telling you about BlackBerry Messenger, where I think we really needed to pivot and open up BlackBerry Messenger was something that I think about every day, and it has directly translated into a relationship we have at Sonos with IKEA, where we actually take Sonos inside of IKEA products, and you still use the Sonos app. But IKEA has embedded Sonos, and some of our sound inside a lamp inside a bookshelf speaker, because, you know, a lot of our magic is the software and what we've built and the whole experience. And so I've used that as an opportunity to teach the organization that, hey, we may need to think about other ways to really build our business and our company as we think about the future. And so those are two specific, you know, big examples that I think I put to work every single day.

David Novak 30:58 

I think it's really cool what you're doing with IKEA. That's really, really smart thinking. And so he joined Somis in 2012, five years later, you become the CEO, was becoming CEO, always the goal for you. One of

Patrick Spence 31:11 

our early investors tells a story about sitting with me early on maybe like a year into Sonos, and me saying I absolutely want to be a CEO someday. And he told me and I'd say said, No one's ever said that to him. And he always thought it was weird. But I kind of felt like, you know, this, it'll sound strange as a Canadian, but it's probably the competitive thing. But it's also I think, my experience from team sports. I kind of felt like it was something I was destined to do. And maybe not specifically CEO, but just leadership in general and leading a team, but it's kind of where I ended up with most sports teams. It was kind of the trajectory I was on at Blackberry. And then when I joined Sonos, I knew the founder, John, you know, we had had open conversations that he wasn't going to do the job forever. And so it was something that I was interested in. I was always curious about. And I'm just so grateful. I've had the opportunity to actually take on the role and see what it's all about here at Sonos,

David Novak 32:02 

you know, when you're having the big company meeting. You sound to me, like one of those guys who just can't wait to get up there and give the big speech? Do you feel like the organization is needing you? And how do you feel I always crave that. I mean, I don't mind a minute, how about you,

Patrick Spence 32:18 

I love it. But I'll tell you, I got some interesting feedback through the pandemic, which was that we shifted. So we would do typically an all hands meeting, either once a month prior to the pandemic, and I would stand up on a stage here in Santa Barbara, and it would be broadcast around the world and our people here would be in person. And I would say I got good reviews, it fired me up, for sure. But the interesting thing that I heard during the pandemic was I shifted the cadence. So we went to weekly, all hands, just so that we could keep communications high, right, because there was a lot of uncertainty, I wanted to make sure people had the support they needed. And I was communicating pretty frequently. And I got a lot of positive feedback on presenting from my home office sitting down in a little more casual environment of it seeming much more authentic and much less like the CEO you all expect to see on the stage versus Patrick the person and, you know, human leader that actually people needed to see in the pandemic. So it was fascinating to me to get that feedback kind of through this and it's made me think in terms of the way that I show up and how I make sure that there's almost like that presentation mode versus you know, just trying to make sure that I'm being authentic and you know, being kind of relaxed, maybe a little bit more and a little bit more, you know, natural in terms of that versus going into this presentation mode and try to nail it and you know, when the presentation to some degree when those hearts and minds I find it energizing, I absolutely do. And the crazy thing is I am an introvert but I find that very energizing to speak to the whole company and be able to tell our story. And we have such great people. So I just love it. I love it.

David Novak 33:57 

You know, you mentioned you work on showing up the right way. Do you have any daily rituals that you do to show up?

Patrick Spence 34:03 

I do. The most important daily ritual for me is I get up at five in the morning, I get hydrated, I have a coffee start to get ready for the day. And then I hit the beach at 5:30am. And I work out on the beach here in Santa Barbara with an amazing group of people. We lift sandbags, we run sand sprints, we do some pretty crazy stuff. But I have found it incredibly powerful to start the day with physical activity on the beach, you know, watch the sunrise breed that fresh air here the waves crashing. And that puts me in a frame of mind that I feel like allows me to be a better husband, father and leader because I'm ready to take on the day I've done that it's under my belt. I have the energy from that. And it allows me to pull any of the challenges and you know this from your past like all the daily crises that come up, be able to put those in perspective and deal with those in the way that I want to deal with them right which is in a calm collected, you know, kind of calculated way. And that has been something that is incredibly important and I think made me just a better person.

David Novak 35:08 

Patrick, you've moved up organizations you've taken on more and more responsibility had more and more people working for you more and more people that you're accountable for, as you've taken on more and more responsibility, what was the biggest personal leadership challenge you had?

Patrick Spence 35:23 

You know, I think the the biggest mistake that I made was in my career at Blackberry, I felt like the number of people reporting to me and the number of things I could be involved in, you know, was a sign of strength versus thinking about the kind of team I'm building and how I'm supporting the team. And so I'll take you back to when I left Blackberry. I think at the last moment, I had 21 direct reports. And I was trying to be involved in every major deal that we were doing as leading our sales and marketing globally. And in hindsight, I thought that was a show of strength. And I was a great leader as a result that I wasn't because I wasn't giving those leaders the kind of support that they needed. I wasn't empowering them. And I wasn't leveraging myself in that way. I was way too involved. And so John, and really, my experience at Sonos and some of the board members here helped me understand that is not, you know, the key to being successful in it, it wasn't going to enable me to really rise to the next level of leadership, not as a little bit leadership by brute force and ego, quite frankly, you know, here, I've taken a much different approach. And I would say to a person, all the leaders on my team here, are much better at their area. And really, in terms of my weekly one to one with them, they have the agenda. And my question is, how do I support you? What can I do to help and that is why I am here, if I am successful, I'm making very few decisions, and I am helping those people on my team be successful. And that's the way I look at it now. And really, I think the test of any leader, particularly CEOs is where is the organization, you know, 10 or 20 years after you leave. And that is what I think about every day. And I think about my team in that way, I think about our next generation of leaders. And that way I think about recruiting in that way. And am I you know, setting up the team and the leaders so that one of them can step into this role when my time is done, and that we're building the capabilities in the organization to adapt as necessary so that we can be one of those companies that endures. You know,

David Novak 37:21 

Patrick, as I was learning about your company, it seems to me that Sonos has a very unique approach to technology, most technology companies want to obsolete their products, so that you have to buy new ones, you want your products to last, walk me through the journey of arriving at that kind of strategy. And why do you think it's an enduring strategy?

Patrick Spence 37:43 

It is so counter to everything in consumer electronics, like you said, most companies are, quote, unquote, refreshing their products every year, and they're trying to get you to buy new ones. And they're not investing in those components. You know, both John, our founder and myself having done large companies before and built something of scale. And I would say importance, we decided that building something for the long term and enduring is something we wanted to do. Because too many companies are built for the short term, maybe to sell or to go public. And then you know, they kind of lose their way. And so that goes right down to the product that we wanted to build and thinking about how we build something that lasts for a long time. And what our hypothesis was, and this has played out, it's taken a while we've been shipping products, since 2005. At this point, is that those customers would be loyal to Sonos if we're loyal to them and creating better experiences over time. And so we are very proud of the fact that we create products that lasts the longest of any consumer electronics products out there. And it's paid off in the sense that customers have come back and added more over time. And that is also a business model that is very different than any ones that's out there. We don't want customers to upgrade their product every year replace, or what have you. What we look at is, how many additional products have you added to your home. And as you mentioned, you know, now we're up to an average of three products per home. We're fortunate enough to have some people that have you know, 30 Sonos products in their home, I really think that the maximum of what we can have as an average of people's homes is really just a figment of our imagination, like what products can we come up with as we think about that life and sound throughout your life, right and throughout your day. And so it's really been a philosophical thing to try and build amazing products that lasts for a long time, because it's something we would want as consumers, it's something we think is better for the environment. And so it's just something that's been important to us. And I think when you're hiring for that, when you're thinking in that way, it can't help but influence also the kind of people that you're attracting to your culture. And so I think that helps in trying to build a company as well that's enduring.

David Novak 39:53 

We'll be back with the rest of my conversation with Patrick Spence in just a moment, creating products that are built to last us Something another great leader keeps Top of Mind Scott Mahoney, the Chairman and CEO of Peter malarkey.

Scott Mahoney 40:06 

It's not about margin, it's doing it right. It's controlling distribution, it's doing the right things, it's treating your customers, right, making your products great. And having integrity in your company and in your products.

David Novak 40:20 

If you're enjoying this conversation with Patrick Spence, I just know you're going to learn a lot from my interview with Scott as well. Go back and listen to episode 59, with Scott Mahoney here on how leaders lead. You've mentioned culture more than once in this conversation, and I can tell you're really passionate about that. Give us an example of how you personally champion the culture, you want to see what are those behaviors that you want to see in your company that you purposely recognize and reinforce every day.

Patrick Spence 40:54 

So respect, transparency, ownership and collaboration are the ones that we're very focused in on. And so probably the most important thing is actually measuring the people on my team and all of the managers in the organization on those. So half of your performance review is what did you achieve? And half is how did you achieve it, and we use 360s, we use our employee surveys to see how we're doing in terms of living up to those behaviors. And so we put a pretty rigorous system in place to actually make sure we're living up to them. Because it's, you know, you've seen this a million times, right? It's easy to say these words, we actually put examples of what it means and what it doesn't mean, into documentation that we share with the organization. And I lead that session. And so there's a session that a video now for all new employees that walks through the behaviors and what it means and what it doesn't. And that comes from me, because it does start with me. And I think about how I show up in those ways, and work through it. And that's very important to me that I live to those behaviors, as we call them internally. And then, you know, looking at my review with the board, and then the review for everybody on my team and all the managers, like I said, we make sure that we're living up to those. And that I think is important, because that is what enables you to walk the talk,

David Novak 42:10 

I have to tell you, my ears kind of perked up. But I heard you say that cultural fit is a misnomer, that you're not a big fan of the idea of cultural fit. Explain.

Patrick Spence 42:20 

Yeah, no, I think that's a huge misnomer. And I think it's what's led to a lack of diversity in organizations as well. What we're looking for in every hire is cultural evolution. If you are not evolving in this day and age, you know, and heading in the right direction and getting better every day you are dying. And companies out there need to recognize that. And so every new hire needs to contribute to the culture and help push the culture into the future and in a new direction, versus just fit in with the thing that worked yesterday, right? And so we're always looking for that cultural evolution as we think about our next hires.

David Novak 42:56 

I've also heard you say that everything you say as a CEO has outsized impact, give us an example of where you might have learned that the hard way?

Patrick Spence 43:05 

Well, I think the they won't tell me the ones where like, it's pretty used as a hammer, if you will. But I remember at rim there were many where you'd be sitting in a meeting, and somebody said, Well, Mike, or Jim, because we had co CEOs, Mike or Jim said this right? You know, and it was something crazy, you know, they said this and like, you know, and I would hear it and be like, but if we did that, like that would, you know, be the wrong thing for the customer for the business? And so I'm sitting there going, they wouldn't, and I knew both of them know, well enough to know. And so I would often because I'm, you know, again, probably just like a little bit more determined than most I would weigh in and say, well, they may have said that, but that's not what they meant in terms of like, then people be like, oh, you know, what do you mean? Who are you to interpret what they say actually said this. And so I'm just careful about where I show up. And what I say. And I'm pretty thoughtful in terms of how I do that. But I've actually said to my team, and I've said to the broader company at times, if you heard that use, I've actually said this, if you hear my name used in that way, and you don't think it's the right thing. Like, please make a better decision or like if you you know, flag it to me or something like that. And of course, you know, it's never perfect. I'm sure it gets used here and there. But I remember that being such a, you know, such kind of like a hammer used on certain things to reduce debate or, you know, kind of push through something that seemed silly, and I wouldn't let it happen. And I hope we're building a culture where certainly when my name gets taken advantage doesn't you know, just pass through, that's for sure.

David Novak 44:33 

You know, this has been so much fun. And I'd like to have a little bit more with you, Patrick, if you don't mind with some rapid fire questions. Are you ready for this?

Patrick Spence 44:41 

I'm ready, fire away.

David Novak 44:42 

What are the three words that best describe you?

Patrick Spence 44:45 

Humble, loyal, and I hope indomitable.

David Novak 44:51 

If you could be one person for a day, who would it be beside yourself?

Patrick Spence 44:55 

There's two on this right? Because there's got to be a business and a sports angle. And so on the business side I I'd love to be Tim Cook just to see the operations of an amazing product company at that scale right at scale that society has never seen before. But on the sports side, I'd have to say Nick nurse, the amazing coach of the Toronto Raptors, just to see how he brings all those personalities together and gets them to play together as a unit. I think that would be amazing.

David Novak 45:18 

Your biggest pet peeves.

Patrick Spence 45:22 

undisciplined people,

David Novak 45:24 

your favorite Canadian band?

Patrick Spence 45:26 

Oh, The Tragically Hip

David Novak 45:28 

on a scale of one to 10 rate the 2022 Super Bowl halftime show.

Patrick Spence 45:34 

Oh, 10 out of 10 they rocked it. That was amazing.

David Novak 45:39 

Do you play any instruments?

Patrick Spence 45:41 

I do not.

David Novak 45:42 

What's one thing that only a Canadian would know about Canada?

Patrick Spence 45:48 

What a tuk is?

David Novak 45:50 

And what's a Duke?

Patrick Spence 45:52 

I think many Americans call it a beanie.

David Novak 45:55 

You go. And what's what's one thing about you that few people would know.

Patrick Spence 46:01 

I was with Paris Hilton the night before she went to jail.

David Novak 46:06 

And we'll leave it at that. Okay. And what would one piece of advice be you'd give to anyone who wants to improve as a leader,

Patrick Spence 46:14 

be authentic?

David Novak 46:17 

You mentioned I think that you want to be adaptable, enduring and admired as a company and I understand the adaptable I understand enduring. Why admired? Why is that so important to you is a trait that you want Sonos to have,

Patrick Spence 46:33 

because it's a reflection of whether we're building something that people care about, quite frankly, you know, and that they see, and they admire the craftsmanship of what it is that we're building. And that's that's important to me, that's important. All the people at Sonos

David Novak 46:47 

Patrick, I've just written a book called take charge, review how self coaching can transform your life and career. And I've learned over the years that you know, really great leaders like yourself, you're really good at self coaching, you're really good at assessing yourself and figuring out where you need to go next. How do you self coach? What's your process for really saying, Okay, this is how I'm going to take Patrick to the next level.

Patrick Spence 47:09 

So I consume an incredible amount of, you know, reading and podcasts about what other leaders are doing. And I'm trying to learn all the time. So I am a voracious consumer of content around what the best leaders are doing, to try and pick up tips here and there, and then having conversations with both my team and the board, and anybody I can. So what I've found, which is really interesting to me is most of the CEOs out there are willing to take a call right from another CEO, and just have a conversation about challenges they're going through and these kinds of things. And so I've never really found that having, like one individual mentor has worked for me. And so instead, what I've done is basically try to learn something or pick something up from every single person that I interact with, you know, regardless of where they are in the organization, regardless of whether they're CEO or not. And so for me, just trying to be curious and learn and get better over time picking up things from people I work out with in the morning, from anybody that you know, we happen to come across in social situations, and just trying to understand their story and learn something from them. I think you'd be surprised where you can pick those things up. And of course, a podcast like yours, and many of the different podcasts and books that are out there today, everything is out there that will allow you to kind of learn and figure out the way that you should be thinking about yourself, and maybe how you can get better, as well. And then in that early morning period, I do a little bit more reflection before I work out typically. And so I'm generally reflecting and doing a little bit of gratitude to just in terms of how fortunate I am but also reflecting on, you know, the way I showed up yesterday and the way I hope to show up today.

David Novak 48:42 

One last question. You're you're highly reputed for being a what I would call a customer maniac. I mean, you are focused on your consumers, you want to know what makes them tick. What do you do that is unique on that front as a leader?

Patrick Spence 48:56 

Yeah, I mean, my email is available on our website. And so I get emails from customers all the time, you know, good and bad. And I will tell you the number of emails I get from customers talking about how much they love their Sonos and the way it's helped, you know, a family member that was suffering, you know, actually get through and people in the pandemic having challenges or dance party for a young family. I mean, just these incredible stories that people share with me are so powerful, and I share those then with the rest of the company too. And I've gotten more feedback on sharing those customer stories with people internally, man, how positive is for them because you know, day to day you're grinding through like a lot of different challenges, right, but to give the organization a chance to hear the stories from our customers of how slowness is bringing joy to their life and how it's impacting them. It's so powerful. Of course, I'm getting you know, lots of customer care and support asks as well and go through that. But I can't imagine you know, another company that gets the kind of glowing emails and positive customer reviews like people are taking their time to write me a About how much joy Sonos is bringing to them. I mean, I just could not be more grateful for the opportunity to receive those. And for what we're building here. Well, I

David Novak 50:09 

gotta tell you, I couldn't be more grateful for the time you've taken out of what I know, it has to be an incredibly grueling schedule to have this podcast with me. You know, our goal is to really help leaders learn from other great leaders. And there's lots of wisdom that you provided today. So thank you very much, Patrick. Appreciate it.

Patrick Spence 50:26 

Thanks, David. I've really enjoyed it.

David Novak 50:36 

Can you believe that Patrick has his email on the company website, talking about building a brand last, he's getting great insight from these customers and showing them how committed he is to their success? That's fantastic. And now it's time for my favorite part of these podcast episodes, where I get to give you a little coaching this week, as part of your weekly personal development plan. Here's what I want you to do. Think about the key functions of your business and ask this simple question about each one of them. Are they built to last? Your business strategy, your people capabilities, your products and services, your key processes? Are they built to last? If not, I'm going to give you marching orders for the next several months, because I want you to make the necessary changes to strengthen each part of your business. So it's successful and sustainable. So do you want to know how leaders lead what we learned today is that great leaders build the last. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be. I'll see you next week.