John Eales

Swiss watch­mak­ers re­spond to the drum­beat of time.

The Australian - The Deal - - Contents -

VISIT the Vallee de Joux in Switzer­land and it is like step­ping back in time. The streets are quiet, the peo­ple un­hur­ried, the air clean, and the choco­late out­stand­ing. It seems a lit­tle sur­real. Some­times, how­ever, a step back in time can teach you lessons that may pro­pel you for­ward.

I first vis­ited the Vallee five years ago on a trip to the Man­u­fac­ture of Jaeger LeCoul­tre, the fac­tory of the 180-year-old watch com­pany. It was in re­sponse to an in­vi­ta­tion to meet the com­pany’s rugby team and I have since be­come an am­bas­sador.

I have grown to love watches. My first was passed down by Nonno, my Ital­ian grand­fa­ther. Un­for­tu­nately that’s all it had in com­mon with a Patek Philippe. I couldn’t even tell you the brand. It wasn’t dig­i­tal, I had to wind it, and it wasn’t ap­pro­pri­ate for a 10-year-old boy and his Boy’s Own pur­suits.

Watches have al­ways told me the time but since that first trip to Switzer­land they have also taught me many lessons. Watch man­u­fac­tur­ing is Switzer­land’s third largest ex­port in­dus­try be­hind gold and pack­aged medica­ments, and its growth over the past decade has been phe­nom­e­nal. While the coun­try ac­counts for about 2 per cent of the bil­lion plus wrist­watches pro­duced ev­ery year, it holds about 60 per cent of the value of the global mar­ket. Ac­cord­ing to a Fed­er­a­tion of the Swiss Watch In­dus­try re­port, the av­er­age price of ex­ported Swiss watches was $US791 com­pared to China which ex­ported more than 20 times the quan­tity but at a unit value of just $US3.

From my en­coun­ters with de­sign­ers, through man­u­fac­tur­ers and with re­tail­ers five key lead­er­ship lessons stand out from the Swiss watch in­dus­try:

Form ver­sus func­tion: The cre­ation of a watch is the ul­ti­mate cou­pling of art and en­gi­neer­ing, but the bat­tles be­tween those two dis­ci­plines are waged wil­fully within a man­u­fac­turer. De­sign­ers be­hold beauty of in­creas­ing com­plex­ity while the en­gi­neers en­sure, de­spite de­mand for in­no­va­tion, their watches still keep time. The ap­pro­pri­ately named “com­pli­ca­tions” – any func­tion be­yond the stan­dard dis­play of hours and min­utes – only ap­pear in the fi­nal prod­uct if they sur­vive the prob­lem-solv­ing process be­tween de­sign­ers and en­gi­neers.

Pre­ci­sion mat­ters: Though they rely on the hu­man hand and not a me­chan­i­cal pro­duc­tion line for their con­struc­tion, they must still be pre­cise. The Con­t­role Of­fi­ciel Suisse des Chronome­ters only awards its of­fi­cial tim­ing cer­tifi­cate when, over a min­i­mum 15 days of mon­i­tor­ing, the watch av­er­ages be­tween +6 and -4 sec­onds a day.

Com­pe­ti­tion and co-op­er­a­tion: In an in­dus­try with rel­a­tively few play­ers, ri­val or­gan­i­sa­tions must both co-op­er­ate with each other for greater ef­fi­cien­cies and com­pete. At var­i­ous stages Jae­gar LeCoul­tre has man­u­fac­tured the core mech­a­nisms, known as move­ments, for many other watch brands in­clud­ing IWC, Vacheron Con­stantin, Patek Philippe, and Aude­mars Piguet. In the same vein, Swatch Group owns the ETA com­pany that sup­plies about 70 per cent of move­ments for the Swiss watch in­dus­try. To take on the world they must first en­gage with each other.

How the new saved the old: In 1978 the pop­u­lar­ity of Ja­panese-led quartz watches be­gan to over­take me­chan­i­cal watches and ex­ports of Swiss watches fell from 40 mil­lion in 1973 to just three mil­lion 10 years later. In 1983 the So­ci­ete Gen­erale de l’Hor­logerie Suisse launched Swatch, a quartz ini­tia­tive to save the in­dus­try from im­pend­ing dev­as­ta­tion. Swatch is now one of the largest and most pow­er­ful watch brands in the world. It parked the pride of the in­dus­try and chal­lenged norms to se­cure its fu­ture. Now, some of the old­est me­chan­i­cal brands are as strong as they have ever been.

Lead­er­ship of brand: Swiss watch­mak­ers have moved be­yond com­modi­ti­sa­tion of their prod­uct to cre­ate luxury brands peo­ple love, un­der­stand and re­spect. Patek Philippe’s, “You never ac­tu­ally own a Patek Philippe. You merely look af­ter it for the next gen­er­a­tion”, clev­erly marks a watch as a gen­er­a­tional, time­less and even priceless in­vest­ment.

The Swiss watch in­dus­try still faces many chal­lenges. It will be in­ter­est­ing to see how it re­sponds to the smart-watch trend, and the Swiss franc’s re­cent sep­a­ra­tion from the euro with the sub­se­quent sud­den price rise for their cus­tomers in many coun­tries. How­ever, the spirit of the Vallee has some­how re­mained rel­e­vant in the past, so there is no rea­son why we shouldn’t back it to do so again.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.