Swatch Group: Swiss Luxury Watchmaking | In Practise

Swatch Group: Swiss Luxury Watchmaking

Former CEO at Jacquet Droz, Swatch Group

Learning outcomes

  • The founding story and heritage of Swatch's Jacquet Droz brand
  • History of Swiss watchmaking
  • How Jacquet Droz emotionalized and curated stories about watch lines
  • The essence of product-led design and growth for luxury watches
  • Daring to be different as a luxury watchmaker
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Executive Bio

Manuel Emch

Former CEO at Jacquet Droz, Swatch Group

Manuel is the Former CEO of Jacquet Droz, one of the oldest luxury Swiss watchmakers globally. Jacquet Droz was founded in 1721 and has an average watch price of around $10,000. In 2000, Swatch purchased the brand and Manuel joined as CEO in 2001 where he led the brand from $250k to over $50m in sales in 8 years. Manuel was also part of the Management Board at Swatch and in 2010 he was hired as CEO at Romain Jerome, a Luxury Swiss watchmaker that focuses on contemporary luxury timepieces. Manuel now consults with luxury watchmakers in Switzerland and the Far East.Read more

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Manuel, could you provide some context to when you first joined the luxury watch industry?

I joined the industry back in 2001, but I was pretty much born in this industry. I’ve lived in Switzerland and I’ve been born and raised in a city that is famous for its watchmaking industries. It’s always been a part of my life. My grandfather, my mother and lots of my family members worked in the watch industry. I tried to flee away from it, not very successfully.

I studied Industrial Design and I did my economics studies and I worked more in FMCG and consulting, rather than the watch industry. I think it was back in 2000, I had this opportunity to join the watch industry, which I was, obviously, very aware of and very sensitive to, because of living in this environment, being born and raised in watchmaking families. I managed to join this watch group, back in 2000, before moving to Jacquets Droz in 2001.

Back then, I was in my late twenties, so I think I was the third youngest CEO in the watch industry, when I joined Jacquets Droz. I joined it, having worked for another company from this watch group.

What is the history and heritage of Jacquets Droz and why do you think that matters to consumers so much?

It has one of the oldest watchmaking histories. It’s a watchmaker that was famous in the 18th century. It was one of the leading watchmakers, back then. An incredible inventor of, not only watches, but also automatons, as you say. I think there was a lot of history, in this brand, because it dates back over 250 years. History and heritage are very important, because they build trust. They build this idea of longevity, of something that has been there, over the years, that has been of quality, over the years. But also, that has been current, to a certain extent. Those are elements that increase the perceived value and, therefore, build the trust into a brand.

History and heritage don’t, necessarily, mean that a brand has more value than another one. Nevertheless, somehow, deep inside this history and tradition and heritage, they build trust. We all think that a company that dates back to the 16th, 17th, 18th centuries, in any field, really provides this feeling of trust. We can trust this company, because it’s been there for years and years.

How do you bring that trust through into the story and the marketing and the product and the real core of the company?

I think you need to build bridges. I think it’s very important that there is something current. History is one thing, but the history only works if there is a something current, within this history. It is always these allegories or these bridges. The watch, in this product, is the hero and I think, if the product is not up there, everything else is secondary. The product has to be the key factor, because the product is what triggers and what, basically, makes the consumer buy. What was most important for us, back then, was to create a product that could relate to the past. But, at the same time, that was somehow contemporary, innovative and that was in its time, but at the same time, timeless and related to the past. That’s quite a difficult task, but I think we managed to do it, by getting a lot of inspiration from what was done back then, by the founder of the company, in the 18th century.

We spent a lot of time in archives, we spent a lot of time in auction houses and tried to understand what the key elements were. Then how to bring these key elements into a product that is building these bridges and is current, as I said, but also builds these bridges with the past. That’s the first thing, I would say.

From a product point of view, that was very important, for the watch. But also, after a few years, we starting producing automatons, which were elements that he was very famous for. They were animated mechanisms – back then, it was a writer, musician and draughtsman, that he mechanically animated, in the 18th century. With these ideas of something that is fully mechanical and animated, how can we translate that into something contemporary? We did this by creating automatons that told the time, purely mechanical. No technical aspect, in terms of the fact that there was nothing, apart from mechanical elements.

I think this was a very important for the product, but also for the story telling. The way that we pay tribute to the past, the way we explain our history, the way we position our history into the current time, is very important. First of all, by reviving traditional crafts that were used in the past, but were disappearing. That what also important for the product and the storytelling, as well. Then also, by creating this idea of a brand that travels, step by step, to link it back to the past, because he was travelling quite a lot, to different places, to promote the products and that’s what we did too.

We also brought back a museum, of historical pieces, that we built, that we used in roadshows, in events, to constantly refer to the past. There were a lot of elements in the marketing, in the product, but also within the whole philosophy. We were always thinking, what would he have done, back then and what would he do, today? Just because he was an innovator in the 18th century doesn’t mean he wouldn’t be an innovator in the 21st century. We always tried to keep this balance between the past, the present and the future.

Why do you think the Swiss do so well, specifically in building luxury watches, but also luxury more broadly?

I think, to a certain extent, the size of the country and the very high level of craftsmanship and capacity to create added value are very important points. We have mechanical, technical know-how. We have this philosophy of precision and perfection, additional to the fact that we have always been a very small country, so we just had to concentrate on developing and exporting, because our local market was always too small to cover the needs. Also, the fact that we were, to a certain extent, a neutral country, so when we were producing products or high-end products in general, people could appreciate it, without any other factors.

I think these are elements and then, don’t forget, back in 17th and 18th centuries, the Swiss watch industry developed to what it is today, also because there were political and social instabilities in the other countries, surrounding us. This meant that a lot of watch and jewelry makers, back then, fled to Switzerland and used their know-how to produce there. We talk of the Edict of Nantes, with the Huguenots, who fled from France and they were mostly jewelers. They established themselves in Geneva or elsewhere in Switzerland, because they were protected there.

They developed their know-how and, back then, when they fled to Geneva, there was a clerk, head of the Church, which was Calvin, which said there would be a very strict way of living. Dancing, singing, wearing jewelry, wearing expensive clothes, was forbidden. So these jewelers who fled from France, basically started to say, okay, we have the knowledge and know-how, in creating beautiful, small things. But jewelry is, more or less, forbidden, so what else can we do? They turned to watchmaking, because watchmaking was not something as it is today, such as an adornment; it was more a technical element that was used to tell the time because, obviously, people needed to have this information. This is how it developed in Geneva and, very quickly, they managed to create wonderful things, but didn’t have enough labor force, to further develop. So they turned to farmers, in the Swiss mountains. In the winter time, they couldn’t harvest and do other farming, agricultural work, so they asked them to start to produce components.

That’s why, today, you can see that the majority of centers of watchmaking are based in the Swiss French part, mostly in Geneva, but also in mountain regions, in the Swiss French part. That comes from historical evolution. We had, I would say, the know-how, the people, the environment, the organization and we also had a bit of history that played its role. Then the fact that we had this idea that we are capable of producing and promoting it, I think, makes a difference.

Can we take a step back now to the time that you were CEO, in a brand within Swatch Group. You mentioned how you were the youngest CEO in that industry. What was the biggest challenge you faced, as you stepped into that role?

I think the biggest challenge was to build a start-up within a big corporation. Obviously, the Swatch Group was and still is, the biggest watch producer in the world, with, I think, over 40 subsidiaries, 18 or 19 brands. It’s a big conglomerate. When I took over Jacquets Droz, it was a company that was reduced to its minimum. There were, maybe, two or three people left, when I joined the company. It was a start-up, within a big corporation, which, I think, is the most challenging thing. You have access to certain markets, you have access to supply; you also have access to funds, if you need them. But on the other hand, you are too small to be able to, I would say, comply with the organization of a big corporation. You cannot go into a subsidiary and say, we want to go to China, because China has a big market; it just doesn’t work. Why? Because you will be in an organization with an allocation key, where you will have a brand manager, you will have dedicated people, an allocation key and that, for a small company, is just not bearable, without recognizing that you will make substantial losses, every year and that’s not something that we wanted.

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Swatch Group: Swiss Luxury Watchmaking

March 29, 2020

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