Villains have more fun

Nicolas Hayek, 80, the entrepreneur who transformed the Swiss watch industry, has one of the most remarkable business stories. Hayek Sr., has always come across as a showman, often wearing three or five watches from his wrist to elbow on each arm and mystifying interviewers with blunt comments. He was raised in Beirut, where he was born to a Lebanese mother and an American father. Hayek’s early childhood was comfortable, and his family moved to Switzerland when he was just seven. He studied chemistry, math and physics at the University of Lyon, in France, before founding his consultancy firm, Hayek Engineering.

Whatever his origins, Hayek has almost always had a clear vision for his company. Today, Swatch is one of the few operators in the market that is completely vertically integrated. The company has its own design team; it has extensive facilities in Europe for the manufacture of components; it has hi-tech manufacturing facilities; and it has an extensive distribution network with a string of retail outlets.

Back in the 1970s — when Hayek was working as a consultant in cars, telecommunications, watches and steel — the whole future of the Swiss watch industry appeared threatened by cheaper Japanese imports. Two companies, SSIH and Asuag, through brands like Omega, Longines and Tissot, produced most Swiss watches. But the new quartz technology allowed the Japanese to undercut Swiss craftsmanship, and Swiss exports were halved between 1974 and 1983. Hayek was asked to produce a report by the watchmakers’ bankers, who apparently believed that the industry would have to be liquidated. Instead, Hayek argued that the Swiss could regain their preeminence by reinventing themselves.

In 1984, Hayek bought a 51 percent share in SSIH and Asuag, merged the companies to form SMH and launched the first Swatch, a plastic watch made with 51 parts instead of the usual 150. He slashed costs, revolutionized the industry and produced the bestselling brand of all time.

Recently, I was fortunate enough to interview Hayek (who, at 80 years old, is as robust as ever) at the Plastic Royale Press Event in Bregenz, Austria. I asked him a few questions:

How do you keep up with the trends in the world so as to ensure the continuing popularity of the brand?

We don’t keep up. We make the trends. I go from the principle that every human being is very creative and is full of fantasy. Remember when you were five, six years old? But we lose the fantasy… because society, army, school, university, everything takes us out of it. We create the watches with our group of designers and developers. We create discussions and ideas… and then each time about four times a year we make our own collections and we influence very much with our collections all that is made in the watch business.

How soon do you get involved?

I used to be involved from the beginning… in every one of the meetings. Now I am involved when they come with some proposals. They bring them to me and show them to me and I have to choose.

How did you think of The Villains as a collection? It is such an ingenious idea.

You create your team. You give them the confidence that they are the best. Our team is made up not only of the designers, or the product developers, but also the marketing team. The group had come from a meeting with the James Bond people and our marketing head Costa said we should use James Bond but we cannot use James Bond because he is with Omega. “So what about using the villains, will you agree to this?” I said yes, it is a great idea.

This idea is again from our own central team of designers. We have in Milan a design group and in Biel. And they are ours — not outsiders. I keep telling them that we can do it within the company. At the beginning they said, “Oh, we cannot.” When I came back in, I threw out many of the design companies because they used to take our own people, hire them from us and then try to sell the designs from the same people who came from us to us. So I fired them all. And then the man in charge today came to me and he said, “But I need the designers from outside because I don’t know how to make the collection.” “Come on,” I said, “we are the best. Bring all your people and we are going to review it.” Today he is about the best. He is very proud. You cannot talk to him anymore. Sebastian Gas. I remember one day he was disappointed because his boss left. He had an Italian boss who was completely scared when I fired everybody. He left because he said we are not going to succeed. He said I was crazy and he moved to another company within the Swatch group. So I met with his assistant (Sebastian) and he sat down in my office and said, “I don’t know if I can.” I told him, “Come on. I’ll take the full responsibility. I can and you’re going to do it with me.” And he did a wonderful job. That was about four to five years ago.

Was there any design in the past 25 years that you thought was going to be a big hit and wasn’t?

Yes, we have every kind of thing. There are many designs that we thought were going to be a big hit that weren’t. Many that we thought wouldn’t become a big hit and did, and some we thought would just be normal and became a big hit also. You cannot judge 100 percent what the public will love or not love, especially an international company like we are. We are everywhere in the world. And sometimes the product is very much loved by the Chinese and not very much loved by the Americans, for example. But in general the tendency in all countries is the same, if the product is good and is loved somewhere, it is loved everywhere.

To be constantly designing, to be constantly improving, to constantly be ahead, that must take a lot out of you.

This is my life. I have always done this — everywhere. Still continuing, even in making cars, developing new sources of energy…

How will you continue this legacy?

Lots of people in this company are completely like me. They don’t need me anymore. As much as they used to.

They may not be as crazy?

I think my son is crazy enough. My daughter, too. Or they will be. The whole atmosphere, the whole ambience, the whole culture is the same.

There were two or three years that Swatch was going in a different direction. I was busy doing something else. Then, I took it back. We had given it to professional managers. There was a gentleman of Italy who was very good but he was trying to make it something else. Another Omega or Tissot, but you cannot make anything out of it except Swatch.

I believe Swatch is like an addiction because I enter a store and can’t leave without buying something.

Yes, I think that is the word for it. You got it right.