If there is one star at BaselWorld who gets top billing, shining brighter than all the diamond-encrusted solid-gold watches in the display cases, it is Nicholas Hayek Sr., founder and chairman of the Swatch Group. It was Hayek’s stewardship of the Swiss watch industry in the 1980s, when it was reeling under an assault from cheap Japanese quartz timepieces, that helped the traditional, iconic industry survive. Today, some two decades later, 82-year-old Hayek presides over an empire comprising 19 watch brands. The Swatch Group pulled in revenue of at least 5 billion Swiss francs in 2009.
Hayek spoke exclusively to Mint on the sidelines of BaselWorld 2010 about leadership during the economic crisis, his plans for luxury brands Breguet and Jaquet-Droz, and what youngsters should do to create their fortunes. Edited excerpts:
BaselWorld, to a large extent, is a celebration of Swiss watchmaking. It particularly highlights great mechanical watches. But do you see this being attractive to young consumers? Do they even care for such expensive, mechanical products?
People are always telling me young people don’t want watches. They ask me why the hell I make watches. Why don’t I make something else, because this generation does not want watches. This generation can tell the time using so many other things. They have clocks in their mobiles, their phones, in their cars, in the airports and in so many places. Everywhere there are ways of looking at the time.
But I am not making watches only to look at the time. I am making jewels! They are jewels! Women put jewels here (pulls on ear lobes) and some men wear them here (points at chest and neck).
(Hayek undoes a button on his shirt and pulls out a set of lockets and jewellery attached to chains around his neck.)
I have jewels here that are worth very much. But why do I have them? Why do I wear them? I wear them because they are beautiful and nice. I like them. I like to look at them. And if I ever need money I can sell one of them.
Timeless: Hayek holds in his hands the Queen Marie-Antoinette watch originally completed by Breguet in 1827. Swatch
This reminds me of something that happened some years ago. I was speaking at a meeting of the German chancellor’s strategic group of industrialists. I was the only foreigner member of this committee. They wanted me to speak about how the Swiss industry had succeeded.
This was the time when we were launching the Swatch brand. So all the journalists wanted to talk to me. Especially one very tough TV journalist who wanted to interview me. She said, “Oh Mr Hayek, you are so nice. You are so good. You are so smart. You are so...”
And we men are stupid. We believe when a woman tells us these things.
So I agreed to let her interview me. And the German chancellor warned me. He told me she was a viper. One evening I went to this TV studio in Germany. Millions of people were watching. The lights came on and I thought she would introduce me as a great man.
Instead, she asks me: “Mr Hayek, why are you trying to make people buy two or three Swatch watches each when there are children starving? Aren’t you ashamed?”
I asked her how many neckties her husband had. She said that had nothing to do with anything. I told her if she didn’t answer my question I would get up and leave. So she said he had 25 or 40 ties. I told her “Aren’t you ashamed?!! Your husband has 25 ties? I didn’t know there were children starving. You knew there were children starving. How could you let your husband buy 25 ties? And a Swatch costs less than a good tie.”
My idea was to tell people that you should think of a watch not just as a means of looking at time, but as a part of your clothing. Like jewellery or an accessory.
Also Swiss watches are part of Swiss culture. I am not saying our culture is better than anybody else’s culture, but these watches are a representation of Swiss culture and the Swiss way of doing things.
You are passionate about Switzerland and often represent the country as an ambassador of sorts. Have you ever considered running for office or becoming a politician?
I have been asked this question several times. In fact, just two days ago, during a TV interview.
We must never forget that we are all very, very small things in a small spaceship, Planet Earth. Very small entities in the huge universe. So we must not think we are more important than that. That is one thing.
Second, I think I am a passenger on this spaceship called Planet Earth. And if I see anyone trying to make a hole in this ship, trying to destroy it for you or me or our children, then I as a passenger (will) try to jump and help to prevent this. This is what I have done all my life. And when we have corrected the problem I go back and sit in my place and I don’t try to get power.
Now in Switzerland I am very involved. We recently wanted to create new laws for Swiss banks. “Too big to fail” laws for the banks. The banks tried to lobby against this by saying that this was bad, and if the Swiss banks were more regulated then everybody, the whole economy will die. This was absolute baloney.
So I wrote letters to all the political parties and the industrial bodies telling them we need this law. Otherwise, every 5-10 years the banks are going to fail. Then I organized a press conference with two parties, one extreme left and extreme right, and told the banks that we could ask the people for a popular vote, we can do this in Switzerland, and these laws would be even worse than the parliamentary laws.
The banks and the government accepted our proposals. And then I came back to my seat in the office.
So then, when you wake up in the morning, how do you decide what to do? You have the company, so many brands, and then you have parliament and the banks to worry about. How do you decide what to do first?
(Laughs.) I wrote a book once in which the first line was that I have never worked a moment in my life. I have merely enjoyed it. Every moment. I am doing so many nice things. So I never wake up with a list of things. Except when I have meetings, in which case I am very exact with my time.
I live 97km from the office. I drive myself to work in the morning and back in the evening. I have two hands-free phones attached in my car with buttons on the steering wheel. So I take a lot of calls when I am travelling in my car. So I always have time to do everything.
But surely you have two or three secretaries constantly reminding you of meetings and appointments...
No! I don’t need to be reminded of meetings and appointments—this is luxury. I am a very normal man. Very normal. My family is a very normal family. We don’t have any jets, even though Forbes magazine has me on their list of one of the richest people in the world. But we have no jets, no chauffeurs, no big buses, no flying to Paris for shopping for Christmas. We are absolutely normal people.
Normal people don’t have three secretaries to remind them of appointments.
What are your thoughts on India?
I have written about this in many newspapers. People forget that India is one of the greatest cultures. They forget this. Maybe because you didn’t have colonies all over the world like the British. Indian people are intelligent and warm-hearted. I love India.
If you weren’t making watches and running these brands what would you have done in life? If you weren’t such an entrepreneur, what would you have done in life?
Oh, I do so many other things already. I helped create the SMART car. I run a company called Belenos along with George Clooney and Deutsche Bank.
See, if you follow my life, I have done many other things. I have advised the World Bank on industrializing South Korea, I helped the Chinese with steel plants and car plants. They love me for this, the Chinese. I have advised people in Great Britain, Brazil, United States, France, Germany... I have created lots of new industries in these countries.
In total, in Europe, I think I have created around 250,000 jobs.
And I think I do all this with the approach of an entrepreneur. I gave a speech about being an entrepreneur last year. It is on our website.
Apart from all this, what do you for leisure? On the weekends...
When I was younger, I played tennis. (Swings right hand rapidly from side to side.) I was a medium player. And I skied in the winter. Now I am too old to play tennis. So now I play billiards and swim in my swimming pool.
I have plenty of time. I refuse to serve on the boards of any big banks or third company. I refused many universities that want to give me honours. I don’t go for cocktail parties. Those parties where everyone is talking, but no one is listening.
Similarly, for Davos, I was at the beginning of the World Economic Forum with Klaus Schwab, and Schwab was on my board. The whole press was scandalized when I refused to go to Davos any more because only talks and no results were achieved; Klaus Schwab also left our board.
You take great personal interest in the Breguet brand, one of the top brands in your group and in the business. What is your vision for Breguet in India?
We must sell the 10,000 pieces requested by our clients in India and maintain our positioning of ultimate in prestige watchmaking. From Breguet for the young man starting his collection to the woman getting married. We could have done much faster in India if we had acted like some of the other brands and if we tried to evade customs duty, but we don’t.
I don’t want to be known at the end of my life as the king of smugglers. So I will not allow anyone to do things like that.
You have also just begun to take care of Jaquet-Droz. Your plans for that brand?
Jaquet-Droz has been kept low-key. I didn’t have time to look after the brand. And my son didn’t have time to look after it. No one had the time.
So while we had very good designs and form for the brand...the performance was not at all as strong as our other luxury brands. So while Breguet does around $550 million in sales, Jaquet-Droz does only $18-28 million. The whole yearly sale of Jaquet-Droz is equal to a week’s worth of sales for Breguet.
So what are you telling your Jaquet-Droz team? What is your message to them?
We have a unique message for each of our brands. This is a very strong part of how we operate. And the message for Jaquet-Droz is “Infinity is the ultimate dream” and the whole team of Jaquet-Droz is all excited about it.
And what is your message for other businessmen and entrepreneurs?
I have a message for young people. (Looks into video camera.) Please don’t sit in front of the computer and think you can make money by playing on the stock exchange. You are not creating wealth and you are not doing anything. You create things by being an entrepreneur, creating new ideas and products, and new jobs and new wealth. Do this, young people, this is the best you can do for the future.