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There Is No Business Skill More Important Than Excellence and Attention To Detail – Lessons From The Swiss Watch Industry

For decades, the Swiss Watch industry has enjoyed global domination in the Watch market. It seems that in any other country in the world watchmaking is not taken as seriously as a job or profession. Many countries do not have any formal training institutions for watchmaking or watch manufacturing companies of their own but the Swiss have understood and nursed the trade for generations.

Watchmaking is not for everybody. It takes time and commitment. Often, there are over 200 small parts in each watch movement. The parts in a watch are so little that everything has to be exact. You need to be super patient and have dexterity, analytical abilities, practical problem solving skills and be able to memorize where things go so that you can be able to put all the parts in the right places. Watchmakers wear a loop, a magnifying eye piece that enables them to see in detail the intricate internal workings of the watch called “the movement”.

The Watch industry is the third largest exporter in Switzerland after chemicals and machines. The industry has excelled in product innovation, brand management, industry structure and institutional framework.

Swiss made watches can be found in virtually all countries on the globe, and the prices range to suit different consumer spending abilities. There are quartz fashion watches priced at several tens of dollars and more complicated mechanical masterpieces, with gold and other precious stones, selling at several hundreds of thousands of dollars. It is this wide product variety and global sales that continue to drive the success of the industry.

Production Models

The Swiss watch has traditionally been produced using two model. In the first model, early-stage manufacturers and subcontractors produce watch movements and other components and deliver them to assemblers, known as “établisseurs” who then produce the final products. In the second model, larger integrated companies manufacture the entire timepiece on their own.

Labour Force

In the 1970s and 1980s, economic crises and technological upheavals occurred due to the appearance of the quartz watch and this resulted in a major reduction in the size of the Swiss Watch industry. The industry shrunk from about 90,000 employees in 1970, to just over 30,000 in 1984. The structural change within the industry and the comeback staged by the mechanical watch in the following decades saw the sector grow again and manpower start to increase again, to a level of 57,300 employees in 2013. Meanwhile the number of companies fell from 1,600 in 1970 to about 600 today.

Markets

According to the The Federation of the Swiss Watch Industry (FH), the Swiss watch industry’s leading trade association, Asia absorbs 53% of Swiss watch exports by value, Europe 31% and America 14%. Africa and Oceania each account for around 1%.

The Watch industry in Switzerland has remained a solid and key pillar of the Swiss economy. Apart from surpassing its own export records year after year and recording total export sales of 21.8 billion francs in 2013, it is one of the country’s most efficient industries and its products set the standard by which all others are measured both in Switzerland and all over the world.

Industry Collaboration

According to Wikipedia, on May 14 May 1876, the Intercantonal Association of Jura Industries was founded in Switzerland. In 1900, it became the Swiss Chamber of Watchmaking and Allied Industries, extending the focus to include jewellery, gold & silver work, and music boxes. The Swiss Federation of Clock and Watch Manufacturers’ Associations (FH) was established in 1924 by delegates from Bern, Biel/Bienne, Fleurier, Geneva, La Chaux-de-Fonds, Le Locle, Porrentruy, Tramelan, and German-speaking Switzerland. On November 19, 1982, the two organizations merged to became the Federation of the Swiss Watch Industry (FH).

On one hand, the FH provides its members with a large series of services in the fields of legal, economic and commercial issues, representing the sector as a whole, both in Switzerland and abroad. On the other hand, it acts as a privileged counterpart for the authorities, the media and the public in general, coordinating policy-making within the industry.

“Swiss Made”

Over the years, the term “Swiss Made” has become synonymous with excellence, quality, technical supremacy, aesthetics and luxury. The Swiss made label relies not only on considerable intrinsic value, but also on criteria defined by law. At present, the conditions stipulating whether or not a watch or a clock can display this famous label are determined by a Switzerland Federal ordinance.

Conditions of use have been significantly strengthened in order to better protect the value of the label. The ordinance governing the use of the name Swiss for watches includes a new definition of the Swiss watch not only in response to concerns in the industry, but also to satisfy the requirements of the new Swissness bill passed in 2013. The FH takes action on a daily basis to protect Swiss made and other geographical indications, such as the name Geneva for example. It is for this purpose that the names Swiss made and Swiss in particular have been registered as certification marks in the United States and Hong Kong.

Industry Can Create Employment, Culture and Influence Global Perceptions

The Swiss Watch industry is an interesting example of how an industry can create a culture, open up markets and influence global perceptions. It has played an immense role in defining how watches are perceived all over the world. It has combined art, science and engineering to create watches as not only just timepieces but machines requiring sophisticated and well skilled technicians and engineers to design, manufacture and service. It has created thousands of new jobs not only in the manufacturing process but also in the supply chain.

What can other world countries learn from the Swiss Watch industry about using product innovation and industry excellence to create new avenues for employment and global participation?

Watch this video on how Swiss Watches are made

About The Author

Desmond Mapfumo is a Mindset Coach, Startup Builder and Consultant. He is the Founder and Contributing Editor For Inspiration Media Publications. Inspiration Media is member of the Rebirth Group, which he also founded and leads as the Chief Executive Officer.

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