retail news in context, analysis with attitude

by Michael Sansolo

Time has run out for Nicolas Hayek, and we’re all the poorer for it.

Now, truth be told, I had never heard of Hayek until I read his obituary last week. But instantly it hit me that this was the kind of person that every business should have. At least, businesses that are facing competition, economic news, struggles with employees, etc...

The odds are that you, like me, never heard of Hayek, even though we know his legacy. In the 1980s, Hayek was hired by a group of Swiss banks to preside over the shutdown of the Swiss watch industry. Long dominant in the world of watches, the Swiss had fallen into irrelevance thanks to the rise of Japanese time pieces and consumers’ growing preference for digital.

Hayek failed miserably at his assigned task. Instead of shutting down the industry, Hayek revived it by creating a company and a product known as Swatch. His obituary, as written by the New York Times, explains the change Swatch brought about.

“Lightweight, with vibrantly colored bands and breezy novelty faces, (Swatch) was remarkably inexpensive to produce. (It had 51 parts, as opposed to the nearly 100 needed to make a traditional wristwatch.) It retailed for less than $35 when it was first marketed in the United States later that year. The Swatch quickly became a sought-after collector’s item worldwide. It was very likely the first time that ordinary people had even considered owning multiple watches.”

In short order, Swatch led a resurrection of the entire Swiss watch industry, leading to a resurgence of even high-end brands. The company Hayek formed became a huge part of that high-end market, producing watches today under names including Tiffany, Omega, Tissot, Calvin Klein and Longines.

Now, this story doesn’t have an entirely happy ending. Today, the watch industry is threatened by a generation of consumers that eschews wristwatches, using their ubiquitous cell phones to tell time. But we shouldn’t skip by Hayek’s passing too quickly at all. After all, this is possibly the best story ever of taking lemons and creating highly profitable lemonade.

Hayek’s lesson reminds us that creativity, marketing, a sharp eye on cost-cutting and savvy management can sometime move mountains. Break down what he did. He took a fresh look at a dying industry and remade it by cutting costs, embracing simplicity and finding a vastly underserved market even though his product was extremely old.

Remember, Hayek wasn’t in the watch industry. He was a consultant - an outsider - brought in to provide ideas (albeit on the closing of an industry.) However, his fresh eyes saw dawn where everyone else saw dusk. It happens and can happen again.

More importantly, he knew how to recognize and harness talent. As The Economist wrote: “Mr. Hayek achieved greatness not for his particular talent as an innovator or as a marketer, but for the fact that he excelled at harnessing the ideas and talent of others.”

In other words, creativity still works, fresh ideas can still succeed and occasionally, old products can be brought back to life with a new approach. And what’s more, leadership and recognizing the talents of a team can lead to revolutions. Certainly there’s no guarantee of success, but failure isn’t a certainty either.

Nicolas Hayek showed us what is possible.

Michael Sansolo can be reached via email at . His new book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
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