23 May 2011
Nick Hayek, Director of Swatch Group AG, is following in his father’s footsteps. The late, great Nicolas Georges Hayek, who sadly died last year, formed Swatch Group from the expiring remains of two other Swiss watchmakers in the early 1980s. It became the biggest watchmaking company in the world and, in 2003, Hayek Jr took the role of CEO. Yet it was not always clear that this would be the career path he would take.
Although he was a working adult when Swatch was formed, he did not immediately go into the family business. The young Hayek had studied film at the Conservatoire Libre du Cinéma Français in Paris and took up work as a director and producer. He focused mainly on short films but was involved in two feature-length productions – The Land of William Tell and Family Express. He was also working as a marketing consultant and it was this that originally brought him on board at Swatch.
Tough act to follow
In 1994 he was asked to assist with the company’s marketing strategy and initially worked directing commercials. As he told The Independent, though, it didn’t take long to be completely sucked in, “I was seduced, I must say, because working for a company like Swatch is cool.” Four years later he became President and finally, in 2003, was appointed CEO. Hayek is adamant that, although his father was the founder and CEO, he had not used these connections to further his career. “I never used my name; I never asked for special treatment because of my father… The board [chose to appoint me] without me knowing.”
Taking his place at the helm of Swatch cannot have been an entirely easy experience for Hayek. His father was widely credited as the man who saved the Swiss watchmaking industry in the face of overwhelming competition from Japan during the 1980s. He was also already recognised as one of the top businessmen in the country before that.
In many ways, Hayek Jr’s leadership style is an evolution from that of his father, rather than a continuation or departure. While Hayek Sr was very focused on the watches and watch technology, Hayek Jr has taken his creative past and is using it to find novel ventures for Swatch Group. Under his direction, Omega, one of the Swatch brands, has become an official sponsor for the London 2012 Olympic Games and the Peace Hotel in Shanghai has become the Swatch Art Peace Hotel.
Given that the current business climate is still fairly difficult, now could be the time for Hayek Jr to make an impression on the commercial world in the same way his father did. Two things that really grab the attention are these: His ideas regarding China and his growth targets for Swatch Group. It is no secret that many companies have moved their production to China to take advantage of the low labour costs and good technical quality available. Swatch, however, has kept 90 percent of its manufacturing in Switzerland.
Defending this attitude, Hayek told The Independent: “Industries are making a big mistake by moving production to Asia. To really do innovation, you have to keep production close, so you can talk about new designs. And the transportation cost [from China] is horrendous. Real entrepreneurs find new ways of producing things and marketing them.” Perhaps more interestingly he sees China not just as a ‘workshop’, but as a potential export market. In this way, the opening up of China is seen by him as an opportunity ready to be seized, rather than an obstacle to be overcome.
Timed to perfection
As for these exceptional figures, in March this year Hayek Jr announced that he was expecting to achieve annual sales figures of €8.4bn over the next three years. This will represent a total increase of 56 percent on 2010’s figures. He told Le Figaro that this would come through internal growth, “We will continue to invest in what we already have, in our brands and our production methods. We will put our faith in innovation and creativity, and we will develop our distribution streams.
Omega will very quickly attain sales figures of CHF3 or CHF4 billion. Swatch, Longines and Tissot each have yet to get to CHF1 billion, but Breguet is nearly there already. If you then add in the smaller brands… and the electronics, it’s not an unrealistic goal.” Swatch has also upped its workforce in anticipation of this growth, hiring 1,600 new staff last year alone with over 1,000 new positions being made available at its factories this year too.
Big shoes to fill
It is difficult to say whether Nick Hayek will eventually be held in the same regard by the international business community as his father; while he has been CEO since 2003, is was Hayek Sr who was ‘Mr Swatch’. With his death last year, it is the son who now fully takes on that mantle. But Nick Hayek is not his father and his way of managing the business has already proved to be demonstrably different – but with proven fiscal success and ambitious plans for the future, he is already growing into them nicely.