Category Archives: Passion

Live your passion

Excerpt from our book on Family and Children

Is it more difficult on the market for family businesses than for big corporations?

Peter: Basically, yes. We primarily work with agents, some of whom are better than others. Our distributors generally work very hard on our brand’s behalf, but we still have to conduct plenty of training sessions to highlight the achievements and remarkable values of Frédérique Constant.

Aletta: The alternative would be to set up our own stores, but we don’t want to go that route because it would be too costly and would entail a much greater investment of managerial effort. We already have three stores and I always emphasize that there won’t be more in the future.

So big corporate groups have an advantage?

Peter: Yes, definitely. Groups own stores which carry many brands and can therefore work much more efficiently. Everything is optimally well organized.

Aletta: The second advantage involves collaborative purchases of advertising. Because of their large size, they know exactly what they’re buying. As a comparatively small business, we’re weaker there. First, we cannot buy so much. And second, we don’t have much experience with media planning. Unfortunately, much still occurs by trial and error.

Peter: Finally, big corporations can exert group pressure. If you’re a jeweler and you want to carry brand A, you’re compelled to also carry watches from brand B. This coupling can be very aggressive. They sometimes go so far as to insist that jewelers either remove Frédérique Constant from their assortment of merchandise or lose the privilege of carrying watches made by successful brands that belong to big corporate groups.

Aletta: When a jeweler is put under such strong pressure, he may regretfully have no choice but to turn us away because he simply cannot afford to lose one or another of the big brands. That’s the situation in the business these days.

Peter: So we rely on smaller family-owned jewelers who also order from corporation-independent suppliers and can thus cultivate a healthy mix of brands.

An alternative would be to operate you own boutiques.

Peter: We’ve opened boutiques in Seoul, as well as in China, Hong Kong and Saudi Arabia. Our agents operate them. We also have at least 150 shop-in-shop points of sale, where we’re much more successful than in our own boutiques.

Why?

Aletta: It’s not easy to lure customers into a single-brand boutique. We’re simply not yet known well enough. There’s also the problem of costly rents and high expenses. With our moderate price level, proprietors must sell very large numbers of individual watches to make a profit. The situation is different at a shop-in-shop because customers are already in the store. They stroll by, notice us, feel interested in our products, receive well-targeted advice … and buy our watches!

Sooner or later, every purchase is followed by customer service.

Peter: Frédérique Constant guarantees all its products for a period of two years. If there should be any sort of issue with one our watches, fifty service centers around the globe are available to help our customers. All centers are networked with our headquarters. If they don’t have the parts they need, we send the components without delay. We also offer a repair service in Geneva for more complex watches such as tourbillons. Each watch receives a tracking number so the customer can follow the progress of his watch’s repairs via the Internet.

How do you handle claims for compensation of the sort that occasionally arise with watches sold under a two-year guarantee?

Aletta: Yes, there unfortunately are some customers who hurl a watch to the ground or otherwise mistreat it. They then claim that the product was at fault and they insist that the damage is covered under the guarantee. In such instances, we closely scrutinize the watch in our factory. After ten years of experience, we can correctly determine the cause of the damage.

Peter: But ultimately we prefer not to fight about it. We would instead find a generous way to settle the dispute.

Have there been any really extreme cases?

Aletta: A truly aggressive customer will contact us about once a year. We usually opt to return the purchase price. We have 100,000 satisfied customers each year, so a single angry one doesn’t tip the scales very much.

Aletta: Less than one percent of our merchandise is returned to our factory. Our service centers also perform repair work, but returns are very minimal. The errors in our manufacture are manageable.

Why is that?

Peter: Frédérique Constant continues to produce very many quartz watches and timepieces with comparatively simple self-winding mechanical movements, both of which are inherently less vulnerable to errors. The quality of each watch is meticulously controlled before it leaves the factory. And we seldom have problems with watertightness.

Aletta: Watches with Frédérique Constant’s insignia are watertight, but we deliver all our watches with leather wristbands, so our customers usually take them off before they go for a swim. That’s a big advantage.

Peter: We’ve observed that Frédérique Constant’s customers almost always treat their watches with care. Problems with watertightness are quite evident in general. Sport watch brands can tell you all about it. We’re seeing it with Alpina.

How do you find the public administration and the governmental authorities here in Geneva?

Aletta: They’ve undergone big positive changes in recent years. When we first arrived, we had to show them our business plan for the coming five years – and we weren’t sure they’d accept it.

Peter: Wealthy people have it easier because they bring money and they pay money. Our situation was different. We basically didn’t possess anything at that time, but we hired a lawyer with relevant experience and he took care of it for us.

You own a family business, so you must also think about the next generation, especially because you’re not planning to sell Frédérique Constant. You have two children – a boy and a girl. Do they like watches?

Frederique_Constant_10_Years_HBM_Celebration_5

Frederique Constant 10 Years HBM Celebration with Aletta, PJ and Eline. Also in photo Daniel Pasche, President of the Swiss Watch Federation and Julia Kosheleva of Protime.

Peter: Our children are still young. Basically they have fun with watches. Our 16-year-old son is more interested in science and our 12-year-old daughter would be more likely to take an interest in watches. But at such young ages, it’s too early to begin thinking about that.

Are you bringing up your children so they’ll one day take over your business and continue it?

Aletta: We’re taking a rather passive approach with their upbringing as far as someday taking over our company is concerned. At home, they already have to listen to so many stories from the daily life of a watchmaking manufacture. There’s no way to avoid that, but we aren’t actively bringing them up in this direction.

Peter: When the time comes for them to decide, we want our children to be totally free to choose what they want to do and what they would prefer not to do.

Are they interested in knowing what’s happening at Frédérique Constant and how the business is developing?

Aletta: Basically, yes, but they don’t say “now I’m going to be the boss.” They’re still too young for that. But our son was here many times during summer vacations and he helped at Alpina. He worked on the apps. In this way, he gets to know that an entrepreneur has to work very hard and with unflagging concentration to make sure that nothing drops into his lap by mistake! As the saying goes, “Nothing’s for nothing.”

As a mother, would you be pleased if your children were attracted to the business?

Aletta: Yes, of course, how could I not be pleased by that? It would be wonderful. If it works well, it’s fantastic.

What is it like for a married couple to share their business life and to work so closely together?

Aletta: Now and then I hear people say it must be problematic. I admit it can be difficult at times. But when it works smoothly, there’s definitely nothing better.

Peter: We share the same passions and we also share the occasional worries. That makes things much easier.

Aletta: I see things similarly with regard to the children. If they choose to join the business and everything works smoothly, it would be marvelous. But suppose they graduate from university and take jobs with companies located somewhere halfway around the globe. Then we would see them only rarely. It would be much nicer to have our children working under our own roof.

Do your opinions about Frédérique Constant sometimes differ drastically from your husband’s views?

That naturally happens now and then. But I know how to convince him that my opinion is right! Seriously though, our views seldom diverge extremely far apart.

Peter: Differences of opinion are most likely to occur when we didn’t have the time, or didn’t take the time, to sit down together and discuss the problem in depth. We each have our own clearly defined fields of activity in which we think and act in a results-oriented manner. Often the disagreement is really only about which path is the best route to our shared goal.

Aletta: The form of the dialogue is always important because we both already know the contents. How should I phrase what I want to express? There’s a certain difference here depending on whether you’re talking with a colleague or with your spouse. Even if we didn’t work together, the ways and means of our communication would be decisive for our mutual understanding. I believe that the right way of interacting can solve at least half of all problems.

Passion Awards

Many elements inspire success. Goal, energy and ambition play their part. But the fundamental element in building a successful charity is Passion. Passion for your mission, Passion to do good, Passion to give back.

Twenty five years ago, we started a company that was unlikely to succeed. We founded a new fine Swiss watch brand. The market for hand-made, high-value mechanical watches was dying. We were very young. And not even Swiss, but Dutch. Two decades later, Frederique Constant is one of the main success stories within the Swiss watch industry. The company grows 25-35% annually. In 2014, with a team of over 170 people, Frederique Constant expects to produce and sell over 130,000 watches in over 100 countries.

The overriding factor for this success has been Passion. Passion that made us evolve from lovers of fine watches into global producers. This is why the company slogan has always been ‘Live your Passion’. And why we created the Frederique Constant Passion Awards. Through these awards, we personally aim to reward charitable organizations that are driven by Passion, and celebrate and support their entrepreneurial success. The Passion Awards have evolved in to an institution through which Frederique Constant gives back to society, and namely to people that are less fortunate.

Winners of the previous editions of the Frederique Constant Passion Awards are Dr. William Novick of the International Children’s Heart Foundation and Mrs. Laura Cotton of the Paint a Smile Foundation.

After two memorable editions in Geneva, we choose another city for this very special event: New York. The prize in 2010 included a generous donation of USD 50’000,- towards the American Heart Association, as well as Frederique Constant timepieces.

The check handover was part of the exclusive, celebratory Passion Awards for Charity dinner, hosted by the company and taking place in New York City on June 29^that Cipriani Wall Street.

Live your passion – Our History

It all started with our passion for watches. Then, the passion of our watchmakers was added and we have been on a journey to build a thriving watch manufacture. With our slogan LIVE YOUR PASSION, we encourage others to share in our passion for fine watchmaking.

True passion has always been the result of fine sensitive processes that happen over time – not the exploits of some exciting moment. It represents our internal drive, not our daily habits or needs. While our habits change, our drive continues to be the result of our character and heritage. Time and moments pass. The accomplishments of our drive remain over time. This has been the true aspect of passion at all times.

The idea for this book started during a seminar on the “Rockerfeller Habits” in Amsterdam, where we attended with the Management Team of our company. In the past years, various people – journalists, customers, suppliers, industry colleagues – had suggested to write a book about our passion and the history of Frederique Constant. It was the suggestion of the members of our Management Team that made us think more seriously about the idea.

The primary purpose initially was to create a book as a publicity vehicle for potential customers and new employees. To explain how and why the company came into this world. There is certainly also an ambition to leave some kind of a legacy, to leave behind a “rule book” on what we envision as the long-term culture of the company. That it may serve as a motivation for those working with us to continue to grow Frederique Constant, Alpina and Atelier deMonaco. Last but not least, this book’s intention is also to show our children more in-depth what their parents have been spending so much time on in the past twenty years.

We learned from the YPO workshop “Write That Book”, that it takes over thousand hours to develop and finish a book manuscript. Considering the time we were spending already on work, this hardly sounded like an appealing proposition. The book idea was officially postponed to a later date when we would have more time. Still, the temptation to write something more comprehensive remained. Writing press articles and blog entries did relieve some pressure, but it was never enough. So, quietly we began to develop a book outline. With the help of Gisbert Brunner and Alexander Linz, we were able to structure scattered thoughts and information.

This book is a mix between a “Coffee Table Book” and “Business Book”. You will find ample text on the business aspects of the company, our Purpose ”Let more people enjoy luxury” and the company Core Values. You will also find plenty of photos and images that tell the story of the creation of watch calibers, models and their manufacturing. Most important however is the story of the people in the company, the customers and the suppliers. We are very grateful to have been able to work with many excellent people during the past twenty years. Without them, the company would never have been possible.

The next pages will start with an in-depth explanation of the “Accessible Luxury” concept that has been the basis of the creation of Frederique Constant over twenty years ago. We will explain many details and specific anecdotes in the following chapters in interview format. Each company Core Value is described later including an interview with colleagues for the respective value.

We have often been asked the reason for the success of our company: “Tell me, what is the single most important success factor?” Unfortunately, or fortunately, there is not one answer. It has been the combination of many factors that created success at the various development phases of the company. While it is very important to have a clear strategy, we are truly of the opinion that you have to do many things right to have success. That means hard work and long hours. You can read all about it in the rest of this book!

Frederique Constant watches are first and foremost very classical. Over the years, various Frederique Constant customers asked us to develop a sports collection. However, we always saw this as a conflict with the strategy to create, produce and market classical watches. For us it was essential to stay consistent with the classical strategy. Then in 2002, we had the opportunity to acquire Alpina, a watch company founded in 1883 with a long history in sports watches. This acquisition gave us a vehicle for sports and lifestyle watches.

Later chapters describe the extensive history of the “Union Horlogere”, the company that created and registered Alpina in 1901. How this company was revolutionary with it’s “Alpinist” concept of collaboration. We have a mission to revive Alpina to its former glory as a world watch brand. It is work in progress.

Atelier deMonaco was incorporated in April 2009 and is the third watch company in our group. Atelier deMonaco creates and produces high-end watch complications – a Minute Repeater, Perpetual Calendar and various Tourbillons. It is in this company that our most talented watchmakers can express themselves and gain experience while marketing their unique watch creations. Atelier deMonaco is ultimately an implementation of our “Personal Development” Core Value.

Thank you for your interest in our watch manufacture and we wish you a joyful reading on our passion.

Aletta & Peter Stas

Sophisticated Ideas. With Power.

Repost by Tom Morris, Ph.D. (Yale University)
See Tom’s blog article at TomVMorris

A Simple Luxury: Everyday Beauty

Every morning, we get these push notifications from social media – this person has requested or accepted a LinkedIn connection, that person has endorsed you, there is a new comment on your post, and you have new followers on Twitter. Going through the first run of emails for the day, I usually brush by these quickly. But today, a name caught my eye. I have a new Twitter follower who is the founder and CEO of one of the world’s most interesting companies, and one that I especially admire.

In 1988, Peter Stas and his wife Aletta Bax launched the Swiss watchmaking firm of Frederique Constant. Their vision was simple and brilliant: craft beautiful, elegant watches that would be useful works of art, and accessible to more people than the already existing high-end timepieces for which Switzerland had long been known.

If you are fortunate enough to have artwork in your home that you love – paintings, drawings, sculpture, beautiful rugs, china, or pottery – I hope you enjoy each piece nearly every time you pass it, or sit near it. And if you have easy access to a great museum, or gallery, you can visit to enjoy whatever is on display, sometimes created by the most talented of artists in history, or perhaps in your region of the world. But what about the rest of your time? Are you in touch with beauty in an ongoing way? I’ve come to believe quite firmly that there is a deep aesthetic dimension to our experience of the world, every day, and that we need frequent contact with beauty, in many of its various forms, in order to be our best, feel our best, and flourish in the most complete ways.

A beautiful watch is a small work of art, inside and out, that can go with you nearly everywhere, available throughout the day to add just a spark of the aesthetic to your experience. But the most beautiful watches, for the past half century, have become exorbitantly expensive, and have, in many circles, turned into rare luxuries whose value has subtly shifted, from intrinsically valuable works of art, to often primarily social signifiers – signs that set their wearers apart as members of the cultural elite, the “one percenters” with power, money, and status. Too many people who purchase such amazing, small handmade machines of intricate elegance that sit on the wrist and provide some of the most important information we can gain, do so these days primarily for show, to prove something, to indicate their level of financial attainment and membership in a rarified club of peers. Luxury, in step with this, has become almost synonymous with inaccessibility, the unaffordable and out of reach for the majority of people who could genuinely enjoy that experience of using the goods and services typically thought of as luxuries.

Peter rightly saw that this has gotten all out of joint. Luxury, at its heart, is meant to be primarily about ease and enjoyment, not social display and status achievement. So he and Aletta set out to create beautiful watches, useful works of art that could travel with you throughout your day, and be accessible luxuries, valued primarily for their mastery of craftsmanship and aesthetic qualities, not simply for their brand symbolism, flash, or bling. But of course, beauty has its own flash and bling. And now their brand, Frederique Constant, has become known for its purity of concern with luxury in its original sense, providing ease and enjoyment, which, of course, for most of us must involve reliability, something else they view as of peak importance. They significantly underprice their competition, not by cutting corners on quality, but by focusing on what really matters, and on what they most want to accomplish. And they provide beauty to more of the world, as a result.

Welcome to my little philosophy family, Peter! You believe in the right things!

What makes us unique?

1.	We are classical. Our watches are classical, sometimes slightly contemporary. Heart Beat is our long-time signature.
2.	Since 2001 we are developing and producing in-house manufacture calibers.
3.	The company started with passion and we invite our customers to share our passion with our slogan ‘Live your passion’.
4.	Our visual image in publicity is always linked to our passion visuals, the Car Driver, Boat Driver and Ladies Charity. The persons in our advertising radiate happiness and passion.
5.	We donate to heart and children related charities. We strive to do good.
6.	We position ourselves in the Accessible luxury segment and strive to always offer maximum value for what our customers invest in our watches.
7.	We are an independent family owned company and the friendly alternative to the Groups.

Let more people enjoy luxury

More people:	Democratize luxury; Make luxury accessible to a broader group of people; Equality; Not elitist.
Enjoy:	Pleasure to own and experience a beautiful and well finished product; Appreciate quality and refinement; Make people feel happy, good; Share passion; Show you have taste; Feel strong, reassured, recognized; Have a memory of a special moment.
Luxury:	Beautiful products; Quality of design, materials, and manufacture; Attention to details; Refinement; Craftsmanship; Respectable brand.

We do not want to restrict the interest in Frédérique Constant watches to a limited and elitist circle of connoisseurs, but rather to open it to a broader selection of appreciative enthusiasts who want to enjoy Swiss high-quality classical watches at sensible prices. Frédérique Constant offers Accessible Luxury watches with in-house manufacture movements starting at 2000€. In-house developed, In-house manufactured, In-house assembled. We have heavily invested in our manufacture production. With our target to grow production and sales from 125K to 250K in the next 3-5 years, we will let more people enjoy luxury. This core purpose is our reason of being and the driver to live our passion.

A Frédérique Constant watch has all the attributes of a luxury timepiece, but sells for an accessible price. We realize that many potential customers cannot afford to spend 5000-20000 CHF on a watch. Especially younger people at the beginning of their career have other financial obligations. This awareness was the start of our company. Frédérique Constant strives to democratize luxury.

We aim to share our passion for fine watches and let people enjoy the pleasure of owning and experiencing beautiful and well-finished products. Our customers appreciate the quality and refinement of our watches, which make them feel good and happy. Frédérique Constant watches create memories of special moments.

Frédérique Constant watches are defined by their high quality, differentiation and precision in design and manufacture. We have a passion for designing our beautiful watches. Their perceived value — through quality of design, materials, and manufacture — is a key component of our success. Each of our watches is assembled by hand and extensively controlled with the latest equipment to ensure maximum quality. We innovate to offer creativity and exceptional value.

Case Passion Awards

Dr. William Novick, CEO and Founder of the International Children’s Heart Foundation won the 2007 Frederique Constant Passion Awards and was offered a Business Case Study by Professor Dominique Turpin of IMD Lausanne on a strategic issue of choice.

Frederique_Constant_Passion_Awards_Winner_2007-Case_IMD-5-0733_Novick

Dr William Novick, was on his way back to Memphis, Tennessee, via London, UK after an intensive week of work in Rawalpindi (Pakistan). Over the last two weeks, Novick and his team had performed 22 heart surgery operations on children with severe congenital or acquired heart defects. Exhausted but proud to have saved the lives of these children aged from 2 to 13, Novick was now relaxing on a British Airways plane bound for New York City. The long transatlantic flight enabled him to consider various challenges ahead of him for the next six months. Before boarding his flight from Islamabad to London, he had just received confirmation of his next surgery programs in Bogota (Colombia), Santiago (Dominican Republic), Kyiv (Ukraine), and Nanjing (China) spread over the next four months. He needed to finalize his medical teams to ensure smooth operating procedures in these different countries. Over the next few months, he would also need to raise more funds to finance his medical plans and to better publicize his efforts in and outside the US.

Saving Children

Back in 1991, a 12-year-old girl with a major heart problem from Lagos, Nigeria was admitted to the pediatric cardiology department of the US hospital where Novick was training. He recalled:

This little girl totally changed my life. I suddenly realized that a lot could be done to save children from the developing world with cardiac problems and with very limited access to cardio surgery facilities in their home countries.

Later, Novick joined a private practice in Orlando, Florida and another case involving a Columbian girl with a heart defect affected him drastically. At the suggestion of two colleagues, Novick traveled to Columbia to treat the child.

Novick recalled:

While traveling to several developing countries around the globe, I came to realize a number of unsolvable issues. 1% of the world’s population is born with heart disease making it the most common birth defect. Only about a third is actually diagnosed and fewer receive life-saving surgery. About 93% of the children who need operations every year do not get them. As a result, the life expectancy of these children is short, often they don’t reach adolescence…Think about this: 4.5 billion people in the world have no access to cardiologic care! More than 2 million kids are on a waiting list in China for heart surgery alone. In India, the number is close to 1.5 million and there are probably another 2.5 million in Africa, Asia and Latin America. So overall, more than 6 million kids are on the waiting list for heart surgery in emerging, transitional and third world countries. I know that the problem is not immediately solvable but it should not stop us from acting!

Many congenital heart defects can be repaired with one surgical intervention, some require staged repairs. The United States and other developed countries throughout the world have hundreds of medical centers with trained specialists to care for children with heart disease. For children who are born in developing nations, this is not the case. In these developing countries, when a baby is born with a congenital heart defect, it is often undiagnosed until the child begins to have difficulty eating, breathing, not growing, and turning blue. This is when the nightmare begins for the child and the parents. Local doctors will tell them there is no one who can help in their country. They will be told that they can send their child to London or New York or some other developed city that has trained doctors. But it costs more money than most parents would ever see in their lifetime! Imagine the anguish of parents in underdeveloped or remote regions who have no one to work this miracle on their suffering child. Imagine having no alternative to watching your child waste away and die while a simple procedure performed by skilled surgeons could save many children. The challenge is to get skilled doctors to the children in time to save them!

The International Children’s Heart Foundation (ICHF)

In 1993, William Novick decided to establish the International Children’s Heart Foundation (1), a non-profit charitable organization based in Memphis, Tennessee with the mission to serve all children irrespective of their race, religion or gender and to help children with congenital heart disease in developing countries throughout the world.

With ICHF, we also strive to educate the health care professionals in the countries we visit and bring them to the US and other countries for advanced studies so that they may better serve their own children. Our primary goal is really to make ourselves obsolete in the countries that we serve.

Our first key challenge has been and continues to be the financing of the Foundation. As Professor of Surgery and Pediatrics at the University of Tennessee Health Science Center (UTHSC) in Memphis, I was lucky to become the Endowed Professor of the Paul Nemir Jr Chair of International Child Health in October 1999. A very generous donor provided my university with a $3 million endowment of which the interest pays for my salary and allows me to take all the time away I need to travel around the world and perform surgical operations. I also found a couple of people to fund my first budget. For us, the cost of a pediatric cardiac surgery is about $2,200 per child while it would cost a minimum of $50,000 in the United States. For that price, I can send a team to Nicaragua to save 20 kids. Today, my budget is around $700,000 in cash for a year but this is nothing in comparison to the $350 million that a big US hospital such as the St Jude Children’s Research Hospital in Memphis would get annually… 75% of our funding comes from the US. Pakistan funds its own program. The Belarus government handles our local expenses and local Rotary Clubs in the Dominican Republic do the same.

[1] For more information, visit: http://www.BabyHeart.org

Passion for Sailing

It does not happen too often that one can combine business with pleasure. Sponsoring the Alpina Swan is such beautiful combination. For our Alpina brand, we operate a Swan 82 Feet FD to promote our collection of Alpina Sailing Watches. Launched in 2012, the Alpina Regatta Timer features an unique countdown mechanism enabling sailing yachts to start regattas flawlessly. Winning the 34th edition of the world famous Heineken Regatta is a strong confirmation of Alpina’s timing precision.

The Swan 82 “Alpina” is an up to date expression of the fast Maxi-cruiser concept, a modern sailing super yacht built to be fast, yet be perfectly in keeping with Swan’s traditional core values: combining speed, seaworthiness, technology and innovation to ensure exceptional performance.

On the podium to receive the First Prize

Recently, while on the helm, we managed to win the 2014 Heineken Regatta in Saint Martin. Alpina raced three regattas around St. Martin and opposite Anguilla. March 7-9, everyday saw a 26-32 nautical miles race, Alpina finished each first, giving it a solid overall first position for the entire regatta.

Sailing a Super Yacht is an intense team effort that demands perfectly timed execution of manoeuvres during a regatta. Margin of error is extremely low when winds blow 20-25 knots in hundreds of square meters sail. Loads on sheets measure up to 12000 kg. One mistake can cut-off fingers in less than a second. Arms or legs can break anytime when caught in sheets. Hence, it is all-important that the crew team works in close cooperation with clear communication. No mistakes allowed!

PETER STAS

Personal Blog Peter Stas, CEO of Frederique Constant, Alpina Watches and Ateliers de Monaco