#Resilience


Patek Philippe: a few lessons on resilience

RETROSPECTIVE

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June 2020


Patek Philippe: a few lessons on resilience

Resilience. Scientifically speaking, resilience is a value (expressed in joules per cm2) used in physics to represent the resistance of a metal to shocks and breaking. It’s a pretty apt comparison when we’re talking about watchmaking. More broadly, we also use the word “resilience” to mean “ability to recover quickly from difficulties.”

T

his is a quality Patek Philippe has demonstrated many times throughout its long history, and no doubt will have reason to call upon again very soon.

2020 – Upheaval and disruption

“We must continually adapt and question our assumptions, because what was the right thing to do yesterday might not be right today!” declared Thierry Stern, President of Patek Philippe, as recently as 14 April 2020, announcing Patek Philippe’s departure from Baselworld after almost 90 years of continuous presence at the fair (since 1932).

What was “right” for almost a century clearly was no longer, because the point of fracture, the point of loss of resilience (to continue with the physics analogy), was dangerously close. The major Geneva watchmaker therefore took the risk of changing everything, leaving Basel and returning to its home territory for the major exhibition of the year (which will take place in April 2021).

This decision, made jointly with Rolex, another eminently resilient brand and a regular at Basel since 1939 – can be read as the most recent expression of the resilience that has been a key element throughout its long history. As psychologist Boris Cyrulnik, who popularised the term “resilience”, explains: “After reaching a precipice, the resilient person sets off again on a perpendicular route. He must forge a new path, while remembering where the edge of the ravine lies.”

“After reaching a precipice, the resilient person sets off again on a perpendicular route. He must forge a new path, while remembering where the edge of the ravine lies.” Boris Cyrulnik

Resilience therefore means remembering, and carving out new paths on the basis of these memories. Resilience requires boldness (not to be confused with recklessness), foresight and creativity.

We shall not elaborate here on the factual reasons behind Patek Philippe’s recent split from Baselworld, which caught everyone by surprise (you can read our take on the situation in the foregoing pages). We will simply note that resilience is a way of reacting to external adversity, an ability to adapt to change. This adaptability requires foresight and a healthy dose of courage, because clearly, forging a new path means entering unknown territory.

Adversity is something that the Swiss watch industry in general, and Patek Philippe in particular, has come to know well over the course of its lengthy existence, which can be traced back to 1839. Rather than recounting the entire history of the maison, we shall briefly touch upon a few examples of its remarkable resilience, its ability to absorb shocks and keep going, over the course of the 20th and 21st centuries. We shall begin in 1932, when the Stern family entered the scene.

The “Graves”, not yet known by that name, was featured in the Journal Suisse d'Horlogerie in 1932.
The “Graves”, not yet known by that name, was featured in the Journal Suisse d’Horlogerie in 1932.

1932 – In the midst of the Great Depression

When, in 1932, the Stern family, which ran a major dial manufacturer based in Geneva, stepped up to buy Patek Philippe, it was considered one of Switzerland’s most important watch brands, but it was in dire straits. The stock market crash of 1929 had brought it to its knees. As stated in a report to the board of directors from New York: “Autumn business, which is generally quite stable, has been almost completely paralyzed by the deep disruption caused by the crash of the New York stock exchange in October, the effects of which are being felt across all markets.” The Great Depression that followed only exacerbated the problems, given that the American market was extremely important to Patek Philippe at the time. The brand’s reputation was particularly high in the US, due largely to the delivery, two years earlier in 1927, of what was then the world’s most complicated watch, to the car manufacturer James Ward Packard.

When the Stern family took the helm of Patek Philippe, the famous Graves with its 24 complications, which was to overshadow the Packard, was almost finished. The idea of picking up a business like this in the middle of a global financial recession looks very much like a wager on resilience. The creative intuition of brothers Jean and Charles Stern, and their confidence in this “new path” turned out to be very well placed.

Alongside the spectacular prestige creations, and a considerable output of fine pocket watches, the previous management had also begun producing wristwatches, a growing fashion at the time. But they were often of lesser quality, and were generally equipped with externally sourced movements.

The new owners’ initial decisions would map out a future course that gradually enabled the brand to dig itself out of the deep rut in which it had become mired. They recruited new management, melted down hundreds of watches from old stock, created new models with sleeker lines that were more in tune with the way tastes were turning, revamped their communications, set their sights on different markets – away from the previously dominant but now stagnant United States, Brazil and Argentina – and invested in Europe. They remodelled, retooled and updated manufacturing methods, reorganised production to focus exclusively on the highest quality, brought movement production in-house, and invested massively in wristwatches, showing that they too could house the complications on which the company had built its reputation.

One watch perfectly encapsulates this new technical and aesthetic departure: the Reference 96, otherwise known as the Calatrava.

The original drawing of the Patek Philippe Calatrava Reference 96, by David Penney, and one of the earliest versions of the Reference 96, from the Patek Philippe Museum.
The original drawing of the Patek Philippe Calatrava Reference 96, by David Penney, and one of the earliest versions of the Reference 96, from the Patek Philippe Museum.

No more need be said about this watch, a daughter of resilience, an “icon among icons”. Launched in 1932, it stands to this day as the ultimate reference.

1965 – The importance of remembering

As we mentioned earlier, the resilient man must take new paths, while remembering the old ones. And that’s more or less exactly what Philippe Stern, now Honorary President of Patek Philippe, told us in a conversation with Europa Star in 2018.

Precious enamelled Dome clocks.
Precious enamelled Dome clocks.

“Around 1965 we had a hundred or so Dome clocks in stock. No one was buying them any more, but we continued to make them. Above all, it was a matter of preserving the expertise required to produce them. At the time, there was hardly anyone doing enamelling. We continued to give our enamellers work, so that their ‘secrets’ would not be lost in the mists of time. Today, we’re very happy we took that decision. And our Dome table clocks are back in the spotlight. Who would have believed that, more than fifty years ago?”

Being resilient certainly doesn’t mean jettisoning the past. Quite the opposite. “In order for a heritage to remain alive, it must be maintained. And that happens when techniques and savoir-faire are passed down from one generation of watchmakers to the next, even when it might seem that a specific technology is obsolete and no longer serves any purpose. After all, who can be sure it might not come back one day?” The current resurgence of interest in vintage timepieces gives Philippe Stern’s words a particular resonance. Many watch brands and manufacturers are now kicking themselves for having thrown away documents, plans, components and tools they deemed obsolete, thus consigning to oblivion knowledge that is now avidly sought after.

But this kind of resilience requires resources – you need to be able to invest, without any expectation of a return on that investment. This is what Patek Philippe’s aftersales department has done, keeping exhaustive stocks of every component, even the oldest, which are all painstakingly catalogued and archived. Many of them might never be used, but who can tell what the future holds?

1974 – Declaration of Independence

In 1974, Patek Philippe drafted a Declaration of Independence, which was sent out to all its retailers. “At a time when profound changes are taking place in the Swiss watch industry and also in the relationship between the retail jeweller and his main watch suppliers, we at Patek Philippe once again reaffirm our independence as a family business which neither maintains nor contemplates any links with the emerging Swiss watch industry ’concentrations’.”

Patek Philippe: a few lessons on resilience

This manifesto of independence was launched with remarkable prescience at the precise moment the Swiss watch industry was about to enter a lengthy decade of major upheavals. The big conglomerates of the time, the SSIH and ASUAG, dominated the market, which they flooded with entry-level mechanical watches. In that very year, 1974, Swiss exports reached a historical high of 84.4 million pieces. By 1983, this figure had dropped to 30.2 million. As historian Pierre-Yves Donzé explains, “In the 1960s, the Swiss watch companies had mastered mass production but, with the exception of Rolex, they had not adopted this mode of production for high-quality products. There was a dichotomy between high-end watches, whose production had not been rationalised, and low-end mass-produced time pieces. It was the fusion of these two concepts – mass production and high quality – that enabled Japanese manufacturers to gain a foothold on the global market as genuine challengers of Switzerland.” And the arrival of quartz would sweep everything before it.

In his manifesto, Philippe Stern not only reiterated his determination to remain independent; he also committed to pursuing a policy “strictly based on exclusive, high-value, hand-finished products.”

In order to achieve this, he would reorganise the entire company, rationalise it, upgrade the machinery and invest massively in the production of modern mechanical movements, while retaining the firm’s traditional values. It was a huge undertaking, and it was conducted in a very challenging climate. As he himself admits: “At the time, everyone thought the mechanical watch was dying. It was a real catastrophe, things couldn’t have been worse. And the phenomenon was global – the entire world was turning to quartz watches.”

History would finally prove him right, with the resurgence of the high-quality mechanical watch in the mid-1980s. In 1989, Patek Philippe was able to celebrate its 150 years of independence with a masterstroke. Alongside the Packard, which had been reacquired from the American Watchmakers Institute for the sum of USD 1.3 million, the company exhibited the Calibre 89, the world’s most complicated watch when it was made, with 33 complications, 24 hands and 1728 parts. This drew all eyes to a vast and acclaimed anniversary collection of grand complication wristwatches.

The Calibre 89
The Calibre 89

Resilience is also about time (the Calibre 89 spent nine years in development), and investments of manpower and financial resources. This is what the next “resilient” decision shows.

Henri and Philippe Stern in 1989
Henri and Philippe Stern in 1989

1990 – Building the future

As we said earlier, quoting Boris Cyrulnik, the resilient man “must forge a new path”. In 1989, following Patek Philippe’s 150th anniversary celebrations and the unveiling of the Calibre 89, that path opened up into an avenue. But, as Philippe Stern said at the time, there was still a risk. “Patek Philippe must not be just a brand for collectors. We are artisans, but that doesn’t mean we can’t become more professional. We must modernise, and ensure that our products are available from our retailers everywhere.”

Presentation prior to the official opening of the new Patek Philippe manufacture in Plan-les-Ouates, in Europa Star 3/1996
Presentation prior to the official opening of the new Patek Philippe manufacture in Plan-les-Ouates, in Europa Star 3/1996

On a deeper level, it was a matter of ensuring the business’s continued independence, as the 21st century beckoned. And in order to do that, they needed to build. At that time, Patek Philippe had offices and workshops spread all over the city of Geneva. A decision was taken to bring them together under one roof in a vast, completely integrated manufacture equipped with new machinery. The intention was that, by improving communication between the various departments, and allowing the finest traditional techniques to be executed in a modern way, this would result in a gradual and moderate increase in the number of pieces produced. The investment required was huge – CHF 125 million – representing an entire year’s revenues at the time.

The choice of site, in Plan-les-Ouates on the outskirts of Geneva, and its purchase, proved to be far from straightforward, and the political authorities got involved.

To celebrate the opening of its new factory, Patek Philippe presented the Gondolo, a piece inspired by designs from the 1940s. It was featured on the cover of Europa Star 2/1997, with the entrance to the manufacture in the background.
To celebrate the opening of its new factory, Patek Philippe presented the Gondolo, a piece inspired by designs from the 1940s. It was featured on the cover of Europa Star 2/1997, with the entrance to the manufacture in the background.

Nevertheless, seven years later, in 1997, the official inauguration of this 170,000 m2 facility, which at the time employed 620 employees to produce 20,000 watches a year, was considered one of the main drivers behind the revival of Swiss watchmaking. Which just goes to show that resilience can sometimes help you to get ahead.

An interview with the “Heir Without Airs” Thierry Stern, published in Europa Star in 1999.
An interview with the “Heir Without Airs” Thierry Stern, published in Europa Star in 1999.

1999 – The school of life

Resilience is also about learning, and passing on knowledge. In 1999, Europa Star met Thierry Stern, not yet 30 but destined one day to take over the reins of the family firm (he would be appointed chairman of the board of directors ten years later, in 2009). Thierry Stern took the opportunity to tell us about his career up to that point. At the time, this young man was “only” head of the Design & Creation department, and he was disarmingly straightforward and honest. Had he attended a business school? we asked him. Did he have an MBA?

He laughed. No, nothing like that. His professional journey had taken the form of an old-fashioned kind of apprenticeship, learning on the job, getting his hands dirty, immersed in the day-to-day. He was quick to acknowledge how extraordinarily lucky he was to have been born into one of the most envied places in Swiss watchmaking. But he had to show he was worthy of this exceptional destiny. “If I don’t have what it takes, I’ll stay where I am,” he admitted humbly. “They can appoint an executive director.” And isn’t that also a key to resilience? Knowing your place, and being honest about your own abilities. Clearly, his old-fashioned apprenticeship ensured he kept his feet squarely on the ground. He did a bit of everything: he began by greeting customers at the door of a shop in Germany, he delivered parcels, he took classes at the Ecole d’Horlogerie de Genève, he cleaned watches, he worked in the New York branch and visited every retailer in the United States, one by one; he supervised stocks of bracelets, straps and other supplies for the after-sales department, he worked in the case and bracelet workshops, he trained with the company craftsmen, he learned how to use the new computerised machines, he was head of marketing in the Benelux region and, back at headquarters, he rationalised and computerised the Design & Creation department.

Again, Boris Cyrulnik says it best: “If you pass on good values, the legacy will be far greater for the person receiving them than their own heredity.” In its way this “school of life”, so different from the abstract, theoretical and disconnected approach of the big international business schools, which churn out cookie-cutter graduates, gives people the ability to withstand the ill winds that regularly blow through the history of our societies and, closer to home, the history of a watch industry that is exquisitely sensitive to the smallest gusts, with courage, good sense and pragmatism.

A 2009 portait of Philippe and Thierry Stern, taken to mark the launch of the Patek Philippe Seal.
A 2009 portait of Philippe and Thierry Stern, taken to mark the launch of the Patek Philippe Seal.

2020... and beyond

In these unprecedented and violently stormy times, these are the qualities and the values on which resilience is built.

The final demonstration of planned resilience, if we can call it that, is the new building Patek Philippe has built alongside its already imposing manufacture. It’s a place intended to both accelerate research and development, and to preserve the oldest and most traditional crafts associated with watchmaking, such as enamelling. The decision was made in 2015 to make a colossal investment of around CHF 600 million, entirely self-funded (“My very last decision,” as Philippe Stern told us). It was yet another astonishingly audacious bet on the future. The watch industry will be in desperate need of bets like this in the uncertain years that lie ahead.

A limited-edition watch celebrates the new Patek Philippe manufacture building: the Calatrava Ref. 6007A-001.
A limited-edition watch celebrates the new Patek Philippe manufacture building: the Calatrava Ref. 6007A-001.

If you want to learn more about Patek Philippe and its many tribulations, you should read the excellent and monumental Patek Philippe, The Authorized Biography by Nicholas Foulkes (544 pages, 1400 illustrations, published in 2016 by Preface, an imprint of Penguin Random House.) In English, French, German, Italian, Japanese and simplified Chinese. CHF 220.- from patek.com.

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