What The CEO Of TAG Heuer Doesnít Know About The Watch Business Isnít Worth Knowing
There's much to learn from Jean-Claude Biver.
BY Richard Benson | May 11, 2017 | Feature
When explaining his many unusual theories about human life, Jean-Claude Biver, who is probably the most talented businessman currently working in the Swiss watch industry, likes to emphasise certain words and phrases. He does this by raising his voice, or banging on the surfaces of nearby objects with a flat palm and, occasionally, brandishing large pieces of cheese. Interviewing him is like trying to converse with Jacques Derrida while he helps out with the timpani on the “1812 Overture”.
“The young people of today want to make their own 21st century,” the man everyone calls Mr Biver (pronounced “Beaver”) tells me one afternoon in his office at the TAG Heuer factory in La Chaux-de-Fonds, Switzerland. “But the problem is that at the moment the 21st century does not exist [bang]. It exists in numbers—two, zero, one, six—but it doesn’t exist in behaviour. Why? Because the people that are shaping this century, the people that are guiding this century, the people that are managing this century are [massive bang] all from the 20th century. They were all born in the 20th, with the culture of the 20th, with the mentality of the 20th, with the philosophy of the 20th. They say, ‘We are living in the 21st century,’ but what did they change, on December 31, 1999? Did they change their attitude? Did they change their thinking? No! They changed [bang] nothing! This century will change when the people of the 21st century shape it!”
And when do you reckon that might be?
“2035,” he says. “Because then the power will be among the people of this century, and they do not have the mentality [bang] of the 20th. All these diseases, all this bad thinking, all these troubles…” he adds a theatrical sniff, “are 20th century, brought into the 21st. If I were a student today, I’d say, ‘Why do you leave us all your shit? Take it back!’”
Biver is universally recognised as a marketing genius who helped save his industry in its dark days of the ’70s and the ’80s, and subsequently revitalised several venerable watch brands. Now, as CEO of TAG Heuer and president of the watch division of its owner LVMH, he is charged with bringing TAG into the 21st century, a mission that may have recently brought him to your attention, even if you are not a keen horology fan. In April this year, he appeared with Peter Schmeichel on a stage at the Four Seasons Hotel in Hong Kong to announce a new deal making TAG Heuer the official timekeeper and watch brand of the English Premier League. The event introduced those new fourth-official boards that are shaped like giant Carrera watches, and new timekeeping technology that more accurately records time to be added at the end of games, and monitors referees’ fitness levels. (Since the season kicked off in August, all referees have worn TAG Heuer Connected smartwatches and during TV broadcasts, the brand’s logo is on screen.)
It was a major coup for a brand that not only has a unique sporting heritage but can justifiably claim to have helped shape modern sport as we know it. The glitziness of the announcements made the importance clear: the partnership was presented as a Big Deal (“Twenty teams, all their matches, and the most-followed football league in the world, will now be running on TAG Heuer time!”), with a simultaneous launch in London featuring Claudio Ranieri and former referee Mike Riley (the involvement of Riley, who helped develop the fitness technology, prompted wry grins among some Arsenal fans: Riley was accused of bias to Manchester United in several bad-tempered encounters with the Gunners in the Noughties, when refs seemed to routinely allow United the notorious “Fergie time” at Old Trafford). Amid all the excitement, though, Biver stole the show by unexpectedly producing an entire wheel of a Swiss cheese made from the milk of his own cows, and offering Peter Schmeichel a taste. Showmanship? More than 30 years after he first made his name with a legendarily counterintuitive bit of business thinking, Biver showed he’d still very much got it.
Born the son of a shoemaker in Luxembourg in 1949, Jean-Claude Biver moved to Switzerland with his family aged 10, and later studied for a business degree at the University of Lausanne. He is a fan of Switzerland—and its educational facilities in particular—perhaps to an extent only possible in an adopted citizen. “The biggest strength of this country is its education, which is because Switzerland, in fact, does not exist,” he says, now applying his judgements about reality to space rather than time. “What I mean is, because it’s so small [bang] and full of mountains [bang] and snow and glaciers—pfft!—it had only a few million people and no natural resources, so it had to invent [bang] a place called Switzerland [bang], and conquer the world through the brain! [Bang, bang]”
He credits Swiss ingenuity and openness to outsiders with the success of its world-spanning businesses in pharmaceuticals, engineering, confectionery, banking and horology, and with the existence of the Red Cross. If this view of Swiss business seems at odds with Harry Lime’s famous observation about the nation’s dullness (“In Switzerland they had brotherly love, they had 500 years of democracy and peace, and what did that produce? The cuckoo clock”), then his personal experience of its culture is even more so, for the teenage Biver acquired his business flair not from diligent bourgeois businessmen, but from the hippy movement and, specifically, from The Beatles.
In 1967, he was sharing student digs with various other male and female students in Lausanne, longhaired, working for the post office after classes, staying up late with booze and cigarettes to debate the meaning of life and the point of society. (Today, while his office may be Swiss tidy, there are traces of the counterculture in his distinctly smart-informal clothes: suede jacket and shoes, fine black turtleneck, shaved head). On June 25, 1967 (he remembers the date), he and his flatmates crowded around a TV set to watch The Beatles singing “All You Need is Love”, this being Britain’s contribution to Our World, the world’s
first global television link-up.
Biver was shocked. “When we heard those first lines, ‘There is nothing you can do that can’t be done/There is nothing you can sing that can’t be sung… All you need is love.’ It was, ‘wow!’ We understood that it meant hope. It meant everything is possible, provided you believe in love—not just love between two people, because love is much more than that. Love is, ‘I respect you’. Respect is an act of love. I share my experience, I share my success, I share my defeat, I share my doubts, I share my experience. Sharing is an act [bang] of [bang] love [bang]. I forgive your mistakes, because you can only grow by doing mistakes.”
It wasn’t so much about learning rules for work from The Beatles, he says, as realising that you should have the same ethics in business as you have in your personal life. “If you want to make money now, immediately, it’s easy! Go to the gas station, say, ‘Give me the money,’ take it and run away! But how long will it last, this money? Not very long. One day you end up in prison. So the only [bang] way to make money in the long term is through ethical [bang] behaviour. It’s a slow process, but it’s a strong process. And going slow, but be strong. I learned that from the hippy movement, from asking, ‘Why do we live?’ and, ‘What is my role in this life?’ We were only happy once we had found the answer, and the answer? The Beatles helped us.”
By the ’70s, his hair was trimmed but his principles and record collection had remained intact, and he was working for Frédéric Piguet, a company that manufactured the clockwork parts of watches (movements) in the Vallée de Joux. The Vallée, high in the Jura mountains 30 miles north of Geneva, is one of the two old heartlands of Swiss horology (the other being the nearby canton of Neuchâtel). Hundreds of watch and component companies—including Breguet, Patek Philippe, Jaeger-LeCoultre, Vacheron Constantin and Audemars Piguet—are based there, many of them in their original farmhouse workshops.
Biver chose the industry because the intricate workings of watches reminded him of the model trains that were his favourite toys as a child: watches, he says, have been “my adult toy”. In the ’70s, however, the atmosphere in the Vallée was not exactly playful. Swiss watchmakers had enjoyed three decades of growth after World War II, when the country’s neutrality had allowed them to focus on their real business rather than being drawn into manufacturing military equipment, like their competitors in other countries. They had about 50 percent of the post-war global market but in the late ’60s, Asian and American firms began to offer serious competition. The newcomers’ watches were cheaper and, crucially, they adopted new quartz technology, which allowed them to make inexpensive, battery-driven watches that undercut the Swiss craftsmen who stuck with traditional wound mechanisms.
It led to one of the great industrial declines of late 20th-century Europe. Family businesses were sold and taken over, investment cut, workers sacked; the Vallée, according to Biver, left “half-dead”. Between 1970 and 1983, the number of Swiss watchmakers fell from 1,600 to 600. In the half-dead valley, Biver continued to learn. At Piguet he worked with Jacques Piguet, Frédéric’s son, who ran the factory. Biver did the marketing, Piguet the production, a double-act principle fundamental to the industry, the same division having been used with Messrs Patek and Philippe, for example, and Audemars and Piguet. He moved on to Audemars, concentrating on sales and marketing, and then outside the Vallée to Omega as product developer and to run its gold watches department. It was a global company he didn’t much care for, and a job that “helped me to understand I was made not for the industry but for the artisans. My passion is the watchmakers, not the machines.”
Of course, such words are easy to say but, in 1981, Biver and Jacques Piguet put their francs where their mouths were and bought the name of Blancpain, an old company that had been severely diminished in the ’70s, from Omega and Tissot owner Société Suisse pour l’Industrie Horlogère (SSIH) for CHF22,000. At the time, it was commonly assumed the only solution to the quartz crisis was to copy the technology of the new competition: the Swiss government was convening meetings with watchmakers to work out how they could best catch up with the contemporary technology. Installed in Blancpain’s new offices in Vallée de Joux, however, Biver responded with a strategy and advertising slogan that stressed tradition and defied contemporary trends: “Since 1735, there has never been a quartz Blancpain watch,” ran the strapline across the new ads. “And there never will be.”
And, at least while Biver and Piguet owned Blancpain, there never were. It was a classic example of what some brand consultants informally refer to as zag-zigging, ie, deliberately opposing dominant market trends in order to attract attention and those consumers who wish to differentiate themselves. It also invented the strategy—upmarket, heritage-oriented—that most of the surviving Swiss watch brands would adopt as the ’80s wore on. Blancpain certainly prospered, though it was a high-risk approach.
“Everybody said, ‘It’s wrong!’ You should never say never! People in the company and jewellers and friends and journalists!” He gives me a knowing look, as if I might bear some responsibility for the media’s scepticism at the time. “When everybody talked, it was always quartz, quartz, quartz! But I said, ‘It doesn’t matter [bang]!’ I knew there was a market for that idea, because I knew people from the hippy generation would think like me! This contrary claim, contrary product, contrary attitude, it gave us an incredible visibility.”
By the late ’80s, SSIH had merged with another large company, and made its own, huge, contribution to saving the Swiss watch industry by inventing the Swatch. Now called the Swatch Group, it bought back Blancpain in 1992 for CHF60 million, retaining Biver as CEO, and giving him a place on the SSIH board. The master was then asked to develop the marketing and products for his old company Omega, which had until the ’70s vied with Rolex to be the highest-profile of all the Swiss watch brands. In the ‘70s and ‘80s, however, in the rush to adopt quartz, the brand had been neglected, with sales and prestige falling.
By the time Biver left the Swatch Group in 2003, Omega’s sales had tripled, and James Bond’s wrist had defected to it from Rolex. His big ideas here—“activating the sponsorships”, he calls it—would have lasting effects on publicity and marketing. First, when he signed up brand ambassadors such as Cindy Crawford and Michael Schumacher, he began making it a part of the deal that the celebrity would make appearances on behalf of the brand at press calls. Second, when he undertook product placement in films, he negotiated that the studio would give him footage featuring the star and product several months before the film was released. He would use this excerpt to make a short advertisement which he would show in cinemas, thus making more of the placement and providing free advertising for the movie.
This was how he got Bond, beginning in 1995 with Pierce Brosnan wearing an Omega Seamaster in GoldenEye, and the activation principle is probably why, these days, you will often see a celebrity with some sort of paid-for branding on their clothing when appearing on TV. “Before, nobody ever did a product placement and exploited it,” he says. “People were sufficiently happy to have the product in the film, but I said, ‘No, that’s only one part.’”
And early on, was it hard to persuade people of this? “No. They were open because… we paid. Ha ha ha! [Bang!] There is a price. But my theory is that in marketing, one and one makes three! You have the film, the exploitation, which are like one and one, but in the end you get a result of three. And if I put a dollar on the table and tell someone that if they put another dollar there, in the morning there will be another one, so there are three, then everybody will give me a second one [bang!] Ha ha!”
This lesson in Bivernomics is a good point at which to mention his famous cheese, described by The Economist as an example of his masterful grasp of the value of rarity. He owns a herd of cows that spends the summer grazing Alpine pastures. Their milk goes to make L’Etivaz, a hard cheese produced in regulated conditions in the village of Etivaz, near the farm where the cows are housed when not on the mountain. He makes five tonnes a year, but gives it only to family, friends and some favourite restaurants, and never accepts payment: “If I don’t sell it,” he said, “then I will decide who gets it and who doesn’t. I will be the master of my cheese until the last piece.”
One warm day in the summer, he takes Esquire out to his farmstead to try some. The farm is in mountain foothills near Montreux in the Vaud region, overlooking Lake Geneva. It is ridiculously Swiss-looking, with hens, rabbits and a couple of cows ambling about, and barns with overhanging eaves and cowbells hanging from their walls; one would not be surprised if Heidi appeared on the farmhouse steps to yodel everyone in for a fondue lunch. Biver sits down on the patio, and an assistant brings a large platter of pale yellow cheese out to us (just irregularly cut pieces on sticks, because “it’s best to eat cheese on its own, then you have the full power of the taste.”)
In cheese terms, he says, we are really in Gruyère country. L’Etivaz was created in the ’30s by purists who felt the regulations governing the production of Gruyère were too lax, allowing for an inferior product. L’Etivaz can be made only in the Alps, from Alpine milk; the milk must be heated on a wood fire only at 55 degrees, and the cheese matured for an average of nine months, with water being applied by sponges to keep it humid. Quantities are predictably small. The taste is similar to a good Gruyère, but more intense, rich and sophisticated.
Biver doesn’t do all this himself (though he does know how to milk a cow), but instead he sends the milk to a small, artisanal factory in nearby Etivaz village. This involvement with Swiss craftsmanship is the point, really. Swiss watchmaking was developed by farmers, taught by French Huguenot immigrants in the 16th century, and was for centuries a source of income for farms in the winter. (“People who are poor and have small horizons get fanatical and obsessive, and people who are like this are accurate.”) So when the TAG Heuer boss waves his cheese at Peter Schmeichel, it’s a signifier of tradition and history. “The taste,” he says of our snack, not banging out of respect to the crockery, “comes from the grass. The taste comes from all the flowers that are in the grass. So, the quality of the grass is the important thing. Milk is milk, whatever cow you take, but milk from the grass from here? Totally different.”
After leaving the Swatch Group and taking a break, Biver joined Hublot as CEO, where he increased sales five-fold, using a strategy of restricted supply, before LVMH acquired the brand in 2008. He’s still on the board at Hublot, even after December 2014 when he moved to become CEO of TAG, where a major part of his brief has been the Connected smartwatch (basically the Android answer to the Apple Watch).
TAG Heuer’s heritage is essentially about sport and innovation. Founded in St-Imier in the Jura mountains by a 20-year-old Swiss watchmaker called Edouard Heuer (it was simply “Heuer” until the ’80s), it concentrated on chronographs and timing equipment for sport, making a breakthrough in 1916 with the micrograph. The micrograph was a specialised chronograph that recorded times accurate to hundredths of a second, and transformed sport because it meant athletes, able to shave small margins from their personal bests, could now compete against their own records.
When Jack Heuer, Edouard’s greatgrandson, joined the company aged 26 in 1958, he brought a marketing vision that exploited an increasingly globalised media. Heuer, a friend of Biver’s and a legend in the industry, was a sort of Swiss blend of Don Draper and Malcolm McLaren. He worked with Hollywood stars and racing drivers, creating the iconic Carrera chronograph, named after Mexico’s great Carrera Panamericana road race of the ’50s, and helping to create a defining male image of the period: Steve McQueen in the 1971 film Le Mans wearing Heuer-badged overalls and the square-faced Heuer Monaco chronograph.
Around the same time, Heuer changed sport again with the invention of the first portable timing system capable of measuring time accurate to one-thousandth of a second. In the early ’70s, that accuracy attracted the attention of Enzo Ferrari, and as part of the deal whereby Heuer became Ferrari’s official timekeeper, Jack persuaded him to put a substantial Heuer logo on the cockpit of Ferrari’s Formula One scuderia. It was the decade that TV coverage took Formula One to an international audience and the cockpit of a Ferrari was a good place to be and from that point, Heuer went global: you can see the era recreated in Rush, the 2013 film about the rivalry between McLaren driver James Hunt and Ferrari’s Niki Lauda.
Heuer was a casualty of the Swiss watch crisis of the ’70s and ’80s, with Jack Heuer eventually ousted from his family’s company in a series of deals and share acquisitions that resulted in Techniques d’Avant Garde, or TAG—a Luxembourg-based company with subsidiaries in various industries including aviation and motorsport—purchasing a majority stake in the brand. TAG modernised the company and in 1999 sold it to LVMH for USD739 million.
There’s nothing wrong with TAG Heuer, though it has perhaps been rather lost between price ranges, not quite serious luxury, not quite the sporty, innovative, youthful brand it has been in its peak periods. This is one of the concerns for its new boss, who thinks the watches should stand for “avant garde, creativity, innovation” and “accessible luxury”, being the first choice for, say, a young entrepreneur. Part of that means having a “perceived value that is double the actual price”, and to that end, he has reduced prices by an average of eight per cent, because he feels they became too high.
Biver has also being signing up ambassadors clearly aimed at the 18–35s: so far, there have been Cristiano Ronaldo, David Guetta and basketball player Jeremy Lin watch editions, and the company’s museum currently houses a pair of branded racing overalls once worn by Cara Delevingne. Some industry observers have criticised the brand’s recent over-reliance on celebrity endorsers but Biver will have none of this: it isn’t a question of whether celebrities are “right” or “wrong”, he says but whether the choice is suitable.
“As long as ambassadors are coherent with the brand’s message, its DNA and its customer,” he said earlier this year, “I have no objection.” In other words, it only seems like crappy celebrity endorsement when the wrong celebrity gets picked.
The bigger point, he suggests, might be how smart technology will change our relationship with watches. “For all the people who have a watch because it’s a status symbol, the watch doesn’t talk to them, it talks to the others. “Look! I am discreet. Look, I am elegant. Look, I have culture. Look, I am strong. Look, I am sporty. But now, the Connected watch talks to the person wearing it [bang]. The watch tells me who is calling me [bang]. The watch tells me [bang] what my messages are. The watch tells me what is my blood pressure [bang—perhaps slightly ironic given the subject]. So, for the first time, watches are about talking to you, not talking to others. This will be a very big difference.”
Somehow we end up talking about The Beatles again (one can always end up talking about them, he believes, because “they said everything! Everything, I tell you!”). I ask him for his three favourite songs. “All You Need is Love” is first, he says, and mentions in a digression that in a few days’ time, he will be travelling to lecture on his Beatles-inspired ethical business at Cambridge University. Second comes “Help!”, because “the day you think, ‘Ah, now I don’t need help’, you are already done! Because that means you are arrogant, it means you think you know everything—and so you are close to failure.”
Finally, he names “When I’m Sixty-Four”, and half-sings a slightly wonky couple of lines: “Will you still love me, will you still feed me…” “It’s because of my wife,” he explains. “I was 64 two years ago!”
Does she still love you?
He laughs. “Yes!”
Who doesn’t? One imagines the bosses at LVMH are particularly keen. What exactly can be done with TAG Heuer remains to be seen, but do they still need him? Yeah x three.
This article was first published in the print edition of Esquire Singapore, May 2017.