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Timeless Lessons

It is with some hesitation that I write this article, mostly because I am exposing myself to some self-indulgence on a topic that may be of little interest to the masses. However, while reflecting on today’s business environment an important lesson came to mind from my longstanding interest in horology (anything related to timekeeping and timepieces), so I hope you’ll humour a bit of geekism. Here it goes!

If permanence had a sound, it would be a steady, mechanical tick.

When I was a high school student in Japan, I found myself very curious about wrist watches, particularly those made by Seiko.  In 1978, my grade eleven year, I bought a watch with my entire summer savings.  It was a Seiko “Kakume” (which means ‘square eyes’ in Japanese) chronometer, referring to a watch with a stop-watch complication.  Since then, I have had an on-again, off-again curiosity with all things mechanical watches.

For a couple of years, I admit I wore an Apple Watch. More recently, I’ve come to the realization that I am happier NOT being told how my sleep was, when messages arrive, or when to stand up!  Something about my trusty mechanical watches make me happy – like having a “little buddy” accompany me wherever I go.  It also gives me satisfaction that, unlike my Apple Watch, my wristwatch was not built with a planned obsolescence date.  My watches will be fine even after they get passed down a generation or two.  I think this sentiment is best captured in Patek Philippe’s tagline, “You never actually own a Patek Philippe. You merely look after it for the next generation”.

Lessons from Zenith: adapt to survive, but remember your identity.

In today’s climate of constant shifts and uncertainty, where we see business paradigms change every time we see the news, there is a powerful lesson to draw from horology: pivots are essential, but abandoning what made you great can be fatal.  

I can find no better illustration than the story of Zenith and its legendary chronograph movement, the El  Primero.

Vintage 1969 Zenith El Primero
Vintage 1969 Zenith El Primero

Founded in 1865 in Switzerland, Zenith built its reputation on excellence, racking up more
precision awards than any other watchmaker in the mid 20th century. In 1969, they unveiled the
El Primero — the first high-frequency automatic chronograph, powered by a movement by the
same name. It was the first commercially available movement with a very high vibration rate of
36,000 per hour.

Even today, there are only two companies making commercially successful movements with 36,000
vibrations per hour (and the other is ironically Grand Seiko), which results in higher levels of accuracy.
This vibration rate creates the ability of the chronograph to measure each second in 10 intervals,
which is important for people with geekism!

Industry has a way of evolving — for better or worse.

Why is it ironic that Zenith and Grand Seiko are the only two commercially successful high frequency movement makers?  On Christmas Day in 1969, Seiko launched the first quartz watch, which ended up smacking the Swiss luxury watch industry into crisis. Today, this period is called, “the quartz crisis.” In a jarring manner, battery-powered Seikos were cheaper, more accurate, and easier to produce.

Ultimately in 1975, under extreme financial pressure, Zenith’s management decided to shut down mechanical movement production and scrap the tooling for the El Primero movement.

The irony lies in the fact that Seiko nearly killed the entire Swiss watchmaking industry with the quartz movement, but today only Seiko and Zenith produce mechanical movements with the very high vibration rates of 36,000 at scale.  They remain unique in watchmaking for this level of fidelity.

Here’s where resilience redefined history: Charles Vermot, a veteran watchmaker at Zenith, secretly preserved the tooling and technical plans by hiding them in the factory attic. At a time when quartz was king, he kept the spirit of mechanical excellence alive.

Without discounting progress, I note that the world is like this; there are always backtracks. You are wrong to believe in the total stoppage of the automatic mechanical chronograph as well. I am convinced that one day our company will be able to benefit from the fads and fashions that the world has always known. – Charles Vermot 

For those of you afflicted and romanticized by watches, you will know the allure of mechanical movements.  I can’t fully explain why we find them so alluring, but it’s not about accuracy or function; our phones do that much better. It’s about an ingenious wonder that ticks away like it’s alive, and can tell the time, date, and measure specific events, from a lap at the track or the baking time of your bread – all fuelled by the simple movement of your wrist.  The 278 individual parts that make up an El Primero movement represent about the same number of parts as an internal combustion engine, but they exist inside the case of our tiny watches.

 

Rolex
Rolex “Zenith” Daytona Circa 1993

Much faster than expected, mechanical watches regained their popularity. By the late 1980s, Rolex was seeking a better chronograph movement; they reached out to Zenith. Thanks to the foresight of Charles Vermot, Zenith’s El Primero tooling was ready and waiting (after uncovering them from where they were hidden). From 1988 to 2000, Rolex used the El Primero to power the iconic Daytona series — the watch that would define racing chronographs, and to some extent, Rolex itself. This collaboration wasn’t just a stopgap, it elevated Zenith’s creation to world-class status. Today, the “Zenith Daytonas” remain among the most collectible pieces.  I have personally owned two of these Zenith Daytonas that were purchased more than 30 years ago. How I wish I would have NOT sold them!

Today, Zenith continues to thrive under the LVMH umbrella. Oh yes, if you wish to have the iconic El Primero on your wrist, you can have one for $14,700 new, or for a bit less pre-owned. As for the Rolex Daytona, you will not find them in any retail store worldwide simply because the demand dwarfs the supply.

Agility may win the quarter, but differentiation wins the decade.

In business and horology, temporary trends may dominate for a time, but what truly endures is excellence. The El Primero story demonstrates that we should be prepared for when market tides change. The unique capabilities we’ve learned are invaluable assets for future opportunities.

Today’s business landscape may prioritize agility and market responsiveness, but these should not come at the expense of what got us here in the first place. Like Zenith’s tools tucked away in that attic, core competencies must be preserved. They’re the foundation upon which true resilience is built and the ticket for gaining from the turn-around in our futures.  Does this important lesson apply to Mission Group? Yes, it does!