What David Epstein Could Teach the Watch Industry

I first heard of David Epstein on Dave Chang's 
podcast - The Dave Chang Show.  And the fact that I first got dialed into Mr. Epstein's thoughts on the value of generalization over specialization.  I have dipped into his book - Range:  Why Generalists Triumph in a Specialized World.

Courtesy of Macmillan

And I feel it was particularly appropriate to learn about Mr. Epstein's work on a podcast that is, ostensibly, about about food and food culture.

My main takeaway from the podcast and the bits I've been able to digest directly is that not unlike Bob Dylan's message that the "the loser nowWill be later to win", the times are indeed A- Changin'.

Now for my part, I probably really got my start on the periphery, as a fan, participating on a limited basis in discussion forums.  I then stumbled into a job at Tourneau in San Francisco, and later with DOXA. A blog led to a media business which led to a consulting concern that touches on sales, marketing, media, production, and on and on.  So it's fair to say, this speaks to me.  

So gentle readers, allow me to share with you what the watch industry could learn from David Epstein -

“Overspecialization can lead to collective tragedy even when every individual separately takes the most reasonable course of action.”
David Epstein

I see this a lot in the watch business and saw it painfully so with two former darlings of the business who collapsed less than three years from their first products were delivered to the public. But it goes deeper than this and in fairness to the former Kronaby and Klokers, both of these brands were led by people with experience in consumer products. And in fact, you can see it in the brands that have been through some particularly rough waters.  GP, UN, Eterna are wonderful brands that in the past have suffered from "Silo Syndrome".  Essentially that they were staffed with a bunch of specialists who were discouraged from collaborating.  While it is tempting to tell people to "stick to their lane" when you feel the sole of a foot on your toes, it might, in fact, be worth a listen.


“We learn who we are in practice, not in theory.” 
David Epstein

What I'm about to say is going to sound mean, and it is not meant to.  It is easy to say that a leopard can't change its spots, and I think that is a gross misunderstanding that people, particularly in the watch business have.  Some of the sharpest operators in the industry also keep the lowest profile. As mentioned here before, it's inevitable to fail. The trick is not to make a habit of it.  And failure offers a wealth of lessons. Some of these lessons can be highly personal, where we need to examine how we handled various situations and how we might have done things differently. 

Put another way, words are great, mottos are great, and a good looking CV is just that.    Now, how then do we explain the serial recycling of executives, sales reps, PR firms from one brand to the next and back again?  It actually goes back to overspecialization.  What Moneyball referred to as the "look test".  In essence, only "baseball people" could understand the game and how to work within it.  And what Bill James, Billy Beane and others proved is that just wasn't so.  

And the watch business is unique in the short memories it instills in many of its gatekeepers.  People who entered the industry from others quickly forget that fact when they start running a brand.  Suddenly, only "watch people" (i.e. industry veterans) can possibly understand what it takes.  And as history will show, these folks were then cycled through and spit out of the formal industry, and those who managed to remain had to create their own opportunities.  Which either proves their own misguided theories, or shows that they were, perhaps, victims of over specialization.


“You have people walking around with all the knowledge of humanity on their phone, but they have no idea how to integrate it. We don’t train people in thinking or reasoning.”
David Epstein


I am actually pretty grateful for this, because otherwise I would not have 

clients ; )

This actually comes back to the "Silo Syndrome". Being an expert is great, but unless you can see the bigger picture, it is increasingly harder to adapt to it. As brands continue to contract in size and need to become more nimble, the ability to think outside of your cubicle becomes more and more essential.

“Almost none of the students in any major showed a consistent understanding of how to apply methods of evaluating truth they had learned in their own discipline to other areas.” 
David Epstein


See above.

“The challenge we all face is how to maintain the benefits of breadth, diverse experience, interdisciplinary thinking, and delayed concentration in a world that increasingly incentivizes, even demands, hyperspecialization” 
David Epstein


So let's talk about brand management. Typically, brand managers are promoted through the ranks of the sales department. It makes sense on a lot of levels, no sales means not brand. But even at a regional level, let's say North America, you need to have the flexibility to weigh in on all aspects of the operation. I can't tell you how many meetings I have been to where the brand manager will pass the buck by saying things like -

"Oh, that's marketing. You'll have to talk to...".

This is not to say that you should not have department heads, and people with responsibilities. But really that conversation should go more like this -

"Oh, let's (collaboratively) talk about this with the marketing team..."

What currently happens in a lot of brands is a fundamental disconnect from certain functions that they either feel uncomfortable with or are disinterested with. Say what you want about him, but Jean-Claude Biver was perhaps the first (and still one of the only) brand manager/brand leader/CEOs who made a point of involving himself beyond just sales. Towards the end of his tenure that trailed off, but there was a time where I suspect Hublot was an extension of his central nervous system.

“As each man amassed more information for his own view, each became more dogmatic, and the inadequacies in their models of the world more stark.” 
David Epstein


Too many examples to site.  


“In a wicked world, relying upon experience from a single domain is not only limiting, it can be disastrous.” 
David Epstein


It is important to have a centralized plan for a global brand.  But there needs to be an understanding of locality/reality.  Simple example - F1 is, by and large, not a thing in the US, no matter how much a brand would like it to be, it just isn't.  Neither is rugby.  If we're very honest, neither is sailing, neither is Chinese language cinema.  And yet, I keep getting press releases about partnerships like this.  

And an even starker example could be found at the SWATCH group and the ETA/COMCO fiasco. When you do not consider the possibility that things just might not go your way?  It can be fatal.

Rest assured, ETA is not going out of business, and I have no doubt that some agreement/accommodation will eventually be reached. But in the here and now, several of ETA's more well-heeled customers are having to lump it, and if the word around the campfires in the Jura are to be believed, some loyalists might be looking for a new camp to call home.

The Straight Skinny

So I wanted to take a moment to try and offer a counter opinion on some of the soothsaying and rather goofy prognostication going on out there about the state of the retail watch industry.

The watch customer has changed -
No, not in any real way other than how they buy and sell watches. There are just as many of them, but they are opting to either buy used, grey market, or in some instances go straight to the brand to get the best possible price. Sorry Mr. and Ms. Retailer, loyalty it seems is only as strong as a given retail economy.

For better or (I think) worse, the perceived customer in North America (at least if print and digital advertising is anything to go on) is predominately white, upwardly mobile, and apparently (and this one kills me) a fan of F1 racing.  I have no doubt that the marketing shot callers in Biel, Le Locle and Glashütte are also convinced that these "unicorn' customers also keep a kitchen cabinet filled with jars of Nutella.  Spoiler alert - they don't.

The reasons why people are buying expensive watches have changed -

John Goodman as Charlie Meadows in Barton Fink:
“You might say that I sell peace of mind”.

Yeah, not so much.  More often than not, the customer is coming in looking for a specific watch that they have seen, read about, or heard about... somewhere else.  And the guys out there are, more often than not, buying an expensive watch for the same reason that they bought it five years ago.  Work bonus, anniversary, birthday.  Or they are simply watch hounds.  Those realities have not changed.

The reasons why people buy expensive watches are complex and mysterious!

Trust me, it is nowhere near as difficult to understand as some folks would like you to believe.  It is a fun, shiny object.  You see it, you attach whatever psychological tie you wish, and that motivates your desire to own it.  We all latch onto brands for a variety of reasons.  I was, for quite some time, deeply impressed and obsessed with NOMOS.  And all it took was one cancelled press trip to turn me off completely ; )

This is not some super-secret society with a Kaballah-like complexity of esoterica. It's pretty simple. Make your product, promote your product, sell your product, support your customers and supporters.

The watch industry is littered with poorly conceived, over-thought ideas that bring the same outcomes that everything previously has.  

Ultimately, change is painful and scary.  And inevitably, the uncertainty that walks hand in hand with change will cause us to search for, and often create, theories that will explain the sudden disruption.  So I will close with another paraphrased reference from chef, restaurant owner and media personality David Change.  If you've ever worked in a commercial kitchen, you understand stress.  You might be familiar with the expression - "to be in the weeds".  Essentially when you are up to your neck with a million and one smaller tasks making it (seemingly) impossible for you to focus and complete any of it.  The natural, very human reaction?  Try to go faster.  

Per Mr. Chang -

Stop, take a breath, assess the situation.  Then start again.

What Jeff Ma Could Teach the Watch Industry

In fairness, a lot of what will be referencing Jeff Ma's conversation with Dave Chang on Mr. Chang's podcast - The Dave Chang Show.

There were some very interesting notions that I thought might be worth a view through the lens of the watch world. For those of you unfamiliar, and I was certainly one of them, Jeff Ma is a graduate of MIT, with a degree in Mechanical Engineering, but is best known for his research and application of analytics in gambling (casinos, etc.) and now advises business leaders and a few professional sports teams on how to better understand analytics and think more clearly about how they run the day to day of their business.

A few ideas that they discussed:

Unconscious Bias - 
This is a notion that I have dipped into when thinking about what Bill James, Billy Beane and others have called out as foolish behavior.  What Mr. Ma went into detail about was the notion that we often think in terms of narratives rather than analytic realities.  And more often than not, the narrative is, in fact, false.  Essentially, what it boils down to is a pre-existing belief about how something should be, and how our unconscious bias will prevent us from looking at things as they really are.  Now as someone who spends the majority of his waking life working for a non-profit, social justing seeking organization, I know that unconscious bias is a very familiar term used when we try to understand societal inequities. But what Mr. Ma underscores is that unconscious bias will impact pretty much everything we do - which includes business.  

So how does that apply to the watch business?
Well, my fellow members of the Fourth and Fifth Estates can confirm that more often than not, a watch brand will hire a PR firm from the same pool of 2 firms that they always hire from.  Now the interesting thing is that they will typically work with Firm A for 2 years, not renew the contract and go with Firm B for 2 years, only to come back and work with Firm A again.  In other words?  Firm C who can actually provide solid analytical data that proves their firm could be as (if not more) effective will never be considered.  The same is true with brand leaders.  All too often, the same faces keep appearing in the same roles, merely changing jerseys like a professional footballer.  The unconscious bias prevents the hiring committees from making an informed hiring decision, because they are more comfortable hiring someone who fits the pre-conceived mold of what they are looking for, rather than the best person for the job.  Ever wonder why so many brand managers in the US are, more often than not, European expats?  

Misaligned Incentives -
Brand CEOs, and brand managers are most typically focused not on "winning" or having the most successful brand in terms of quantifiable data results.  More often than not, the greater concern is that of keeping their job, remaining employed.  While there are some true alternative thinkers and practitioners out there, that willingness to try something different is going to be stifled by the misaligned incentives they are operating under.  Is it better to make fewer watches, spend less money on red carpet PR events, sell what you have and not dump the majority of your product into the grey market?  YES.  But the misaligned incentives of the big-time watch world enforce a different mentality.  Winning is no longer having a successful respected brand, it is churning as many units out the door as possible, regardless of whether or not they are legitimate sales, or the red-headed step children of the grey market.  When a group of people in a brand are operating mostly from a position of self-preservation?  Well, I think you can see how that is going to turn out.

Omission Bias -
Essentially favoring inaction over action when we fear that the action might lead to further or worse harm.  Mr. Ma shares the story of when his mother suffered a stroke, and the doctor offered two options:
1.  Do nothing, the odds were only 22% that she would  survive beyond 60 days. 
2.  Operate, remove the blood clot and pro-actively relieve pressure on the brain, which might help the brain recover more quickly.  Now obviously brain surgery is nothing to be taken lightly, but the decision to operate had a higher probability of success, if it was successful.

And it is interesting to me to consider this, because in many ways the medical realities of suffering a stroke are not that dissimilar to the watch industry as a whole right now.  Think about how the stroke metaphor applies to the industry.  The industry, as a whole, is chasing option 1 - Inaction.  The fear of really rolling up their sleeves and understanding just how things are going to work is terrifying.  What if it's a mistake?  What if you get it wrong?  What if you don't get your bonus?  Essentially, the industry is playing not to lose, rather than playing to win.  Because the foolish hope that is being clung onto, is if they wait it out, and whistle past the graveyard, things will go back to the way they once were.  But what we are now understanding with the rupture of the grey market balloon?  Things were never that great to begin with.

Michelin Stars for Watch Brands

With many of my colleagues gearing up for the salubrious back-rub known as the SIHH, I found myself reflecting once more on the notion of "watch journalism" and when we take that second word into account - journalism, does it really still exist?  When it comes to watch, luxury and fashion coverage?  Well that is where the lines seem to be constantly (and increasingly) blurred.  

Many brands seem to have "groomed" certain outlets (or perhaps it is the outlet that has groomed them?) to where the outlet has become a bit of an echo chamber for brand's PR and marketing departments.

For some outlets, it is a (sorry) brazenly clear attempt to get whatever they can from the brand in question.  For some brands?  Well, they have the budget and they play in the same pig-pen, so they simply view this as a cost of doing business.  But for the other, smaller brands?  Well it becomes harder and harder to survive.  When the self-described "Shit that Killed Elvis" online outlet demands a free watch or cash payment in exchange for a review of your product BEFORE they even agree to do the review?  Well, it becomes clear that two things are happening -

1.  The outlet is operating from a place of avarice, not information dissemination.

2.  It is highly unlikely that you will be getting any sort of honest review, because it has (to a large extent), been bought and paid for.

And yes, if you're reading this you grasping, rapacious guys and girls, I hope that you are blushing.

And as I sat thinking about all of this, I was jolted back into reality by David Chang's podcast (WHICH I HIGHLY RECOMMEND), in which he and a guest discussed the possibility of evaluating professional athletes on the same scale as the Michelin Guide and I thought if you could do it with basketball players, why not watches?

For those of you unacquainted with Bibendum's guide to fine dining, (and in all honestly I was in that group) as I now understand it, one star signifies "a very good restaurant", two stars are indicative of a restaurant with "excellent cooking that is worth a detour".  And what everyone strives for, the much vaunted three stars?  "Exceptional cuisine that is worth a special journey".  And this is not a one and done exercise, as the Michelin Guide is updated every year.

And that other interesting thing that makes the Michelin Guide so intriguing as a review model?  It's anonymous.  Only the publisher's of the guide know who their reviewers were.

Think about that for a moment or two. 

So would it be possible to set up a similar type of system?  Sure it would!  Imagine this:

1.  An independent association is set up that will liaise with both the brands and the journalists/bloggers/influencers out there.  

2.  The Association will work with an ever-evolving and changing group of reviewers.  Many of these will be well-known writers and video personalities.  But just who they are and which group was responsible for reviewing the brand's watch will be unknown.

3.  The people evaluating the watches will be recused from participating in any review of a brand with which they have any sort of relationship beyond neutral.  If they are a "friend of the brand" (which happens, and I am a "friend" of a few), if they are doing any ancillary work for the brand (ditto), they they would not participate in the review process of that particular watch.

4.  At least 3 people would participate in the review, which would be based on "real life/real world" review priorities that would be important to "real people" that might actually "really buy" a watch and "really wear" it.

5.  Each reviewer would send their feedback based on a scoring system previously set forth that would ensure a systemic process that would also ensure anonymity.  

6.  The association would then tabulate the review, provide some summary commentary, and provide the model with a score from 1 - 3 stars.  ASSUMING that the watch merited even the 1 star.  

Now here's the funny part - you could still run this as a service that can charge fees while still remaining independent.   The brands would would pay a nominal fee to participate in the review process.  That fee would cover the shipping and insurance of the watch to be shipped first to the association, then on to the reviewer, then back again.

The association could put out a large format magazine 4 times per year (to ensure a timely presentation of the review).  And they could even sell advertising because, again, there would be no way to enforce a "Pay to Play" model for reviews as they would be anonymous.

And best of all?   It would still leave room for everyone out there currently writing and broadcasting about this stuff.  It would simply offer a different perspective.

Now I can already hear:

"But contests already exist to award and recognize the best!"

Well, again, yes and no.  There are contests that a brand can pay to enter.  And the "great and good" of the watch world will fly to Switzerland, pour themselves into formal wear, and hold forth in a solemn event.  But that is not a review, is it?  It's more of a beauty pageant.