The Optimism Bias and Watch Town - Or Why Unrealistic Goals Are Never Met

"You just don't understand the watch business".

If I had a nickel for every time a Watch Town "lifer" hit me with that statement, I'd have enough money to buy a Patek Philippe at full ask. Watch Town is not wholly unique, but since the 90s several of the Town Fathers and would be apostolates have operated in what could best be described as a reality distortion field.

Now in fairness, the leadership of watch brands has traditionally been viewed as the reward for a successful career in sales. This has shifted somewhat in recent years, as adult supervision has become more and more necessary, but by and large the shot callers are frequently operating under the overly optimistic scale of what Tali Sharot spoke about in her Ted Talk -

https://www.ted.com/talks/tali_sharot_the_optimism_bias?language=en

For those of you unfamiliar with the Optimism Bias, Wikipedia summarizes it quite neatly -

Optimism bias (or the optimistic bias) is a cognitive bias that causes someone to believe that they themselves are less likely to experience a negative event. It is also known as unrealistic optimism or comparative optimism.

Optimism bias - Wikipedia

One of the key talking points (at least to me) was the difference in perception we experience depending on our level of expectation. To paraphrase - those with high expectations tend to be happy whether they succeed or fail, because if they succeed it is because they are "amaze-balls"! Curious to relate? If they fail it is because the situation was unfair, and the outcome was beyond their control. Conversely, those with low expectations feel that it is only natural when things don't go their way, because they just weren't up to the task. If they do succeed? They got lucky and next time they probably won't.

Now one of the very revealing points Professor Sharot put out there is the disconnect optimistic people sometimes experience when things go south. Simply put, common sense would tell you that when plan A doesn't work (i.e. your expectations are not met), move on to plan B (i.e. alter your expectations and/or plan). One of the studies that Professor Sharot and her team conducted was interviewing people about their perceived likelihood of bad things happening to them. If the person had lower expectations, they would naturally set that likelihood at a higher level. If they were more optimistic they would set that at a lower level. For example:

Likelihood of contracting a dangerous illness:

Low expectations - 50%

High expectations - 10%

REALITY - (for the purposes of this example) 30%

In a follow-up session when asked the same question by a different interviewer:

Low expectations - 35%

High expectations - 11%

In other words, despite factual data staring them in the face, the (overly) optimistic person continues to cling to their unflinching belief that things are (and will be) better than they really are. 

And now we come back to what makes Watch Town tick - in the upper echelons, it is primarily driven by people with very high expectations who suffer from the negative aspects of the Optimism Bias. This is what causes brands to overspend on media and advertising, sponsored partnerships and to continue to hire exactly the same type of person who (unfortunately) did not succeed in the previous two similar posts that they had with other organizations. I  remember a conversation with a brand manager who had hired a guy who was widely regarded as the Biff Loman of the watch business. When questioned about the wisdom of this choice, the brand manager assured me that (Hell, let's call him Biff) Biff had been unlucky, people didn't support him, there was a flood, locust, famine... you get the idea. Nothing was Biff's fault, forces and fate conspired against him. Needless to say, Biff was off to pastures greener, pursuing "new" professional opportunities within 5 months.

Let me put it in a different context - if a brand experienced a 100% staff turnover in a department over a 36 month period, serious questions would be asked about the department manager and the CEO in general. So why then, gentle reader, is a similar attrition rate now the normal in the sales and senior leadership positions in Watch Town?

Now to be clear - there are some amazing success stories in both sales and the big chair in the watch business. But they are becoming more the exception rather than the norm. Perhaps it is time for the Town Fathers of Watch Town to reexamine their Optimism Bias and set a more achievable set of goals.

Repeat - Yogi Berra on Brand Management

I originally came out with this just over three years ago.  At that time I was in Malmo, Sweden for the launch of Kronaby.  After a fairly successful launch, followed by a strong BaselWorld 17, and  a BaselWorld 18 that was off the chain (the booth was jam-packed and I saw someone in front of the booth with with a can of grease and a crowbar trying to get more people in), shortly prior to BaselWorld 2019, word leaked out that Kronaby was, in fact, toast.  Now it's funny looking back, because at the time I was somehow thinking that maybe the folks at Kronaby (and let's say that's the four shot-callers and a few key employees that, in hindsight, never should have been anywhere near a watch brand), might be approaching things differently.  Shortly after launch, it began to become clear that, in fact, that was not the case.  Just prior to their first full-on BaselWorld (I'm talking about a week prior) the brain trust in the marketing department thought it made sense to cancel a large chunk of media appointments that had already been booked.  The result, a lot of press took that particular fuck-you at face value and not only didn't bother to re-schedule, but wrote Kronaby out of their collective consciousness.  Ironically, that BaselWorld found all four of the shot-callers hanging out in front of their booth, not unlike used car salesmen prowling the lot, looking for a possible mark.  Curious to relate, the next year was quite good, with people literally spilling out of the booth!  So what happened?  Well, a few things and some that parallel another fairly spectacular fall from grace, Klokers.  And if and when I am asked to deliver a Ted Talk I will endeavor to boil it down to ten minutes or so ; )

But for now, it seems like a good time to re-heat this one!

Yogi Berra on Brand Management

A late night (in Malmo) Face Time call came in waking me from a peaceful slumber.  Clearly I need to figure out some sort of "out of office" message for that when I am out of the country ; )

Worrying that it could be Wendy and there might be something important, I picked up.  At first, relief as it was not Wendy but a fairly senior fellow who works for a company in Switzerland that produces, markets and sells watches.  We had not spoken in 11 months and he was unaware that I had moved to Salem, MA and was no longer in California (and clearly he did not know I was in Sweden).  This turned into the semi-annual call where X (no names, so don't ask!) was on his latest talent hunt.  It generally starts out with some pleasantries:

X:  "How's Mary?"
Me: "Who is Mary?"
X:  "Your wife!"
Me:  "Well, that's news to me as I've been calling her Wendy since 1992."

So let's just say that X's memory is not razor-sharp, and therefore it is safe to say, he's not so good on every detail ; )

X:  "We're looking for a brand manager for  (no names).  Any suggestions?"
Me:  "What happened to (no names)?  You were so sure they were perfect."
X:  "Well, it turns out that (no names) was not a good manager."

And then X split open like an over-stuffed piñata.  And out it flowed.  X shared all of the problems and I listened.  And to quote that other great commentator on the luxury industry, Yogi Berra:

It's like deja-vu, all over again.
Read more at: https://www.brainyquote.com/quotes/authors/y/yogi_berra.html

"It's like de-javu, all over again."

You see, X and I have a very similar conversation approximately every 18 months.  It is not always exactly the same date, but generally tends to fall between the close of the year and JCK.
And every 18 months I tend to ask the same thing:
"Why do you keep hiring the same type of person and expect different results?"
Long time readers will know that Moneyball is my default reference, and I even gave a copy to X as a gift a year or so back.  I don't think he ever read it and it's pages were probably used to start a fire in his swanky ski chalet.  So I thought I would dumb it down in the hopes that he might get it this time.  So without further delay, here's some hiring advice from Yogi Berra himself -

"We made too many wrong mistakes"
As an English teacher, I realize that this sentence makes no sense.  But look a little deeper and you will find a kernel of wisdom.  Essentially it reminds me of the anxiety and fear of looking foolish that compels recruiters, hiring managers and even CEOs to go with the same type of candidate again and again.  Simply put, the belief when hiring a brand manager in North America (I honestly can't speak to the other countries) is that they (usually he) must be a sales person.  Now, in and of itself this is good because, you know, you need to sell watches.  But there are several other elements that oftentimes get overlooked:
Management/coaching/mentoring.  Sales is, by its very nature, a fairly solitary pursuit.  While sales people get managed, it is very seldom that they have been called upon to manage the diverse group of personalities that typically make up a brand's office.
PR/Marketing/Media.  Again, frequently a lack of understanding of ROI vs. money actually spent.  If brand managers had a better understanding of this, then certain magazines and "influencers" would probably stop attending BaselWorld as the gravy train would clearly be shut down.  In addition, certain brands would not be the watch world equivalent of "Christmas/Easters" (i.e. people who only go to church two days a year).  Some of us call them Basel/Vegas.  You will only hear from these folks just prior to these two events.
Customer Service. Again, dealing with angry customers is an alien experience for a lot of these folks.

There are some people who, if they don't already know, you can't tell 'em.
Simply put, X, and plenty of other shot-callers in the industry just can't bring themselves to believe that there might be a different way to approach things.  As a friend of mine who works behind the scenes as a very in-demand consultant in Switzerland put it -
"these guys at Richemont, Swatch, and a lot of the others?  They're like trains running on the tracks.  They only move one way, and that's because the 'station master' (i.e. senior management) is following the same schedule they always have.  Which works great in normal times, but quite differently in a heavy snow storm".  And that snow storm started a few years ago and is still screwing up traffic ; )  Perhaps it is time to invest in an alternative "vehicle"?
Now X will probably go out and hire another big group loyalist who is expecting a base salary of 6 figures, business class travel, and a very deep marketing budget.

X:  "But they worked for Cartier for 20 years!"
Me: "So they are still with Cartier?"
X:  "No, but they were there from 92 - 2012."
Me: "So, essentially you are telling me that they have not worked for 4 - 5 years?"

At the risk of sounding mean, there is usually a reason why these people are available.

Nobody goes there anymore.  It's too crowded.
At the risk of sounding crass, X has a boner for big name, fancy retail partners.  The logic being that If you are in "so and so's" store in Las Vegas, LA or New York you will have made it big.  Sounds good, but the realities are something very, very different.  Those stores will most likely be MEMO. (Our old friend of the watch retailer meaning the brand provides the watches and waits for them to sell, and then maybe the retail partner will pay for them.  Then again, maybe not.)  So essentially the brand is acting as the bank, as well as the "supplier".  And if you think that is the only expense, consider the travel to visit the retail partner to do the safe count, the money that will be demanded for co-op advertising, the POS collateral materials that the retailer needs.  In other words, a shit-ton of money that the brand will be putting out there without any confirmed sale in sight.  And once the brand is in the store, they are fighting for case space, because frankly there are just too many brands.

So my strong advice for X after a few hours of sleep is this -
If you come to a fork in the road, take it. 
This is a perfect opportunity to consider a different approach.  There are plenty of talented people (some of them are even female) who despite not being solo artist salesmen might have exactly the talents and more importantly, the temperament to steer the Good Ship Watch Brand through the stormy seas of North America.

Or, you can go ahead do the same thing again, hoping for a different outcome -
Even Napoleon had his Watergate.

There are some people who, if they don't already know, you can't tell 'em.
Read more at: https://www.brainyquote.com/quotes/authors/y/yogi_berra_2.html

It's like deja-vu, all over again.
Read more at: https://www.brainyquote.com/quotes/authors/y/yogi_berra.html

It's like deja-vu, all over again.
Read more at: https://www.brainyquote.com/quotes/authors/y/yogi_berra.html