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.

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.