Staying True to Values: Interview With Carl Elsener Jr, Victorinox CEO
Possibly no single product on the market symbolizes durability and dependability better than the Swiss Army knife. In 1884, Karl Elsener and his mother, Victoria, produced the first foldable knives sold to the Swiss Army. Since then, Victorinox—now run the fourth generation of Elseners—has been producing the iconic tools. They also produce other cutlery, plus quality watches, travel gear, clothes, and even fragrances.
Epoch Times sat down with Carl Elsener Jr., current CEO of Victorinox, to talk about his family’s values and how those values have kept the company successful for over 130 years.
EPOCH TIMES: Can you tell us about yourself?
CARL ELSENER JR: My great grandfather started the business in 1884. My brothers and sisters, we are now the fourth generation who are responsible for our global brand. I started to work in the company in 1978, so in two years, I will celebrate 40 years at Victorinox.
I had the privilege to work with my father for 34 years. We were together. And I think, not only for me but for all our employees, he has always been a wonderful role model. And everything, all the values that were important to him, he always made these values aware to our people and he lived these values in his daily work. And also for my brothers and sisters, these company values are an important reason for the success of our company.
We have four pillars, and the value, the culture of our company is the fifth pillar. When I worked with my father, he very often told me, “A company that wants to stay successful for the long term needs to focus on four pillars: on your employees, on your customers, on your product, and on your brand.”
He told me if you put all your energy and passion to make sure that your people are proud to work for your company and your brand, and work with passion, if you make sure that your customers are always satisfied with your produce and with your customer service, and if you make sure that all your products are of highest quality and functionality, they work and are reliable when your customers need them. And if you continuously work on your brand and make it strong and more popular, not much can go wrong—if you do these four things right.
How we work together in the big Victorinox family is heavily influenced by the values that were already very important for the founder of our company. One value is openness, that we are open with each other, and when there is a challenge or a problem, we put it on the table, discuss it openly and look together for a solution. And mutual trust and respect is very important.
Also gratefulness: For our family, it’s important that all our people who work in the factory for our company, for our brand, that they know they play an important role for the success of the company. Everybody, doesn’t matter what he’s doing, where he’s doing his job, he plays an important role for the success. We want to be grateful towards our employees, but we ask our employees to also appreciate what everybody does for the company, everybody supports and helps each other. We are grateful not only to our customers, but also to our suppliers. To everybody who contributes to our success.
Besides gratefulness, also a kind of modesty. I think, when you are successful, you need to try and work hard to stay grounded. And always remember, it’s not you or a few people who made the success. There are many different teams who are responsible and they need to work together. And you have been probably reading the history of our company, and there you see, also courage is important.
As a company, you need to take risks, but you should always very carefully balance and think, what happens if my investment don’t give the return I hope them to do? Sometimes you invest in a new product, it’s a flop. And you should always think what happens if it is a flop, or if the result is not what I wish to be. And in such a case, the long term development of the company must not be jeopardized. So you should take a risk only if you can, if you are prepared for a result which is not as good as you hope.
And then the last value is responsibility. As a company, we want to take responsibility in our society, by creating and maintaining workplaces. And by taking responsibility for the environment. So we try very hard in our manufacturing, in our process, to use environmentally friendly processes and materials, and our employees, our family, we were very proud and very motivated, and a few years ago, received the Swiss national environmental award for our system. We try really to be very responsible.
For example, in 1980, we developed the Swiss system that we can use the energy that is created by the manufacturing to heat the factory, and in addition, 120 apartments that are connected with our company. We ourselves created the system that we can recycle all the steel, during the grinding and polishing, you have steel dust, and we can collect this dust, recycle it, and give it back to the steel manufacturer.
So every year, we have about 600 tonnes of steel, thanks to the system which we have developed internally. And when you look at the Swiss Army Knife, most parts of the Swiss Army Knife are steel, stainless steel, and aluminium separators. And of this raw material which we buy, 95 percent is of recycled steel and recycled aluminium.
EPOCH TIMES: Can you share one or two stories that your father influenced on your work ethic and business philosophy? How does he take risks and courage doing the right thing?
MR. ELSENER: My father, very often during the history of our company, started to invest in a new building, in new manufacturing, during recession times. And this is something which already his grandfather had done. In good times, he built reserves that helped him go more easily through difficult times. Many companies, in a boom time, they invest and increase sales, and maybe they take loans from banks, and then when there is a difficult time, business goes down, the bank asks for repayments, and everything becomes very challenging. They start to reduce the workforce.
For my father, it was always very important to build reserves in good times to help you to go through difficult times. He always invested “anti-cycle,” that means, he built reserves in the good times and then when there was a recession, like for example the very big challenge after 9/11, when sales of the Swiss Army Knife dropped by more than 30 percent. So in difficult times, like after 9/11, we invest in new products, in marketing and promotion, and in the development of new markets to balance the economical cycle.
When you look at the history of world economics, it was always like this. Always! And in the future, it always will be like this. It will never go only up. It will never go only down. It will go up and down and up and down. So in the good times, you have to prepare for the difficult times.
We are influenced heavily by Christian values, and in the Bible you already read that in the seven good years, you have to fill the buildings with corn, so you can live from this in the seven difficult years.
EPOCH TIMES: These are great timeless values and it does take courage to stay true to those values. Because in the modern days, a lot of those traditional values and Christian values have been lost. How do you take the decisions to remain true to those values?
MR. ELSENER: I think, a big challenge of today’s world, is a little bit, the fact of exaggeration. For example, we all know, shareholder value, short term profit. And we ourselves we have experience with these values, because in the United States, which is our most important market, we had a partner and we started to experience that they came under the pressure of short term profit and shareholder value, which are good things, if you do not exaggerate them.
But as soon as you exaggerate from a positive to a less positive, we were confronted with the not-so-nice part of the exaggeration. This company, before it was on the stock market, it was a fair and two-way partnership. Then after 9/11, they came under the pressure of shareholder value and short term profit, and it became very difficult for us to talk with them, a long term strategy, and to be fair partners.
I give you just a little example. Before they were on the stock market, the dollar went down, and my father offered them a currency discount, to help them not to need to raise prices too quick or too much, because my father hoped the dollar would recover and then he could reduce the currency discount, and this happened several times.
When this company was on the stock market, the dollar went further down, my father granted a currency discount, and when the dollar improved, he wanted to reduce the currency discount. And then, instead of agreeing like in the past, we received a letter from a lawyer saying the shareholders do not agree. Then of course we started to buy shares and when we had more than 30 percent, we made a public offering. We could then take the company off the stock market and put in our own people. So all these experiences have motivated us really to focus on our long term strategy.
We as a family, we do not think in quarters. We think in generations.
There have been three generations before me, and I hope there will be many more generations after our generation. So we think long term. And if you think long term, you have to make sure that your strategy is long term, that you do not make decisions from short term profits, which may have a negative impact on your long term development. You can sometimes make sales very quick, but this could damage the perception of your brand, image of your brand.
EPOCH TIMES: Coming from America, a lot of companies feel the pressure from shareholders, and these companies are often short lived, because you can feel the immediate impact on people.
MR. ELSENER: Yes, they hire and fire easily.
EPOCH TIMES: And they create a lot of difficulty for families. Before you walked in, she shared that you worked with your father for many years. That is so beautiful. Because when you lay off people, it creates disruption for the family.
MR. ELSENER: This had been very important for my grandfather, for my father, and also today, for our family. It’s important that we can have a very much, a stability with our workforce, that we are never forced to dismiss people, because the business does not go so well.
After 9/11, sales of the Swiss Army knife dropped by more than 30 percent. And we were able, thanks to our long term strategy, thanks to our reserves, to keep all employees. We did not dismiss one person for economic reason. It was a very difficult time.
My father told me, in his life he has been with Victorinox for 74 years, and this was the most challenging time for him. Because he likes all our employees and they did like him very much. There was a lot of mutual trust and respect, and he wanted to keep them all. And we managed, thanks to the reserves, thanks that our employees also contributed, they were prepared.
For example, those people who worked shifts, they were prepared to reduce their shift hours by 15 minutes. This helped. But also, our employees had a lot of hours, which they had worked over time. Because before 9/11, we had big orders and we would have had to hire new people, but we were always a little careful before we hired new people, so we asked our people to work overtime. We told them, if the economy is a little weaker, you can take overtime, and you can take holidays, or whatever. So after 9/11, we asked them to take the overtime, to also spend their holidays, because we did not have enough work.
And our head of personnel also became very creative. He went to other companies in the neighborhood and asked them whether they had a big order for which they needed temporary support. And some of our people, they came in the morning here, we brought them with a small bus to these companies, and they worked there. They got their salary from us, and we wrote an invoice to these companies. With all these different things, we managed to keep everybody.
For these employees, it was a very nice experience to work somewhere else. They shared with us their experience and after these four or six months, they came happily back and could stay with Victorinox.
EPOCH TIMES: Wow, this is amazing story.
MR. ELSENER: It is. You can imagine after 9/11, our people really experienced that it is not just written on paper that the workplace is important for us. They have experienced that we do everything possible. They know, our people are aware, they know we cannot guarantee them our job, but they know that we do everything possible, that as one big family, we do not only go through good times together, but also through the difficult times together.
EPOCH TIMES: And it’s during the difficult times that you earn people’s greatest trust.
MR. ELSENER: Yes, it has created a lot of mutual trust and respect. And they have also experienced it’s not only from our side, it was also from their side.
EPOCH TIMES: How would you like people in the future, in the future generations, to remember your brand, and the value your brand stands for?
MR. ELSENER: For our family, it is important that our brand is perceived as a brand that takes responsibility in our society. By creating jobs, maintaining jobs, by being responsible to nature, by manufacturing high quality products that are functional, reliable for our customers, and that we are one big family. One big team that stays together and goes together through good and difficult times.
EPOCH TIMES: The fact that your company is able to do that, the reason must be the strong family values. How would you like to carry this family tradition in your lifetime?
MR. ELSENER: I think one of the strongest, maybe I can say, truths in management is what my father did in a wonderful way—to set the example. When you lead the company, when you manage your family, you need to lead by example. Your children, if you do what you ask your children to do, it’s much easier for them because you set the example.
My father, his father, they did lead by setting the example, living the example. And for me, it is important that my brother, and myself, we also continued to live these values that made our company strong, and successful. Always for the future. That the next generations understand the importance of these values. And that they are proud and motivated to continue.
I personally, I’m not heavily motivated by big profits and big sales. The biggest, strongest motivation I get when I walk through our factory, and I see that our people enjoy their work, are proud to work for this brand, this gives me a lot of motivation. And when I’m in the office and I open my mail, and I receive a letter from a customer, and he writes, how happy he is about the quality of our product, when I read a letter that somebody writes, your product is not just a knife, it’s a companion in my life–this makes me proud and motivates me.
EPOCH TIMES: As the CEO, what is your typical day?
MR. ELSENER: It’s everything. I travel because we are in 11 countries, we have our own subsidiaries, so I need to travel, visit them, to make sure that they also understand and get to meet me, and see how I try to live the values. For example, next week I will travel to the United States, and I will visit our team there, together with my wife who is responsible for global brands. She will join me, also our daughter will join us.
I also like to spend time in the factory, that the people in the factory see me. Also I spend a lot of time with visitors, customers who visit us. Yesterday, we had some of our partners, one from Israel, from Japan, so they visit here and I always like to be there and show them appreciation. Because teamwork, we need the partnership. They are the ones who make it happen.
EPOCH TIMES: In America, maybe you have heard about this. The CEO and CMO are the shortest lived jobs. Because they’re given two years to improve, if they fail, they’re out. This is why people are forced to make short term decisions that have a negative impact.
MR. ELSENER: Here in Ibach, we have 45 people who have worked at Victorinox for 50 years. We have 110 people who celebrated 40 years with Victorinox.
EPOCH TIMES: How do you celebrate?
MR. ELSENER: This year, I think we have close to 60 people who have either the 25th, 40th, or 50th anniversary. And we always, every two or three weeks, have a celebration and we always take between three and six people together. And we have our break room, where every department puts a wall for the employee of their department, then you see, 25 years, 40 or 50 years, and then they put some personal gifts.
They also receive a gift from Victorinox. And either they can choose to have one month holiday, or one month paid salary, for 25 years. For 40 years, it’s one and a half months, and for 50 years, it’s two months. And then we have our own company music. And they play the music, and then most of the people of the factory come by and congratulate all these people.
EPOCH TIMES: Thank you so much.