Cancelling your own most popular, successful product? That will be Patek Philippe…

Perhaps it may only be something that a family business could do, but this piece in Spear’s with the current CEO (and 4th generation of the family) of Patek Philippe about a decision to stop production of their most popular (if not most iconic) watch is, at its heart, a fascinating insight into the approach of a family business. 

Likening the company structure to “like a monarchy, with ruling responsibilities handed down from father to son” may not be the way everyone would describe the business or even considered a usual approach for a business, but in a family business (as we increasingly see) future generations can be, and are being, trained for their future roles in the business. 

And the interesting piece in this article I find is that I ponder whether any business other than one owned as a family business without multiple outside stakeholders and investors would have made the decision to stop production of such a popular item, but also I am struck by the fact that there is no reference or reflection on the cash cost to the business in making this decision. This strikes me as being a decision that is made on that wider view of the business as being a steward of the business for the long term and not for purely financial return. (Alternatively, one might think that there is sufficient demand and sufficient profit being made for them to be able to take such a decision and gain the additional free marketing exposure).

The other really interesting point I take away from this insight in to the approach of the family is the statement that “finding somebody who has the DNA of the brand, the vision for it – there’s no school for that.” Perhaps that is what often marks out family businesses from those that “merely” recruit top talent and develop them and turn them into excellent staff and leaders of the future, but that to have the DNA of a company perhaps you need the DNA of the family that has owned it for generations? 

At the heart of decision-making today, says Stern, is a deep understanding of the company and its traditions that can only come from within, and a sense of long-term responsibility handed down, like both the watches and the knowledge to make them, from generation to generation.

https://spearswms.com/patek-philippe-under-thierry-stern/
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