Frédéric Arnault, TAG Heuer CEO

TAG Heuer has had some well-known leaders over its 185 years. In fact, the model is outlined by the period of Jack Heuer, who developed and launched many of the collections which might be emblematic of the model as we speak. This century alone has seen TAG Heuer below the management of business legends reminiscent of Jean-Christophe Babin (now of Bulgari), Jean-Claude Biver (no introduction vital) and Stephane Bianchi (now head of LVMH Watch and Jewelry).

As we speak, the model is the area of one other well-known identify, Arnault. CEO Frédéric Arnault is probably finest generally known as the son of LVMH supremo Bernard Arnault, one of many world’s richest folks (some say the richest, relying on how Elon Musk is tweeting) and undoubtedly Europe’s richest man. That’s in fact unfair, and we carry it up now simply to get it out of the way in which. Simply utilizing the surname Arnault in an LVMH-related story may have you pondering instantly of the senior Arnault, so there isn’t a avoiding it. In our dialog with Frédéric Arnault, we didn’t focus on his household — aside from one particular point out, associated to his first watch — and the usual publicity strictures across the younger CEO (he’s 28) preclude any private questions. This isn’t uncommon, in itself, as a result of loads of CEOs don’t put themselves on the centre of their model’s narratives.

We lastly managed to get some face time with Arnault in Singapore when he was on the town for the Singapore Grand Prix this 12 months, and we had been excited. The timing was not ultimate, given the size of time between the interview and publication. With that in thoughts, it was determined to attempt a unique format for this story, provided that we now have by no means spoken with Arnault beforehand, in any capability. This isn’t to say that he’s a cipher or something, though he’s extra reserved than anticipated for a CEO. Actually, the distinction between himself and different extra established figures at TAG Heuer is a powerful one. Whereas we might have used this story within the Legacy challenge, it appeared a greater match for our customary Festive challenge as a substitute. Now we have had a deluge of interviews within the second half of this 12 months, ensuing within the largest interview part we now have run since 2016, and we’re managing all this by publishing in chronological order.

Again on Observe

Carrera x Porsche RS 2.7 steel

So far as the story of the Arnault household and their ties to TAG Heuer go, bringing this up in relation to Frédéric Arnault’s high job is especially unfair for plenty of causes. Initially, on the advertising and marketing facet of issues, TAG Heuer trustworthy will keep in mind Frédéric Arnault as the person who lastly made the Carrera connection between Porsche and TAG Heuer official. Biver didn’t try this, and never even Jack managed it. Frédéric Arnault did, however first he needed to pivot the model away from soccer, or soccer, and again to motorsports, in a transfer that many — inside TAG Heuer and amongst watch lovers too — had been unconvinced by, initially.

“Individuals had been saying, ‘Oh, motorsports, it’s not what it was; it’s not as thrilling; it doesn’t appeal to a younger crowd… Are you actually positive you need to reinvest closely in that course?’ And there’s like all this sustainability points (related with motorsports), however I had the assumption that that was proper for the model, and that’s the place we must be robust. That’s the place we would have liked to additionally dominate within the business as being the watch model most carefully linked with this world. So, in fact it was motor racing for us.”

It was a daring transfer, even when it felt like a return to custom as a result of the soccer connection was solely in its nascent part, or beta part as Arnault says, and he notes that it was a significant funding. In any case, TAG Heuer is again in Components 1 now, and climbed to the highest of the rostrum in its partnership with reigning world champions Crimson Bull Racing. The profitable Porsche connection adopted, nevertheless it was not the case that Arnault might simply experience on each his well-known identify and that of the model he commanded. In accordance with varied sources, together with the wonderful New York Occasions article by Vanessa Freidman referenced closely for this story, Arnault achieved this by making chilly calls and being tenacious.

Digital Renaissance

TAG Heuer Related watch

“He writes a letter to the chairman and will get no reply,” Bianchi advised the New York Occasions. “He writes to the VP for advertising and marketing: no reply. He invitations them to see the corporate. He had three or 4 refusals earlier than they even agreed to return and hear.”

“So the administration, and the household as effectively as a result of you already know it’s a family-owned enterprise, noticed the historic connection,” stated Arnault. “They noticed the imaginative and prescient we now have for the model, and so they wished to be a part of it. For now, it’s doing very effectively for us.” It appeared to line up completely, what with Porsche nearly sure at one level to re-join Components 1 with none apart from Crimson Bull Racing. Occasions have put paid to that plan, however the mud has not but settled.

Arnault can also be the architect behind the digital renaissance at TAG Heuer. It’s no small feat that TAG Heuer stays the main Swiss participant within the smartwatch recreation, giving fellow LVMH manufacturers reminiscent of Louis Vuitton and Hublot a leg up on this space.

“Now we have a imaginative and prescient and technique that’s completely different from our watch opponents as a result of we determined to speculate closely, and construct (the Related Watch) as a pillar. Of the watch manufacturers, we now have legitimacy as a result of avant-garde is a part of our identify [this was in response to our suggestion about the meaning behind TAG – Ed] therefore innovation as effectively…additionally due to our relationship with the worlds of sports activities, well being and wellness. This has all the time been so essential for TAG Heuer, and can also be one of many key options on the Related Watch. Our values (thus) permit us to make it work higher than different manufacturers.”

Rising Up Arnault

It’s this improvement of smartwatches that appears most salient with regards to discussing the youthful Arnault. It’s no exaggeration that many of the Swiss watch commerce by no means actually tried to make a go of grabbing a part of the smartwatch pie. So why and the way did TAG Heuer handle it? The reply in a single identify is Frédéric Arnault, though he was behind the scenes on the time and has by no means actually made the TAG Heuer Related Watch about himself. There’s an fascinating story right here, which requires us to backtrack somewhat and get into Arnault’s historical past.

The fourth youngster of Bernard Arnault, Frédéric is on the document saying he by no means felt pressured to hitch what quantities to the household enterprise. Notably, he’s additionally one in every of 5 Arnault youngsters to seek out himself working at LVMH, and now the second within the watch enterprise; youthful brother Jean works at Louis Vuitton watches, however Frédéric paved the way in which for him, arguably. The New York Occasions and South China Morning Publish, amongst others, word that Frédéric and the opposite Arnault youngsters all grew up in, or round, the enterprise, which can be a supposition however not an unfair one provided that they’re basically a part of a household enterprise. Consider it this manner: What do you name a farmer’s spouse, and youngsters? The reply is farmers, in fact.

Like lots of France’s elite, Frédéric Arnault attended the École Polytechnique, rising with a level in utilized arithmetic and laptop science. He later interned at Fb and McKinsey & Firm, earlier than co-founding a cellular fee start-up with a buddy from college. On the identical time, he was already engaged on the Related Watch at TAG Heuer. The beginning-up was offered to funding agency BNP after 18 months and Arnault correctly joined TAG Heuer in 2017 in a short lived position because the boss of related applied sciences. On the identical time, he indulged in his love of music, reportedly taking part in piano at spectacular ranges. He used to provide live shows annually, till he turned CEO in fact, based on the New York Occasions.

Software program Engineering

TAG Heuer Connected Calibre E4
Picture: TAG Heuer

Whereas Arnault’s rise might have been meteoric, he did study some spectacular classes throughout his know-how stints. For instance, in our dialogue, he expressed a level of incredulity concerning the fascination Swiss watchmaking companies have with vertical integration, though he does word the significance of leveraging TAG Heuer’s know-how in assembling nice wristwatches. He simply didn’t suppose the corporate wanted to be within the micro-electronics enterprise. Arnault understood instantly that software program was the sport.

“After I joined, emphasis had been placed on the manufacturing, making every thing Swiss-Made, so investing in our personal factories to construct the Related Watch. After I studied the business, the applied sciences evolve so quick that it’s nearly not possible (to perform) with the volumes that we had, and what we deliberate to realize… It took a while for me to shift this (to say) truly we’re not going to speculate ourselves in manufacturing (of the Related Watch). The place we have to make investments is on differentiation (between all the numerous smartwatch choices), which implies software program, and that’s why we constructed our personal software program staff.”

In the long run, Arnault leveraged on his experience within the know-how sector to arrange store in Paris, the place TAG Heuer takes care of design and mechanics by leveraging off the experience of the Swiss manufacturing groups. He notes that they now give attention to growing software program, and making some {hardware}, to construct the model’s use-cases and drive the know-how behind the success of the Related Watch. The remainder of the electronics {hardware}, effectively that’s constructed by companions and distributors. One main pay-off right here is that TAG Heuer has the preferred golf app on the planet, based on the Occasions.


TAG Heuer STILL in water
Picture: TAG Heuer

This partnership narrative performs out in different areas of manufacturing as effectively, with quartz know-how being one other instance. It additionally explains one of the vital talked-up and stunning developments arising from TAG Heuer this 12 months: the Aquaracer Superdiver, powered by a Kenissi computerized motion.

“What’s essential is differentiation on the merchandise and the extent of high quality we provide to our prospects. Generally for some actions, we make investments in-house for many of the facets just like the Heuer computerized motion and the place we go very deep. We’re investing additionally on the hairspring…it’s not industrialized but so we will solely supply it on very high-end items reminiscent of our tourbillon or among the Solely Watch items that we do. We’re engaged on industrializing it as a result of it has numerous advantages for the client: higher precision, higher sturdiness, and a few manufacturing advantages as effectively.

“So, there’s causes for us to speculate there, however we don’t essentially need or aspire to do every thing ourselves. For some actions, we associate with the most effective…so with Kenissi for a threehand motion in our Aquaracer. Additionally, for quartz, we’re not going to develop and construct quartz ourselves once we can have entry to the most effective know-how and work hand-in-hand with a associate that can permit us to develop unique applied sciences for us.”

This level-headed and pragmatic method is just not restricted to manufacturing and the digital realm, and goes a great distance in direction of explaining why Arnault (and LVMH) aren’t shy about Web3 parts reminiscent of cryptocurrency and NFTs, present headwinds however. Why ought to manufacturers not hedge their bets, in any case. Maybe essentially the most well-known of Arnault’s partnership strikes is his largest publicity coup: securing Ryan Gosling as a TAG Heuer model ambassador. Identical to the Porsche partnership, Arnault drove the trouble to safe the Drive star. Gosling had by no means accepted any model partnerships, and famously doesn’t play this recreation. However, Arnault felt he was an excellent match.

Thought Chief

“Sure, sports activities performed an essential position within the historical past of the model, however we additionally all the time had a really robust reference to Hollywood, being current in some iconic motion pictures. In fact, there’s Steve McQueen (whose relationship with the Monaco is known, see #65 – Ed) and extra just lately we had additionally some very iconic ambassadors on this world (Chris Hemsworth, notably).

“We need to construct the connection with Ryan Gosling (he’s presently designing a watch with TAG Heuer). , that’s how we method it. We don’t desire a one-way partnership the place the ambassador is simply there as a result of he’s been referred to as upon by the model (to do one thing). No, he must need it. To present his time, to provide enter; it’s actual collaboration we now have with him, and he’s very concerned within the particulars of all of the creatives with him. He provides numerous concepts. He challenges us.”

Clearly, Arnault relishes challenges, and is himself considerably difficult. He’s definitely an interview problem, as famous earlier, and maybe Gosling’s rejection of social media (he has no public presence on any platform, besides TAG Heuer’s now) resonated. Internally, Arnault clashed with loads of TAG Heuer executives, with varied information studies harping on his tendency to be cussed about getting his manner. “We clashed in every single place to start with, however now we chuckle about it,” Bianchi stated. “You possibly can have a giant mind and never be a pacesetter. He has each.”

It appears Arnault has mellowed considerably, if he values partnerships as a lot as stated he does on this interview. On condition that these initiatives are all long-term, then his actions give pressure to his phrases. We look ahead to checking in with him once more quickly.

For extra reads on leaders, click on right here.

Rahul Diyashi
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