Carl Elsener Jr., Victorinox CEO, is interview by Regine Wieder (*)

What does Swissness mean to you? What are typically Swiss characteristics?

Carl Elsener: In my opinion, the concept of Swissness encompasses all those typically Swiss attributes which are expressed by Switzerland as a brand. Thus, Swiss characteristics for me are reliability, solidarity, humility, a strong work ethic, and a keen sense of quality. But at the same time, Swissness also includes an attitude that is open-minded and far-sighted. Finally, Switzerland also means the best watches, the most delicious chocolate, and, naturally, the world’s finest pocket knives.

The Victorinox Swiss Army Knife is one of the most prominent symbols of Swissness. What makes this knife so typically Swiss besides – in the original design – its red color and white cross?

Carl Elsener: It’s three things: its high quality, its functional design, and its reliability. In fact, the Victorinox pocket knife is so strongly linked with these properties in people’s minds that other companies use it to symbolize these qualities. The U.S. helicopter manufacturer Sikorsky, for example, refers to one of its models as the “Swiss Army Knife of helicopters”. And Roger Federer has been described by the New York Times as a “veritable Swiss Army Knife of a tennis player”.

What other products does Victorinox sell besides its famous Swiss Army Knives? How do you define what to include in your product portfolio? What are your strategic guidelines?

Carl Elsener: In addition to pocket knives, we sell household and professional knives, timepieces, travel gear, as well as fashion and fragrances. We want to develop and market products that are relevant to our customers and have the same unique combination of quality, functionality, innovation, and iconic design that distinguish the original Swiss Army Knife. Whether these are pocket knives or timepieces, travel gear or fragrances, they all embody the same spirit. None of them is just a tool or a lifestyle object. They are companions for life.

Our fragrances, to take one example, meet these criteria, which is why they were added to our portfolio in 2005. We even gave them functionality by creating additional, travelsize containers made of plastic, designed to look like our knives. Before you go on a trip, you can pump a small quantity of fragrance from the glass bottle into the travel container in a few easy movements. In future, we’d like to show the original product values of the Swiss Army Knife even more clearly in our other product categories.

Your brand is called “Victorinox”. Why have you decided to add “Swiss Army” to so many of your products, for instance your ladies’ fragrance “Swiss Army Mountain Water for Her”? What makes the “Swiss Army” label so appealing?

Carl Elsener: The brand name “Swiss Army” originates in the United States, where it established itself in the 1950s and is still very successful. The term “Swiss Army Knives” was created by American soldiers who came to Europe during the Second World War and were impressed by the precision of the pocket knives used by the Swiss army. In 1950, our American distributor Forschner Group started to market Victorinox pocket knives under the label “Swiss Army Knives”, and in 2002 we took over both Forschner Group and the Swiss Army Knives brand. We thought it important to own the name because it was created as a result of the qualities of the Swiss army knife and, also, because it stands for all Victorinox products, especially in the North-American market.

90 percent of your pocket knives are destined for export. Where are your main export markets and what makes your knives so successful there?

Carl Elsener: The United States and Germany have the lead. Together, they amount to over 30 percent of our export turnover, followed by China, Mexico, and France. The Swiss Army brand name is very popular in the United States, while in Germany customers focus on the useful functions of our knives. Our success in the German market is probably also due to the fact that Germans love home improvement and DIY. In Latin American countries, factors like a masculine culture and the traditional significance of knives in general may explain the good sales figures.

Victorinox knives are popular gifts. In some cultures, however, the knife holds negative connotations. Does this affect your marketing campaigns for those countries?

Carl Elsener: Since gifts often have symbolic meaning, some cultures have a problem with receiving a knife as a gift. In some Asian countries, for instance, the knife is considered a device that “cuts the ribbon of friendship” – even though many Asians like to buy our pocket knives when visiting Switzerland. You should therefore do some research before buying a knife as a present for a person from a different culture. In Europe, I’ve seen people pay a coin to the giver to deprive the knife of its negative power.

It’s thus very fortunate for us that our pocket knives are nonetheless very successful in Asia. We think it’s because they’re considered an accessory or a practical tool rather than a real knife.

We’ve also noticed cultural differences in consumers’ expectations to how the knives are packaged. In China, for example, large, ostentatious packaging is almost as important as the contents themselves.

Even the window displays in our flagship stores vary according to cultural preferences: While in London, we display fashion, watches, and travel gear rather prominently, in Geneva our knives take pride of place.

Some of your articles are produced overseas, such as your luggage collection. Isn’t that a conflict of interest, when you have a strong Swiss brand name such as Victorinox?

Carl Elsener: We are very aware that by producing the world-famous Swiss Army Knife, we have created a Swiss icon and the embodiment of a product “made in Switzerland”. This is why Victorinox will continue to do everything they can to preserve this symbol of true Swissness. On the other hand, there are some product categories, such as luggage and clothing, where we are dependent on countries that have the know-how and the manpower necessary for efficient and economical manufacturing. Yet our brand promise holds true for all our products, even those that are produced abroad. We guarantee a high quality standard and choose our suppliers carefully. Victorinox has trained quality assurance teams who ensure that the high standards we set are met.

Internationally, Swiss products mainly have an image of reliability, high quality, and extravagance. Power of innovation is not usually associated with products made in Switzerland. However, is Victorinox seen as an innovative company?

Carl Elsener: Switzerland has many innovative companies. Victorinox, fortunately, is considered to be innovative both by our own country as well as internationally, which is very important for us. In fact, in 2011 we received the Swiss Award for Business Achievement. New products are the cornerstones of our success in the future. By staying close to the market, we try to recognize new customer needs as early as possible and be innovative in creating new products. This has led to the development of the Golf Tool, the Cybertool, the Rescue Tool, or our memory sticks, the Victorinox Flash and the Victorinox Secure, the latter of which is equipped with a biometric fingerprint sensor.

How do you develop new innovations? Are you guided by the market or do you try instead to influence the market with great new products?

Carl Elsener: We are curious and open for anything new. Our customers provide the incentive and the motivation for us to always surprise them with new, unique products. In addition to our R&D department, where 20 people are continually developing new products and updating existing ones, other departments also contribute great ideas, as do our subsidiaries and partners. Our Rescue Tool, for example, was an idea suggested by our in-house firefighting team. And the Swiss Army Knife inspires many loyal customers all over the world to send us their ideas and suggestions. One customer recently requested we integrate a fine screwdriver to tighten those tiny screws on glasses. We have actually found an ingenious solution by hiding the mini-screwdriver inside the knife’s corkscrew. Innovation is also one of the key issues of our personnel policy. To give you an example: After the terror attacks on 9/11, our turnover for pocket knives plummeted by 30 percent when duty-free and on-board sales collapsed. In order to avoid lay-offs, we went looking for firms in the region which temporarily needed extra staff and lent them up to 80 of our employees for a period of 4 to 8 months. This enabled us to survive a critical period in the history of our company without having to make anyone redundant.

Your products strongly rely on Switzerland as a brand. Although such co-branding has many advantages, could this dependency on Switzerland as a brand also be risky, for example, if there is a sudden change in how the typical Swiss values are perceived abroad?

Carl Elsener: Actually, we also make a considerable contribution to brand Switzerland. Over 400 million Victorinox knives are already somewhere abroad, and another 20 million more follow every year. All of them act as ambassadors for our country. The image of our products depends heavily on high quality and reliability, both typically Swiss values. I’m confident that these qualities will continue to be associated with Switzerland – and rightly so – even if negative attention, such as the ongoing discussion on fiscal evasion and banking secrecy, temporarily casts a shadow over our reputation.

Last year, you won the SwissAward in the “Business” category. The jury argued that with Victorinox and Swiss Army you have exported an important piece of Swissness to the whole world, where it continues to be successful. What do you yourself consider as your greatest entrepreneurial success?

Carl Elsener: There are three achievements which mean a great deal to me: Firstly, there is the culture of mutual respect and trust, which has existed in our family firm for four generations, and which we have managed to uphold, further strengthen, and pass on to our subsidiaries. Secondly, pocket knives produced in Switzerland continue to be internationally competitive articles sold successfully all over the world. And, finally, Victorinox has succeeded in transferring the inherent product qualities of the Victorinox pocket knife to other product categories.

In 2009, your company won the Swiss Fairness Prize in recognition of outstanding fairness in personnel management. One of the criteria was integrating people from other cultures. What effect does this diversity have on Victorinox? What significance do you think the integration of other nationalities has on the success of the Swiss economy?

Carl Elsener: The great diversity of nationalities in our headquarters in Switzerland, but also in our foreign subsidiaries, is enriching in every way. It basically enables us to get to know the opinions of others and allows us to meet each other with mutual respect and appreciation. At the same time, different cultures have different competencies which our company needs in order to be successful. We have, for example, hired a French perfumer to create our fragrances, and a Chinese with a great deal of international experience under her belt runs our subsidiary in Greater China. In order to succeed as an export nation, Switzerland generally needs to be close to its sales markets. And the only way it can achieve this is by means of cultural diversity.

(*) Published originally in Swissness. The Magazine of the School of Management and Law at Zurich University of Applied Sciences. International Edition, No. 1, July 2012.