As soon as we arrived in the charming city of Schwyz and made our way towards the factory, one of the Victorinox employees gave us an hour long tour of the facilities, and explained to us in detail how these famous Swiss Military Knives came to life. We got to see the astounding number of pieces they produce and to experience the precision and quality which made them famous.
The tour was fascinating, however the most interesting part of our journey came later when we sat down with Mr. Elsener in a beautiful meeting room and had an interesting chat about VIctorinox’s history and what makes them so special. Mr. Elsener, being the fourth generation to run this company, is a very humble and caring man which took great pleasure at seeing his company and his employees succeed.
Victorinox was founded more than 130 years ago in Schwyz, by the great-grandfather of the current CEO. Since then, the management has always tried to run the company as a caring family business. They are not focused on results quarter by quarter, but rather they measure success from generation to generation. We quickly became aware of the fact that this notion of family business extends much further than to just the management team. Indeed, this idea also concerns the employees, which are at the top of Mr. Elsener list of priorities. This is exactly the reason why some of them decide to stay with the company for more than 40 years.
This caring environment for the workers is without a doubt one of the key success factors that enabled the company to become what it is today. In around 130 years, Victorinox slowly grew to become the biggest manufacturer of pocket knives in the world, employing almost 2’000 employees with around 500 million in revenues each year. Victorinox is clearly a success story in Switzerland, but it is also a great example of what treating your employees right can do for you.
To give us a concrete example on how to follow this ideology in practice, Mr. Elsener told us an astounding story. Back in 2001, after the 9/11 attacks in New York, new regulations prohibited the sale of pocket knives in airplanes and airports, and also prevented passengers to carry-on those knives with them. Thus, from one day to the other, almost 40% of the company’s sales were cancelled. This had disastrous consequences on Victorinox’s finances, however they still managed not to fire any employees during this crisis.
Victorinox achieved that first and foremost because of their conservative spending policy which is oriented towards always having substantial savings and being prepared for tougher times. However, this still wasn’t enough for them to go through this struggle, they needed to find a way to generate revenue to compensate for the salary spending.
The solution they found was quite simple: they managed to find some work for their employees in other factories. For instance, when another factory had a considerable order, Victorinox would contact them and rent them the services of their skilled employees. Thus, in the morning when workers would arrive at the factory, the company had organised buses that would take them to the other firm. This allowed Victorinox to receive some revenues from this process and the other company to benefit from the work of skilled employees.
Most importantly, it allowed for all the workers at the headquarters to keep a steady job and feel safe in their position. Indeed, knowing that your employer will go to such a length to keep you part of the organisation must be reassuring in a world where termination for financial reasons are the norm. This behaviour is also very beneficial for Victorinox in the long run; an employee is far more inclined to work harder for a company that he/she loves and feels safe at than for one that they despise.
Overall, this visit in Schwyz was very inspiring and fulfilling for all of us. We got a first-hand look at the production of one of Switzerland’s most iconic products, and we got to meet with incredible people and hear their stories. When we left the headquarters towards the end of the day, we were happy to find yet another example of what a purposeful company looks like and how successful they can be.
We were honoured to have Mr. Elsener present a keynote during our conference back in November; it was one of the most interesting and endearing portions of the event. Both our company tour/meeting and the keynote speech elucidated for everyone what sets Victorinox apart from so many other big companies: the care they have for the well-being of their employees.