Bernardo M. Villegas
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Passion for Welfare of Employees

           He was not as famous as Steve Jobs or Bill Gates.  But Carl Elsener, a Swiss entrepreneur who recently passed away, deserves as much attention, if not more, from owners of business and CEOs who are looking for a role model.  I had heard of the company that he had managed since he was 28, taking over from his father.  It was his grandfather who founded the company.    Victorinox was one of the companies included in the list of model enterprises for business ethics and people development that some of my colleagues at the IESE Business School liked to talk about.  Although Elsener managed the company for more than half a century, very few people knew his name.  What were globally renowned were the Swiss army knives produced by Victorinox that millions of people bought in the airports.  I myself had three of those given to me as gifts by my friends.

          As many international travelers realized, the company got into trouble when Swiss knives were banned from handcarried luggage after the September 11, 2011 terrorist attacks against the World Trade Center and the Pentagon in the U.S.  Within months, the sales of Victorinox plummeted by 30 per cent.  As James Shotter wrote in the Financial Times last June 8 - 9, 2013, "Many corporate chiefs would have responded to a shock of this magnitude with a hefty cut in staff numbers.  But Elsener was not going to make anyone redundant.  Instead, the company cut shift times, cancelled overtime, encouraged some to take holidays and lent an additional batch of employees to other companies in the region."  The employees lent were soon able to return to Victorinox after a brilliant strategic move of the company to diversify into other product lines from watches and travel gear to fragrances and fashion.  As anyone who travels has observed in the leading international airports, Victorinox is no longer limited to selling knives and the like.  One can find the most fashionable pieces of luggage, colognes, perfumes, and accessories.  Under the leadership of Carl Elsener, Victorinox was able to convert crisis into opportunity and thus maintain its record of not having fired an employee for economic reasons in more than 80 years.

           His grandfather founded the cutlery operation in l884 in Schwyz, a rugged canton in central Switzerland. (I have been for years encouraging entrepreneurs in Batangas with their balisong and in Tabaco, Albay with their utility knives to emulate Victorinox in going global.)  It was Carl who opened subsidiaries around the world after he took over from his father in 1950.  As Shoffer wrote:  "At the same time, he transformed the company from an artisanal business, which had made many of its wares by hand, into one where an array of machines now help to turn out up to 60,000 of the compact red-clad tools a day.  Elsener was nothing if not an innovator, and Victorinox's expansion was accompanied by a proliferation of new features for the penknives.  The gadget that was once built around blades, screwdriver tips and can openers now boasts of everything from LEDs to USB sticks."  This is an outstanding example of a grandson continuing the entrepreneurial work started by his grandfather.  This is a challenge that we take seriously in the Entrepreneurial Management Program of the University of Asia and the Pacific.  Our mentors, who are experienced business executives, make it a point to encourage the children and grandchildren of Filipino entrepreneurs to build on the successes of their forebears through continuing innovation and the professionalization of management.

          What the aftermath of the September 11 global disaster brought into great relief was the passion that Elsener had for the welfare of his employees.  Shotte hit the nail on the head when he said:  "Yet despite his fascination with the products, Elsener never forgot the people who made them.  With a Christian faith that pervaded his life, he took his responsibility as Schwyz's largest private employer very seriously.  He ensured that no one at the company earned more than five times the salary of its average worker--and that a staff savings institution offered above-market rates of interest."   I would like Filipino business people to consider Carl Elsener  as a role model for his concern for his people, especially the rank and file.  As one of his friends said, "He was a socially conscious person.  The most important thing for him was to be able to look after his employees, and he has passed that outlook on to the next generation."  He reminds me of Jose Yao Campos, the Founder of United Laboratories, the largest Philippine pharmaceutical and personal care products Company, whose passion for the welfare of his employees was also legendary.  For comments, my email address is bernardo.villegas@uap.asia