Career Chopard: thanks to smart succession planning

From a small business to a global brand: Chopard stands for watches and jewelry as well as for a closely-knit family business.

11 Jun 2019 10 min read
Siblings Caroline and Karl-Friedrich Scheufele, Co-Presidents of Chopard
Photo: Alexandra Pauli

Mr Chopard didn’t answer the phone. For weeks. Karl Scheufele, an entrepreneur from Pforzheim, kept on trying – he wanted to speak to Paul-André Chopard in Geneva. This was because Karl Scheufele had a plan, a vision rather, and the Maison Chopard played an important role in it.

In 1963 Karl Scheufele had set his mind on acquiring a watch company in Switzerland. He had realized that this would be a way to take a decisive step forward with his company. It was clear to the company boss from the Black Forest that it had to be a Geneva watch brand. Along with a few other brands, his wish list included the name Chopard – a small traditional company that employed four watchmakers at the time.

But dialing the telephone number so many times was useless. Monsieur Chopard’s phone rang into nothing. Karl Scheufele finally drove his VW Beetle to Geneva with his father-in-law. And visited the companies he had previously managed to contact by telephone. On the day of the return journey, a Sunday, he made one last attempt. He dialed the number from a phone booth. And this time Monsieur Chopard answered. On Sunday he wasn’t busy repairing watches and had time to take phone calls.

Scheufele family

Almost 60 years later, siblings Karl-Friedrich and Caroline Scheufele sit in the salon at the Geneva headquarters of the now global Chopard company. And tell the story about their father. They’ve long since taken over the management. As Co-Presidents, they manage the company, which now has 2,000 employees worldwide – Caroline Scheufele is responsible for the Jewelry division and Karl-Friedrich Scheufele for the Watch division.

The fact that the siblings know the history of the founding of the company down to the last detail has a lot to do with family customs. They were playfully included in the company from childhood. They sat there when business partners were invited to the domestic table, happily rolled along long corridors in their father’s office chair, and were allowed to pick up a sparkling diamond from time to time. Scheufele’s home and company belonged together in a natural way.

No-one could have known at the time that with the takeover of Chopard, it was not only the history of the Scheufele family and the Geneva brand that was beginning. At the same time it was the prelude to the story of a successful succession plan, albeit an initially very discreet one.

Little by little, the children were given responsibility. And even at a very young age, they contributed ideas that sometimes didn’t convince their parents right away, but which they subsequently became enthusiastic about. Some of them were ideas that later turned out to be a stroke of luck for the company.

Polishing watches and carrying suitcases

Karl-Friedrich Scheufele was 16 years old when he was allowed to accompany his father Karl on a business trip to Vienna. This gave him the chance to watch how the big boss conducted business talks. He was also permitted to write down orders. One of his other duties was to carry the suitcases. He was also entrusted with polishing the watches in the evening so that they would shine in the best light the next day. His younger sister Caroline had similar experiences. “We were often allowed to go to interesting places,” she explains – the Basel Watch Fair, for example. Chopard’s stand was still relatively tiny, and everyone had to lend a hand.

Chopard Manufacture

One day Karl-Friedrich Scheufele had an idea. We should offer a sports watch, a watch in a steel case, he suggested to his father. “But Chopard has never made steel watches before,” his father replied. “And anyway, waterproof watches and sports watches aren't really our thing.”

Karl-Friedrich Scheufele, who today sits at the table in front of a large Louis-Berthoud grandfather clock, pauses briefly as he tells the story. And then points out dryly: “We finally convinced him.”

The word “we” in the sentence is not a coincidence: the siblings, who even still share an office, showed a united front even then. “Caroline supported me,” stresses Scheufele. And so the siblings were allowed to play a decisive role in the design of the sports watch. In 1980, Karl-Friedrich was just 21 years old when the model was presented at the Basel Watch Fair. “St. Moritz” was the name of the watch, which went on to become a successful model.

We were often allowed to go to interesting places.
Caroline Scheufele

Caroline Scheufele had a similar experience. When she was just 16 she created her first piece of jewelry – the Happy Diamonds Clown – based on the Happy Diamonds watches with movable diamonds. The name of the collection came from her mother, Karin Scheufele. Her father then had the Happy Clown made for real as a Christmas surprise. A few years later, in 1985, to mark the 125th anniversary of the company, this Clown was the starting point for the launch of the first jewelry collection at Chopard.

It was also the start of a line of business that has since developed into a supporting pillar of the company. With the exception of a few accessories such as cuff links, Chopard did not yet offer any jewelry. Today, this division accounts for about half of total sales.

It is important to point out that even when the children were able to convince their parents of an idea, at the same time they were challenged to back it up accordingly. “You had to come up with arguments, defend the idea and ultimately present results,” Karl-Friedrich Scheufele remembers. “Then it worked.”

Innovations by the Scheufele

Creative team: Caroline Scheufele (left) with Julianne Moore in the Haute Joaillerie studio in Geneva.
Caroline Scheufele was 16 when she designed the Happy Diamonds Clown, which was the starting point for the launch of the first jewelry collection in 1985.

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Chopard watchmakers at work. Before many others, Karl-Friedrich Scheufele decided to open his own manufactory. He also founded an exquisite Haute Horlogerie brand along with Ferdinand Berthoud.

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On the initiative of Caroline Scheufele, Chopard pioneered Fairmined Gold and since July 2018 has used only ethically flawless gold. Chopard achieves this by building up long-term partnerships in small-scale mining. To ensure transparency from the mine to the manufactory, the Scheufele rely on non-governmental organizations to monitor the processes.

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The Chopard St. Moritz – the first watch creation by Karl-Friedrich Scheufele. In 1980, the watch was presented at the Basel Watch Fair – Karl-Friedrich was just 21 years old at the time.

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Caroline Scheufele provided another significant impetus for growth. “We need our own boutiques,” she said long before the industry opted for its own boutiques to optimize margins. And so it happened: today the company has 60 boutiques of its own. And just as many franchise operations.

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Conversely, they very much encourage their parents’ interference today, and their parents are happy to oblige. According to Karl-Friedrich for example, their mother, Karin, is still a gifted controller – the best he knows. She is constantly discovering new weaknesses in processes that no one else has come across. Their parents are still present in the company every day. And just like Karl-Friedrich and Caroline, they eat with the staff in the company restaurant.

Differences of opinion are resolved “democratically” by the siblings, as they say. Then it would be their parents’ turn. They could be called in to act as mediators. Although it is easy to guess that this is not often necessary. The usual governance instruments are available to deal with such cases: the family charter, family council, appropriate contracts. But they rest unused in a drawer.

Caroline Scheufele

Pioneering brand for Fairmined Gold

The company grew well and developed into a global player. “To start off with,” reports Karl-Friedrich Scheufele, “it was a pure production company that did not have its own sales department, but worked directly with jewelers.” At some point the first branch was established in France, in 1976 an agency was created in the USA, and so it went on. It was a kind of natural development that he, Karl-Friedrich, became responsible for it. Today Chopard has 15 offices.

Caroline Scheufele provided another significant impetus for growth. “We need our own boutiques,” she said long before the industry opted for its own boutiques to optimize margins. And so it happened: today the company has 60 boutiques of its own. And just as many franchise operations.

No wonder, some look on enviously – the Scheufele have again and again sensed trends long before other brands and implemented them. However, this has always happened out of conviction, for instance when Karl-Friedrich started relying on his own manufactory for his watches. Or when he decided a few years ago to found a small and exquisite high-end brand under the traditional name of Ferdinand Berthoud. For him, this was a matter close to his heart – but heart, he says, should still have a place in a hard business, “because after all, we sell emotions”. And moreover, some matters close to the heart had proved to be a wise investment in retrospect.

Matters of the heart should still have a place in hard business.
Karl-Friedrich Scheufele

Gold is an example of this. On the initiative of Caroline Scheufele, Chopard pioneered Fairmined Gold and since July 2018 has used only ethically flawless gold. This chapter began in 2013 at the Cannes Film Festival, where Chopard was strongly involved.

“Where does your gold come from?” asked Livia Firth, the wife of actor Colin Firth and founder of Eco-Age. “I don’t know exactly,” Caroline admitted. And a little later on, she said to her brother: “We’ve got to do something about that.” For the company it was “quite an exercise in change management”. The leadership duo was able to benefit from the fact that their father had already insisted on in-house production – for watch cases – and even had their own gold smelter set up in 1978. Without this, probably the first of its kind in the industry, it would not have been possible to make the switch, because this was the only way to ensure that every step in the company could be controlled and certified. From the mine to the manufactory, the Scheufele rely on non-governmental organizations to monitor the processes.

The Scheufele family

Photo: Alexandra Pauli

The next generation

The two Co-Presidents would like to see the new generation take over at the helm one day. But the children themselves would have to really want it. And qualify to do so first. Because today the requirements are high.

What if the children don’t want to take over? Then the successor must on no account be a technocrat, not even someone who only wants to sell via storytelling. It would have to be someone with a relationship to the product. “Because it all starts with the product,” says Karl-Friedrich Scheufele.

Fortunately, however, the three children of the youngest generation are interested in watches and jewelry. This is especially true of Scheufele's son. “For a while, I was a little worried because he didn’t want to wear a watch at all. But suddenly he discovered watches and now that’s all he ever talks about as it were.”

What if history repeats itself? When the son suddenly comes along with a product idea that is father doesn’t like right away? That’s already happened, Scheufele smiles. But we won't give away any secrets just yet.

It all starts with the product.
Karl-Friedrich Scheufele

Incidentally, the fact that the company has always relied on the same house bank fits in well with its consistent policy. They are satisfied with UBS and pleased with the support provided – for example with regard to the management of gold resources. When it comes to banking, Caroline and Karl-Friedrich Scheufele follow their parents’ advice anyway: to maintain good relationships.

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