This document summarizes a presentation about implementing an open innovation framework for interorganizational collaboration in the fashion industry. The presentation discusses how open innovation networks can help address industry challenges and the benefits they provide through increased speed and access to new ideas. It also outlines how to prepare an open innovation framework, including establishing strategy, processes, culture and committed people. Finally, it describes how companies can partner in the open innovation journey and provides examples of Swarovski's open innovation efforts.

1. CHALLENGES IN IMPLEMENTING A
FRAMEWORK FOR OPEN INNOVATION
INTERORGANIZATIONAL COLLABORATION IN THE
FASHION INDUSTRY
Hannes Erler
Director
Open Innovation Networks
London
October 17th, 2014

2. AGENDA
• Why interorganizational networks are the answer to the open innovation
challenge
• How to prepare the framework
• How you can be a partner in our open innovation journey

3. OPEN INNOVATION
THE NEW NORMAL

4. THE EVOLUTION OF INNOVATION
Evolution phase
ValueforOrganization
Lonely
Heroes
Guerilla Groups
Cultural Islands
Innovation
Excellence
Lonely
Heroes
Guerilla Groups Cultural Islands
Integrated Innovation
Architecture & Leadership
(RD&I)
 Isolated employees
 Without resources
 Without internal
willingness to coop
 First intercompany
networking (ad-hoc)
 Unstructured
 First subareas (islands)
are visible
 Partially structured
 Limited outcome
 Climate, culture and leadership
 Company-wide portfolio
 Interorganizational collaboration
 Innovation strategy
 End to end view
 Structured and targeted
 Resource-backed
© Copyright Swarovski AG, 2014
FROM THE PERSPECTIVE OF INNOVATION ACTORS

5. THE WORLD IS CHANGING DRAMATICALLY
Demographic Change
New Powers
Globalization
Other Important Trends:
Digitalization, Sustainability, Networks and Individualization…
© Copyright Swarovski AG, 2014

6. Remarks on Open Innovation
US$ 330 Billion World R&D
Investment
90% of IP are not utilized
by those who invented it
Innovation today driven
by speed, transparency,
connectivity and
openness.
The main benefit from OI is
speed and unexpected
opportunities
Balancing internal and
external idea sources
Understand your internal,
external stakeholders if
you want open innovation
success. Are they backers,
blockers, neutral? Why?
Role of Middle Managers:
Don‘t underestimate – they
can stop innovation by just
doing their jobs.
© Copyright Swarovski AG, 2014

7. LEVELS OF VALUE CREATION
Source: Elke den Ouden, Innovation Design, Springer 2012
No problem can
be solved from
the same level of
consciousness
that created it.
Albert Einstein
© Copyright Swarovski AG, 2014

8. OPEN INNOVATION IS LIKE A PARACHUTE
It works better
when it’s open!
OPEN INNOVATION IS
LIKE A PARACHUTE

9. AGENDA
• Why interorganizational networks are the answer to the open innovation
challenge
• How to prepare the framework
• How you can be a partner in our open innovation journey

10. SWAROVSKI GROUP
FACTS & FIGURES
General Information
 Headquarters: Wattens, AUSTRIA
 Group Turnover: € 3.1 billion
 Group Employees: 30,600
 Global distribution: 170 countries
Areas of Business
 Cut Crystal Elements Swarovski Elements
 Crystal Objects, Jewelry & Accessories Swarovski
 Precision Optical Equipment Swarovski Optik
 Bonded Grinding & Dressing Tools Tyrolit
 Precision Cut Synthetic Gemstones Swarovski Gems
 Road Safety Products Swareflex
© Copyright Swarovski AG, 2014

11. SWAROVSKI CRYSTAL BUSINESS
B2C AND B2B APPROACH
CONSUMER PRODUCTS
MADE BY SWAROVSKI
B2C
MADE WITH
SWAROVSKI Crystals
B2B

12. THE INNOVISIONARY
© Copyright Swarovski AG, 2014

13. SWAROVSKI OPEN INNOVATION PROCESS
© Copyright Swarovski AG, 2014

14. IMPORTANT ELEMENTS TO LEVERAGE INNOVATION
Strategy
• Communicated Innovation Strategy
• Aligned Search Fields
• Targeted Innovation Portfolio
• Open Innovation
Processes & Tools
• Overall Innovation
Portfolio Boards
• Idea Management / Targeted Streams
• Stage Gate for Operative Realization
Committed People
• Intrinsic Motivators
• Participation and Transparency
• Active Support of
Creative Development
Organization
• Research, Design
& Innovation
on Executive Level
• Cross-functional Teams and Networks
• Clearly Defined Functions
CULTURE
MYTHS
VALUES
© Copyright Swarovski AG, 2014

15. VALUES
© Copyright Swarovski AG, 2014

16. OPEN INNOVATION
AT SWAROVSKI
1956
New Coating Effect
Aurora Borealis
2010
Crystal Rocks
2012
Xirius
1931
Trimmings
1993
Crystal Mesh
1949
Optical Instruments
1975
Hotfix Technology
2001
Crystal Fabric
2009
Crystal Ceramics
2011
Advanced Crystal
1956 Aurora Borealis
Together with Christian Dior, Swarovski
develops the «Aurora Borealis» effect,
a shimmering finish that enhances the
sparkle of cut crystal.
© Copyright Swarovski AG, 2014

17. COLLABORATION WITH JEAN PAUL GAULTIER
SPIKES AND RIVETS
© Copyright Swarovski AG, 2014

18. NEW ENABLING TECHNOLOGIES
1956
New Coating Effect
Aurora Borealis
2010
Crystal Rocks
2012
Xirius
1931
Trimmings
1993
Crystal Mesh
1949
Optical Instruments
1975
Hotfix technology
2001
Crystal Fabric
2009
Crystal Ceramics
2011
Advanced Crystal
2013 Crystal In-Mold Foiling
Innovative technology to integrate Swarovski
crystals into plastic products produced by
customers (e.g. mobile phones, tablets,
cameras), thus opening up completely new
areas of applications.
Specially developed crystals and a fully
automated production process make this
technology completely unique.
© Copyright Swarovski AG, 2014

19. HAUTE COUTURE, ON STAGE AND SCREEN
SWAROVSKI ELEMENTS ARE SPARKLING
Alexandre Vauthier Victoria’s Secret James Bond
© Copyright Swarovski AG, 2014

20. AGENDA
• Why interorganizational networks are the answer to the open innovation
challenge
• How to prepare the framework
• How you can be a partner in our open innovation journey

22. HOW WE PARTNER ALONG THE VALUE CHAIN
DIFFERENTIATING & CREATING VALUE
RETAIL
CO-BRANDING
ADV. & PR
PROTOTYPING
CREATIVE
SUPPORT
APPLICATION
SUPPORT
PRODUCT & DESIGN COMPETENCE APPLICATION SOLUTIONS
RECOMMENDED
APPLICATION
PARTNER
APPLICATION
INNOVATION
CONSUMERSOURCINGMANUFACTURINGDESIGN
© Copyright Swarovski AG, 2014

23. SEGMENT PLATFORMS
INDUSTRY OVERVIEW
Jewelry Textile Accessories Interiors Beyond Create Your
Style
© Copyright Swarovski AG, 2014

24. DISRUPTIVE TECHNOLOGY INNOVATIONS
WHAT WE ARE LOOKING FOR
Emerging
technologies
Technology
innovations
earlier invented
or used in non-
fashion context
Other
innovations that
can be applied
in different
areas of our
business fields
Innovations that
contribute to
our 5 search
fields
© Copyright Swarovski AG, 2014

25. WHAT WE ARE WORKING ON
New Looks and
Surfaces
•Functional and smart
surfaces
•Brilliance
•Colors and effects
•Surface structure
•Durability
Application
Techniques
•New application
techniques enabling
new, unexpected and
easy to use jewelry
solutions
•Application of crystal on
other materials than
usual (outside of the
box)
•Automation
New Materials
and Material
Combinations
•New, trendy and
attractive materials for
all fashion oriented
segments
•Materials with different
physical characteristics
e.g. ceramics
•New inspiring carrier
materials
Jewelry
Manufacturing
Excellence
•Disruptive
manufacturing
technologies
•Process innovations to
increase speed and
efficiency
•Setting of jewelry stones
•Smart Packaging
New Business
•All new business
concepts along the
value chain from
production to retail
•New markets and
industries
•Various partnership
models possible
Preeminent player in the Jewelry Industry: Fashion Meets Technology
© Copyright Swarovski AG, 2014

26. MORE KNOWLEDGE AND MORE BUSINESS
THIS IS YOUR ADVANTAGE
Collaboration
leading to
additional
business for
both sides
Research &
Development
Agreements
Workshops for
transforming
your expertise
into the
fashion
industry
Benefit from a
strong brand
http://openinnovation.swarovski.com
© Copyright Swarovski AG, 2014

27. Identify Engage Collaborate
NETWORK MANAGEMENT
SWAROVSKI OPEN INNOVATION
Open Innovation
Partner
(Inside-Out)
Swarovski Open
Innovation
(Outside-In)
© Copyright Swarovski AG, 2014

28. KEY TAKEAWAYS
Open Innovation is an important element for
successful innovation
Speed and opening up to outside ideas are the
main benefits
The people factor should not be under
estimated
International sourcing of partners is essential
© Copyright Swarovski AG, 2014

29. We add sparkle
to people’s everyday
lives.

30. PUBLICATIONS
2008 Erler, H.; Rieger, M.; Füller, J. (2009): Ideenmanagement und Innovation mit Social Networks – Die Swarovski i-
flash Community In: Kommunikation als Erfolgsfaktor im Innovationmanagement - Strategien im Zeitalter der Open
Innovation. Hrsg.: Zerfaß, A.; Möslein, K. Gabler, Wiesbaden 2009, S. 159-176.
2010 Erler, H.; Wilhelmer, D. (2010): Ein neues Paradigma - Mit Netzwerken Innovationsprozesse steuern, in: Serhan Ili
(Hrsg.): Open Innovation umsetzen – Prozesse, Methoden, Systeme, Kultur. Düsseldorf, Verlag Symposion, p. 225 – 270.
Link dazu: http://www.symposion.de/default?cmslesen/q0002750_34740101
2010 Innovation Network: „An Integrated Organizational Setup for Management Learning” Publikation und Vortrag im
Rahmen der Konferenz “MOT – Management and Organizational Learning” in Wien
2012 Network Setups Driving Social Innovation
In: ZSI Discussion Paper, No. 29, 2012
Authors: Doris Wilhelmer, Hannes Erler, Petra Wagner, Barbara Streicher
2014 Doris Wilhelmer, Hannes Erler, Jeff Zimmerman (2014): Innovation Network – An integrated organizational
structure for organizational and management learning
In: Leadership Learning for the future. Information Age Publishing, Inc., p. 273 - 300