Supporting slides for Swarovski case study. Based on article Dąbrowska, J., Lopez‐Vega, H. and Ritala, P., 2019. Waking the Sleeping Beauty: Swarovski’s Open Innovation Journey. R&D Management, 49(5), pp.775-788. https://doi.org/10.1111/radm.12374

1. Case Study - Supporting Teaching Slides for article by
Dąbrowska, J., Lopez‐Vega, H. and Ritala, P. (2019). R&D Management 49(5) pp. 775-788.
https://doi.org/10.1111/radm.12374
| * Top Downloaded Paper 2018-2019 in R&D Management
WAKING THE SLEEPING BEAUTY
‘s open innovation journey
1

2. PRESENTATION
OUTLINE
TOPICS COVERED
Learning Objectives
Theoretical Framing: Key Concepts
Company Overview
Swarovski’s Open Innovation Journey
Questions for Discussion
Image: ar130405 from Pixabay

3. “Every new era offers new possibilities for action and development.
Development never stands still. Innovations in one field inevitably lead to
innovations in others. One must remain alert at all times, always ready to
make the very best use of what emerges”
- Daniel Swarovski (1862–1956), founder of Swarovski
© Dabrowska, Lopez-Vega, Ritala

4. LEARNING OBJECTIVES
Understand the main
concepts of:
Organizational Rigidity (structural & capability)
Organizational Ambidexterity
(Close/Open) Open Innovation and Ecosystems
Design Strategies for
Organizational
Transformation
Learn HOW Swarovski (a mature company) embraced
organizational change and enhanced (open) innovation
capabilities
External and internal driving forces for change
Change mechanisms
© Dabrowska, Lopez-Vega, Ritala

5. SLEEPING BEAUTIES
Incumbent companies that
have been able to:
Hone their processes and technologies
unchanged over extended period of time;
Experience extended periods of low
competition and relatively undisturbed
success in the past;
Have a competitive advantage based on a
strong product, technology, or brand and,
thus, occupy a solid position in their
market.
© Dabrowska, Lopez-Vega, Ritala

6. Presentation by Prof. Michael Tushman
https://bit.ly/2WaBWP9
Watch the Spotlight on
The Need Within Corporations for Structural Ambidexterity
© Dabrowska, Lopez-Vega, Ritala

7. ORGANIZATIONAL
RIGIDITY
Is the outcome of decades of tinkering,
development, and trial-and-error activity by
dominant companies (Zollo and Winter, 2002; Danneels et al., 2017).
STRUCTURAL RIGIDITY
Relates to routines of the organization, how they are designed, and how
they drive exploration and exploitation processes (cf. Gilbert, 2005).
CAPABILITY RIGIDITY
Relates to both the internal and external structures and the relationships
of the firm (cf. Hannan and Freeman, 1984).
Addresses HOW company:
✓ Coordinates its innovation activities using specialized R&D teams,
innovation processes, and programmes to manage external alliances
and partnerships
✓ Protects its hierarchy and administrative issues (organizational form).
✓ Sets its organizational boundaries to innovation activities (cf. Zobel and
Hagedoorn, 2018) – which groups of actors are playing an active part in the
innovation.
© Dabrowska, Lopez-Vega, Ritala

8. ORGANIZATIONAL
AMBIDEXTERITY STRUCTURAL
Exploitation and exploration sequential in time
TEMPORAL/SEQUENTIAL
Exploration and exploitation conducted in different units“The ability to simultaneously pursue both
incremental and discontinuous innovation…from
hosting multiple contradictory structures, processes,
and cultures within the same firm”
(Tushman and O’Reilly, 1996, p. 24)
Simply: The ability to explore and exploit
simultaneously
Exploitation: refinement, choice, production,
efficiency, selection, implementation, execution (March,
1991, p. 71)
Exploration: search, variation, risk taking,
experimentation, play, flexibility, discovery,
innovation (March, 1991, p. 71)
CONTEXTUAL
For details: O'Reilly III, C.A. and Tushman, M.L. (2013). Organizational ambidexterity: Past, present, and future. Academy of Management Perspectives, 27(4), pp.324-338.
March, J. G. (1991). Exploration and exploitation in organizational learning. Organization Science, 2(1), pp.71-87.
Exploitation and exploration conducted in the same place
and at the same time

9. OPEN INNOVATION
“A distributed innovation process based on purposively managed
knowledge flows across organizational boundaries, using pecuniary and
non–pecuniary mechanisms in line with company’s business model.”
(Chesbrough and Bogers, 2014, p.27)
Research Development Commercialization
New Market
ResearchorIdea
CurrentMarket
© Dabrowska, Lopez-Vega, Ritala

10. Structural rigidity
OVERCOMING ORGANIZATIONAL
RIGIDITY THROUGH OPEN INNOVATION
In closed innovation, companies rely on in-house R&D, and
unutilized internal ideas and technologies remain confined to
the research labs
Companies continue to experience difficulties when trying to
implement open innovation due to possible:
- Unfitting internal structures and processes (e.g. for external
knowledge search)
- Lack of programmes to manage external alliances and
partnerships
- Lack of specialized R&D/innovation teams for external
knowledge search (e.g. open innovation managers/scouts)
Capability rigidity and ambidextrous
organizing
Capability rigidity can be overcome via the pursuit of
organizational ambidexterity (Gilbert, 2005)
Companies with closed innovation models tend to
handle both exploitation and exploration in-house
Companies with open innovation practices embrace
exploration that draws from both internal and
external knowledge sources (Dahlander and Gann, 2010;
Chesbrough and Bogers, 2014) as well as utilizes exploitation
models that rely on external actors
© Dabrowska, Lopez-Vega, Ritala

11. How mature firms can overcome
organizational rigidity by going through a
transformation to open innovation using
organizational ambidexterity mechanisms...
Open innovation and
organizational
ambidexterity provide
feasible lenses through
which to examine HOW
companies can overcome
the ‘RIGIDITY TRAP’
embedded in long-
standing success.
© Dabrowska, Lopez-Vega, Ritala

12. CASE
BACKGROUND
Source: Swarovski Group. Learn more on the history: https://www.swarovskigroup.com/S/125/history/History.en.html
© Dabrowska, Lopez-Vega, Ritala

13. Swarovski’s open innovation journey
Drivers & change mechanisms
OPEN INNOVATION
NETWORKS
Phase Phase Phase
Change mechanisms
✓ Definition of fields to explore new
technologies (search fields)
✓Creation of centralized open innovation
unit
✓Building relations with cross-industry
partners
✓Developing processes and tools for
external collaboration
Protecting crown jewels
CLOSED INNOVATION
Renewing crown jewels
OPEN INNOVATION
NETWORKS
Tilting the playfield
ECOSYSTEM
ENGAGEMENT
Change mechanisms
✓ Focus areas for exploration and
exploitation with dedicated budget
✓ Empowering independent open
innovation professionals
✓ Training program to build open
innovation culture
✓ New ventures program
Resisting forces for change
o Hierarchical structure
o Closed cultural mindset of employees
o Family business values, deeply rooted in long history of propriety technologies
o Lack of supporting practices in opening up centralized departments
INTERNAL
• Need for reorganization
• Need to identify new technological and
market opportunities
INTERNAL
• Need for reorganization
• Need for more explorative initiatives to identify new
technological and market opportunities
• Need for establishing internal infrastructure for collaborative
knowledge management and innovation
• Innovation process still managed by selected group of people
EXTERNAL
Economic crisis; Competition pressure; Technical advancements;
Market changes; Global trends; Open innovation as new innovation
paradigm
© Dabrowska, Lopez-Vega, Ritala

14. ORGANIZATIONAL INERTIA AT SWAROVSKI
CLOSED
INNOVATION
OPEN INNOVATION
NETWORKS
ECOSYSTEM
ENGAGEMENT
Structural
rigidity
Capability
rigidity
Boundary preserving Boundary spanning Boundary expanding
Static ambidexterity Structural ambidexterity Dynamic ambidexterity
© Dabrowska, Lopez-Vega, Ritala

15. Swarovski’s open innovation journey
Boundary preserving
Proprietary core technologies kept
secure within organizational
boundaries
Static ambidexterity
Perfecting exploitation mechanisms
by focusing on excellence, quality,
and refinement; well-planned
explorative initiatives among
limited set of actors
Boundary spanning
Dedicated unit to increase knowledge
inflows and outflows within defined
search fields for structural spanning
Structural ambidexterity
Exploring and exploiting activities
pursued in structurally separated units
Boundary expanding
Focus areas units to purposive
knowledge inflows and outflows through
permeable boundaries
Dynamic ambidexterity
Exploring and exploiting across
organizational levels, and with external
stakeholders
Protecting crown jewels
CLOSED INNOVATION
Renewing crown jewels
OPEN INNOVATION
Tilting the playfield
ECOSYSTEM ENGAGEMENT
Formal unit
© Dabrowska, Lopez-Vega, Ritala

16. EXAMPLES OF INITIATIVES
© Dabrowska, Lopez-Vega, Ritala
https://bit.ly/3fsobTJ

17. QUESTIONS FOR DISCUSSION
EXAMPLES for self-reflection and/or group discussion
© Dabrowska, Lopez-Vega, Ritala
How to build routines and
capabilities?
How to ensure operational
excellence?
What is the role of innovation
units?
How to protect a competitive
advantage, IPRs and trade
secrets?
How and when can companies
become path-dependent based
on their history?
Can continuous success make
firms miss other opportunities?
Does success attract fierce
direct competitors or new types
of competitors?
What can managers do? What is
the role of senior management?
What can employees do?
What is the role of external actors,
such as other companies,
startups, consultants, universities?
How do companies become
successful and how they protect
their “crown jewels”?
Are there any downsides and
risks of being successful?
How can established companies
avoid the “rigidity trap”?What drives disruption in
today’s business environment?
To what other companies or
industry settings this framework
(phases) could be applied and
why?
How would you initiate open
innovation in rigid organizations
(Sleeping Beauties)?
How to foster open innovation
culture?

18. OTHER RECOMMENDED READING
© Dabrowska, Lopez-Vega, Ritala
o Enkel, E., Bogers, M. and Chesbrough, H., 2020. Exploring open innovation in the digital age: A maturity model and future
research directions. R&D Management, 50(1), pp.161-168.
o Lopez-Vega, H., Tell, F. and Vanhaverbeke, W., 2016. Where and how to search? Search paths in open innovation.
Research Policy, 45(1), pp.125-136.
o Ritala, P., Agouridas, V., Assimakopoulos, D., & Gies, O. 2013. Value creation and capture mechanisms in innovation
ecosystems: a comparative case study. International Journal of Technology Management, 63(3/4), pp. 244-267.
o Mortara, L. and Minshall, T. 2011. How do large multinational companies implement open innovation?
Technovation, 31(10–11), pp. 586–597.
o O'Reilly III, C.A. and Tushman, M.L. 2011. Organizational ambidexterity in action: How managers explore and exploit.
California Management Review, 53(4), pp.5-22.

19. AUTHORS
Postdoctoral Research Fellow
Innovation Management
Justyna.Dabrowska@rmit.edu.au
Justyna Dąbrowska
Assistant Professor
Henry.Lopez@ju.se
Henry Lopez-Vega
Professor of Strategy and Innovation
ritala@lut.fi
Paavo Ritala
Full article available at: https://doi.org/10.1111/radm.12374
Dąbrowska, J., Lopez‐Vega, H. and Ritala, P., 2019. Waking the sleeping beauty: Swarovski’s open innovation journey. R&D Management, 49(5), pp.775-788.
© Dabrowska, Lopez-Vega, Ritala