Elmar Mock is the Founder of Creaholic, but he began his career as an engineer in a deteriorating watch industry. Elmar approached top-level management within his company with an insane idea, a new way to completely innovate the industry and improve sales. Everyone thought he was crazy and his co-workers distanced themselves from him, but that turned out to be a good thing. Today’s topics include:
● His experience and frustrations as a young inventor in the dying watch industry and the unique mindset he employed.
● Using examples from the natural world he highlights the diverse approaches to innovation, change, and creation.
● Gives constructive advice for those of us pushing for change, within ourselves, the organizations we work for, and the society we live in.
Reviving the Swiss Watch Industry: The Remarkable Story of Swatch
So, This Mark Bidwell, founder of the Innovation Ecosystem. Welcome to the show. I’m very pleased to have me, Elmar Mock, who is founder of Creaholic and inventor of the Swatch. Welcome to the show, Elmar.
So, let’s just start. Who is Elmar Mock? For those in the audience who haven’t heard of you or come across you, how would you answer that question?
So, I would say I’m a serial inventor. I’m active in breakthrough innovation for the last 40 years but basically, originally, I am an engineer.
You’re an engineer and you’re based in Switzerland about an hour south of where we are in Basel at the moment.
Exactly. In Bienne.
In Bienne. Super. Now Elmar, I’d like us to start with the Swatch story, which has defined in many respects, your career. Back in the mid-1980s, you were, by your own description, a frustrated 26-year-old working in a declining industry, the Swiss Watch industry. Can you tell us a little of that? Why were you frustrated and what was your role? Just paint a picture of what was going on back then.
Seamless energy: I decided to become a watch engineer at that time, an industry which was going very bad. It was a very sad time. I received a job by pure coincidence, I would say. It was more — they were supporting young engineers so I was not really have a clear target or clear work. It was a very fascinating time because on one hand, as young engineer, you want to do something and suddenly you don’t know what to do. And, the art of innovation is to use this time to try to find other ways. My second frustration was, I was, like boys, I love games and playing and had a new machine. So, I was looking for a super new machine and I was asking for such an investment without any reason. And that provoked that the general director asked me to come in his office and I have to save my ass so I try not to explain why I want to play. I proposed to him how technology could change the view of a watch and I was very surprised because he was open for that idea and I was supported from my big boss. It was Ernst Thomke. So, he gave me the freedom to start this development of the Swatch.
The context here is very interesting. The company was struggling, the industry was struggling and yet, you went in and asked for 500,000 francs or dollars, a sizeable amount of money back then. I think you said that if they just said no, you might have been shown the door and been on the street looking for a job. How did you feel as you made that pitch? It was obviously a very compelling pitch.
I was in a terrible, stressed situation. It was 11:00 and two hours later, my boss asked me to come in his office. So, exactly two hours to propose something and so I had no market study, no customer journey, nothing. I was simply in a situation where I was forced explain to him my thoughts about the last two years, how watch industry could be different and why I want to have this kind of technology. So, I have to go back to the roots and not to, I would say theoretical explanation and the marketing stuff. I was explaining to him why this kind of technique could change our view about what we think is a watch. I was very stressed and the first half hour was terrible. So, he was asking me if I’m crazy. He was not asking why I wanted to have a machine but he was simply claiming that I have no realism and I don’t understand the situation of our company. So, he was trying to explain to me but I cannot think like that. At the end, he asked me the question, “Why do you want such machine?” and I had the chance to pitch maybe 30 seconds, the reason, and he was open.
What did you say in those 30 seconds?
I made sketches. I made, with my friend, Chuck Miller, a sketch in an hour, like kid’s sketches on millimeter paper, explaining how such product could look, without claiming that we want to do it. Simply to explain that we can change. The surprise was that the boss was looking. What I was always surprised for the last years when I was working with the industry, the real owner or those who have the responsibility for the long term want to see something different. It’s normally the middle management and the organization who tried to kill everything who’s knocking the tradition.
Interesting. That’s a hugely important insight, I guess, as you go out and work with organizations today, are these client organizations actually serious about this or not? That was obviously a very, very powerful lesson all those years ago.
It’s a big difficulty how you go to the client, why the client would want to change now. The normal organization is focused on renovation, making what is today difficult but possible tomorrow morning. The target of innovation is to make the impossible, possible. It is how can we imagine something will happen in one week or in one month and not tomorrow morning? It’s a stress in the organization because on one hand, you have to save agility. You have to say to your actual customer. You have to give an answer to the request from today, but this is renovation. It’s not innovation.
Back then, the innovation there, if I get it right, it was to create a cheap, high-quality product very, very quickly as well, in the context of the declining industry. So, certainly, it wasn’t a renovation. It was an enormous innovation is what you’re proposing, right?
Yeah. But, we were trying to change the view of how you see a watch, normally. The watch is in reality, a mechanical movement and quite complex mechanical life which is packed in a case. What we proposed was to change this view and to modify the way how we can imagine making a watch and using injection molding, using polymer material to have the possibility to reuse drastically the number of pieces and drastically the cost, and to keep high quality. But, we have no clue at that moment exactly how do it. I wasn’t simply claiming, “Look, with this kind of thing, we could imagine,” and every normal engineer, every normal watchmaker at that time would simply say, “Forget it. It’s impossible.”
So, as you said, you were very stressed in the meeting, but as I should imagined when they said, “Yes. Go off and do it. Here’s the money.” Your stress levels didn’t decline because then, you have to go off and do something about it, right?
After the meeting, I don’t have a clue if I were successful or not. I went back to my friend with a feeling we will be kicked off out of the company in the coming months. So, I don’t have any positive feelings after the meeting. The surprise was, that the director of development, who I never met before because I was so low in the leadership, he came to us and then said, “Are you crazy enough to go to the big boss with a project that was never discussed with something that is impossible. We don’t know about it. Are you crazy? It’s not a drawing. It’s not a kid’s thing. “Okay. You want to play? You want to laugh? Okay. You have exactly 6 months.” I stopped all the other projects, and I proved what you are discussing. So, in challenges, in quite a negative point saying, “Probably, if you’re not able, you quit the company.” And my friend and I, we lose all our actual projects. We were alone and everyone was taking distance from us. Because at that time, we had fired 4,000 people in four years, and every month people were fired. So, the risk was very high and everyone was thinking “If we work with these 2 guys, we would lose our job.” So, we were totally alone and that was a big chance. Because, if I had too big of a group, it’s difficult to move fast, and we received the support of the top management. So, it was incredible power to go ahead as fast as possible.
And over those 2 years, obviously, we haven’t got the time to go through the details, but I mean I would imagine a lot of the methodologies that you’ve developed and your approach form the basis of how you go about doing this kind of work since then, for Creaholic. Is that fair to say?
It’s halfway there. Basically, we were reacting very naturally and the very natural instinct for an innovator is move in a nonlinear way, to go from concepts to know-how back to concept, to request that your concept, to relook for new know-how, to change the concept again. And that’s a very natural phenomenon by Edison that existed 2000 years ago. But, it was described theoretical only in the 1890s. The reason why I wrote the book using the Swatch example is to show how it is, because the big problem of an organization, an organization is used to have a linear process with target, budget, time schedule, which is absolutely correct if you want to go fast to modify something or to know how to do it. But, if you don’t know what you want and you don’t know how to do it, this linear process goes to a dead end. So, you have to have another kind of process and this process is a very natural process by artists, very natural by creative people, very natural by inventors, but it’s not understood for organization. So, what’s important in the organization is that the process is different but it is a process. It’s a nonlinear one and the dance is not to transmit a dossier for one department to another department. So, the team who’s working in a mental situation of conceptual work, and then the research for the solution, which you don’t know, out of your field, not trying to drill deeper on what you know, but trying to discover how the other has solved that kind of problem in the past or how the nature has solved this kind of problem, or how artists have solved this kind of problem. So, looking at it in a totally different way and try to find your way. I would say innovation is like a labyrinth with a lot of potential exits and you don’t know which one is the right one
And lots of impasses, as well, I would imagine
With a lot of dead ends. With a lot of possibilities and you know what you want to start to do but you don’t know where you’ll end it. To reach the target is not to reach the point you defined at the beginning. It is to reach the right exit that can bring you to success.
So, let’s talk about this. Let’s just wrap up the Swatch story now and then we can get back into that. The endpoint of this, many people will know the story. Can you just characterize how did the project end from your perspective?
Absolutely. For me, it’s a missed success. If you see the start target we had. It was to increase our market presence, increase our market shares in a development market of watches, and proposing Swiss product, high quality product, with a low cost. What we made again in the end —
Five millions in sales, I think you had. You thought the product would last for 5 years, is that correct?
That was our target. We were thinking that, totally, after 5 years, the product will disappear and we will make a maximum of 5 million sales.
But something else happened, didn’t it?
No, it did not happen like that. It was more than 600 million and it’s now for more than 30 years in the market. That was not expected.
Six hundred million units, 30 years on the market, and what? Seven or eight billion dollars of earnings for the Swatch group, something like that?
Something like 7-8 billion, I would say, cash flow.
And transformed the watch industry. I mean, reversed what many people were saying was a terminal decline, right?
I’m not sure. I’m not sure. No. I think it was a perfect situation. In reality, I’m totally surprised that Swatch still exists, because it’s for sale, a technology for sale. It’s an old story. It’s still good but why is it that they never have tried to go more in that direction? They were going exactly in the reverse direction. Today, watch industry in Switzerland is a luxury industry – very high priced, very complex mechanics and more and more mechanic system. I’m not sure that’s the right way for the future. What we were trying to do is not what the watch industry is doing today. So, the name watch has changed. Maybe the money gave the power to redevelop other stories, but for me, it’s a dead end.
And I think you’ve appeared on CNN. You were interviewed after the launch of the Apple Watch and you raised some questions about how the Swiss industry should be responding to that kind of threat.
I’m not in charge of the Swiss watch industry. I can only observe as inventor. I will say the world has changed fundamentally. The world in the 20th century was the world organized around coordination. You had an agenda, a time schedule, and I would say the rhythm of the day was prepared or was written down. A new story was introduced by Nokia in the end of 1990s, was connecting people, and this ability to connect people, make that you have today jazz music, you move slightly your appointment, you change maybe the place you are going, you adapt yourself, and that meant that you cannot anymore consider that time is the only reference for the organization of the day. Communication and time are collaborative. Of course, you still have a certain level of organization but the communication has introduced a new flexibility. So, the modern smart phone, for me, are the pocket watch for the 19th century. It took time for the wrist watch to replace the pocket watch. It was the middle of the 1930, so, it was more than 30 years that was needed to change the habit. For me, the target is to have more elegance and to reduce the need to take out your very heavy smartphone out of your pocket or your computer, and you want to have something more flexible, and this is clearly coming. For me, it’s a new way to have an instrument that will help to organize your day because the watch is not a luxury product. It doesn’t give use of time. It helps you to organize your day and to be as efficient as possible and to imagine that this is free of connection, is for me non-objective.
Absolutely. So, you then left and you did some more work in the Swiss watch industry. I think you founded the Rock watch and then you founded Creaholic. Can you say a little a bit about the name and then what do you say to people about what does Creaholic do? But let’s start with the name of the organization.
The name Creaholic is to say you must be a “holic” to go in that direction. So, it’s a passion problem. It’s a positive holic. It’s not a negative one.
Not alcoholic or sexaholic?
No. It’s a positive holic because I think you must be fascinated and you must be engaged, totally, in what you’re doing. This is a positive addiction and the positive addiction is to be sure that you are able to make the day after tomorrow different than today. This addiction is positive. So, why did I use this name? Of course, creativity is not innovation but it’s maybe the mistake I did at that time. So, creativity is only the first phase because innovation is giving birth, and creativity I would say, is making love. So, you have to go through the reality. The really difficult problem is not having idea. The difficult problem, I think is bringing things to life.
This is excellent because you’re in Switzerland, as I am. You work with a lot of global leaders that many of our listeners would be familiar with, companies like Nestle, companies like Tetra Pak, who are dominant in their industries. They redefined, in many respects, their entire segments. Now, how easy is it, based on your experience, to actually drive innovation in these organizations? I look at Tetra Pak. Their core technology, which was founded in the ’60s and the ’70s, is it realistic for large established incumbents that enjoy lots of market share in their organizations? Is it realistic for them to transform themselves through the kind of innovation that you’ve experienced?
No. Nothing is easy, but you know, in life, nothing is easy. I would say we have, sometimes, people are using complex images. I will use a very simple one. If you’re in a competition, what do you want to be? The Olympic champion or pregnant? So, bringing life, making a new product, it’s being pregnant. It’s trying to find a way. It taking energy and reducing your agility. Now, most of the companies are organized on short term and looks for agility and want to be Olympic champions. But how could you be pregnant in eight months and be Olympic champion? So, the mammal example is an excellent example of how life has a contradiction, how to survive in a short time, and how to give life in a long time. So, most organizations are focused on short time surviving and agility and success, which is very important. Never lose that.
Elmar, is that true for the non-public companies of which there are a number in Switzerland, like Tetra Pak, which don’t necessarily have the burdens of reporting to Wall Street or shareholders? Do you think that all organizations tend to be far too short term in your mind?
No. But I want to explain. I was not going to the end of my explanation. Life is not only mammals. So, mammal is one example but you have frogs and frogs, for example, make thousands of eggs and only one survives from the thousands. But, you have birds, and I think, Europe, we have used mostly the bird as example, how birds are living. It’s incredible. Birds are fantastic killing machines. They can fly, they can eat a mosquito by flying, they are agile. But, they have to survive and they never fly with eggs. They separate, totally, the activity of innovation and the activity of agility. So, this is an excellent way on how nature can show us solutions. I would say the U.S. example was a mammal making babies in glass. So, startups are nothing more but in vitro life but startup model goes for the principle that mammal female will adopt this young baby who was growing inside the glass, and the startup market depends on the adoption of big companies on small startup. That is one model. But, in Europe, it was much more difficult to accept another culture. It’s much more difficult to accept change. But I think in U.S., in traditional industries is as difficult as it is in Europe. So, the example of Swatch, the example of Nestle, is nesting. Nespresso was nesting. Do you think that Nescafe was open to Nespresso? No. They were trying to kill this idea.
It wasn’t allowed in the board room for many years, as well, even though it was successful, right?
But, it was decided for the top of the company and they gave the energy and they decided to allow this life. Exactly like in Swatch. It was decided by the top of the company. All of the organization, again. Please don’t forget that, to have a baby, first the brain want to have a baby. So, the most important sex organ of a mammal is the brain of the female. If she doesn’t want, she will not have. The second element, of course, you need a capability to grow life. But the antibody, the rest of the body of the female wants to kill what is not exactly in the genetics. So, the big problem of all organizations, small and large, is the people in place. They want to save the mammal and they don’t want to accept foreign genetics, and new ideas are always foreign genetics. So, you have a different way and I think nesting is an incredible potential, which is not explained enough, and we live in Creaholic for the last 13 years in this nesting idea, because we are living in a country and in a continent which is much more open for nesting than for adoption.
Which companies do you see out there that are doing this really well?
We gave some examples but I think we have famous example. For example, 3M was excellent. I think for a certain time being, I don’t have the actual situation but DuPont was also making excellent nesting. You have people like Nestle, who was making excellent nesting. So, we have several examples. I’m not a professor. I’m not studying the rest of the industry. I’m working with companies making that, and I can tell you that I have several examples with my client that nesting can function. But, for that, you need not the adoption of the middle management. You need adoption of the top management and use in a way of collaboration, of co-existence. Because it’s not by changing all the actual organization in the innovative, in organization, that you will change a thing because you have to be agile. You have to survive in the short term. So, you have the complexity that you have to live in parallel with both. But, you have to organize the system in a different way and you have a different way of — I would say the process acceptance must be different. But, the pressure must exist.
What advice would you have? A lot of our listeners, we have executives and we have people leading innovation programs trying to grow their topline because of the short term demands and a bit. But, we also have what I call “intrapreneurs”, so more, maybe, from the millennial generation, who are in these large organizations wrestling — maybe frustrated as you were back in the mid ’80s, wrestling with how can I actually make a difference and how can they have an impact beyond their job description? What kind of advice would you have for those individuals, based on your experience back then, but also what you see getting in the way of people’s efforts?
Maybe I’ll start with the word entrepreneur. I like the name, in one sense, but I hate the title because entrepreneur is like to be a saint. It’s postmortem. You will not have the target. It’s a reserve, and money is not the target. It’s a reserve. So, the focus should be what is the disturbing factor? What disturbs the society? What will change tomorrow? How can I go in a direction that I can give something positive for? The client of my client or the user. You want to make something positive for the user. Because fun, pleasure is based on solving problems, proposing something, making life better, easier, more comfortable. If you focus on entrepreneurial — I want to organize, I want to be a boss, I want to have money. It’s the wrong direction.
But for someone with energy around wanting to make a difference from within a large organization, irrespective of the language we use, but people who actually do want to put a dent in the universe?
Very simple. Never do what you don’t trust yourself deeply. Don’t forget that you only have five bullets in your gun. You can only, five times in your life, to try to change something seriously because to make a real project needs 5 to 10 years until it’s successful. So, you cannot shoot every day. You have to deeply convince yourself. Secondly, you have to convince other people. If you are not able to convince others to prove that, maybe your idea is not so good. And you must accept that maybe your idea was not so good and requested you, because you must really grow in the project when you have convinced that you are in the right direction, and you can convince others, and you must take a risk. What is taking a risk? It’s not only the risk of money. It’s risking 10 years of your life, it’s risking your career, it’s risking yourself. Are you ready to spend 20% of your potential life energy on this idea? And if you’re not, don’t do it. If you are, do it.
Wonderful. And you mentioned, your five bullets, obviously — just interested, what were your other bullets? Swatch, obviously, was great bullet. Very exciting. What other bullets have you had?
I was a very lucky man. Maybe I have 10 in my gun per coincidence, but I don’t have 100. So, Swatch was example. Rock watch was an example but Creaholic is my most important baby. I’m much more proud for Creaholic than from Swatch, for example. Because it’s how to organize creative people, how to reduce the feeling of injustice in a team, how to bring a team to repeat innovation. Today, the team was working, so a part of the bullet, our team’s bullet, today. As team, we have more bullets. So, the organization is not to play along, it’s to use the other. For example, we make a solution like how we can weld bone, how we can weld wood, how can we make micro engine, how can we save water, how can we recover energy. There are several projects you can find if you go in creaholic.com. You’ll find a lot of examples. They are not all my own babies, but I will say, they are babies of my friends and I hope I was helping in that. But, myself, I know that the next five years, I will be focused on one main project with a new kind of shower and a new way of saving water, a new kind of bringing luxury. That is my personal next challenge. Maybe my last one, because at my age, I cannot change. I have always the feeling I’m young. It’s not the case.
They say you’re only old when you have more regrets than dreams and it sounds like you’ve got a lot of dreams left in you.
I still have a lot of dreams. Yes.
I’m just going to begin to wrap up. This is Mark Bidwell on the Innovation Ecosystem. I’ve got Elmar Mock with me. Elmar, you touched on what you’re excited about today, which is your new project. We’ll put all of these in the show notes for our listeners. Where can people get in touch with you? Before we cover the last 3 questions, where can people get in touch with you?
That’s very easy. My mail is email@example.com and if you go by creaholic.com, you will find my team. You will find myself and my life is around Creaholic.
Super, and you also run events. I saw you have a great event in Geneva a few weeks ago. If there’s anyone listening who’s in the area and there’s some upcoming events.
I make keynotes, I make workshops. I try to introduce — I made a book about innovations. So, Innovation Factory is in English, in German, and in French. It will come soon in Chinese. And I make keynotes to try to explain more deeply and I make workshops, I would say, to feel a little bit. Because a workshop is only a small moment. It’s trying to discover how you can go. But, in reality, you don’t solve problems in a short time. You don’t have ideas in a short time. It’s always work. We work together, so we are, as team Creaholic, working for companies, working for people, and that is our main target. But, we change always. We always move around and we discover new — not a lot of new fields and that is the power of innovation. It’s not drilling deeper in what you know, it’s discovering what you don’t know, and that makes life so fantastic and with so much passion to discover what you can imagine what you did not know before.
Your passion comes through on these interviews and we’ll put all these materials in the show notes. So, I sent to you, Elmar, three questions before we met today. First question, what have you changed your mind about, recently?
My mind is never crystallized. But, what is interesting is, your mind has an evolution and you change due to display. You change concept, you think differently and you move progressively. You don’t go back. In life, you’re never going back. You go forward and by going forward, you changed slightly. So you don’t make big changes, but you change your mind automatically. My mind is really that today. A team is not only technocrastic, it’s technosophic. If you don’t have an idea about, I would say, dreams, what is maybe more art, is so important but if you don’t understand business, long term, you have no chance. You have to make an evolution in the acts of art, dream, in the art of technosophy, which is not techonocrasy, the fascination of the other way of solving things. But, also, why do people have the reason to exchange things together? What is business? Business is simply exchanging between humans, helping the other one. So, I always move in the area and I hope I increased my understanding over the last years, and so, automatically, I change my mind. But it’s not a 90 degree movement. The force is to have a certain direction and to change in what you think is the right way to go. And you don’t know the end. I explained to you. It’s a labyrinth. In this labyrinth, you go back but you go and you won’t stay because you try to find another exit and you try to find the right exit. But, you don’t change fundamentally, the main target.
Okay. Second question. What do you do to remain creative and innovative? Where do you get your life force to continue to be so passionate about the subject?
It’s very strange. I like television, I like to discover the world, I like to travel, I like to discover people, I like to have no stability. I am, in reality, a nomad. My house is not built. I’m moving and trying to find better grass for my animals. So, I don’t know what tomorrow will be and I enjoy every new discovery.
So, it sounds you’re very comfortable with ambiguity and uncertainty?
Yes. Probably, it’s due my nature. It’s like that. I’m not looking for stability. I’m looking for discovering new and have a lot of pleasure. I’m probably a very strange guy.
It’s interesting. A lot of people we interviewed in the first series point to diversity of relationships, of experience, of thinking, of mental models to stimulate their creativity and their innovation engine if you like. So, it’s this innate curiosity, I guess, is how I’d characterize this.
Curiosity is the keyword.
Okay. Third question.
Maybe you can explain that. I am very dyslexic from when I was a baby so I use 11 years to complete my 9 year school. I repeat twice some of my classes. I was such a bad student. Because, for me, it was impossible to understand what is correct and what’s not. In reality, it was an advantage at the end. It’s handicap at the beginning. To not know what is right makes you accept that what you think is maybe not correct and you try to adapt into reality. So, this half blind situation is a help. So you have to touch, you have to feel, you have to convince yourself to agree on something. This handicap has probably forged my mentality.
Yup. Okay, third question. To what would you attribute your success in life?
Oh, I have success? I didn’t know. Success is not money. Success, really, I go every day to work with pleasure. I was able to find a way. I have team. I have a group, family member, basically. My family is important in all sense of the name “family”.
Okay. I’m struck by the Warren Buffett, title of his book, “Tap Dancing to Work”, which might apply to you.
You now, in German, we say understanding is kept in your hand. It’s take a glass in your hand. Touch the thing, experiment, discover yourself. Don’t trust the other one. Ask your questions and enjoy everything you can find which surprises you. Look for the surprise and there are surprises everywhere.
Well. Yeah. That’s good advice. Well, Elmar. It’s been a great pleasure having you on the show today. I’m sure our audience enjoyed it as much I did. Thank you very much for your time.
Thank you, and see you soon.
What Was Covered
- 02:55 – Who is Elmar?
- 05:10 – Elmar decided to pitch the watch company he was working for an innovative idea. To his surprise, they said yes.
- 08:05 – The point of innovation is to make the impossible, possible.
- 10:50 – The watch company and the industry were suffering. They had let go 4,000 people in four years. No one wanted to associate themselves with Elmar and his friend.
- 14:25 – Did Elmar succeed? How did the project end?
- 18:45 – How did Elmar come up with the name Creaholic?
- 20:15 – How easy is to drive innovation in an organization?
- 27:05 – Elmar explains why he hates the ‘intrapreneur’ title.
- 33:20 – What has Elmar changed his mind about recently?
- 35:25 – What does Elmar do to remain creative?
- 37:35 – What does Elmar attribute his success to in life?
[Tweet “I was explaining to him why this kind of technique could change our view about what we think is a watch. He asked me if I’m crazy.”] [Tweet “Normal organizations are focused on renovation, the target of innovation is to make the impossible, possible.”] [Tweet “Innovation is like a labyrinth with a lot of potential exits and you don’t know which one is the right one”] [Tweet “Are you ready to spend 20% of your potential life energy on this idea?”]
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