Whatever size and whatever sector your business may be in, there are powerful leadership takeaways from the impressive Philips journey. It was a joy for us at Intelligent Management to read an interview with Frans van Houten, CEO of Royal Philips (over 80,000 employees worldwide) and to discover how much it mirrors the work we are doing with our own clients. Van Houten has implemented exactly the kind of transformation we are helping companies to make: transitioning from being simple “suppliers” to become providers of systemic, integrated solutions that are unrivalled in the market place. We can’t take the merit of Philips’ success, but we do have a precise method. Our focus is helping companies take a leap ahead in their performance, organizationally, operationally and financially, by leveraging systems science.
In essence, van Houten’s approach is systemic. He understands deeply the interconnections among customers and suppliers and the need to shift relationships away from transactional to partnerships.
20 Leadership takeaways
We have chosen 20 highlights from van Houten’s interview we believe all companies should take to heart. Points 11-20 will follow in Part Two of this post. If you are a company leader with the responsibility and authority to make real change, please read through these leadership points. If they resonate with you, we invite you to contact us to find out how to adopt these changes operationally in your own company.
- Be transparent
“You need to take people along with you, and to communicate, otherwise you are a closed box and no one understands you. I believe in transparency.”
We would add that transparency is a mindset and a value. Operationally, your organization can achieve this beyond lip service through a thorough mapping out of your processes and how they interconnect and by allowing internal and external communication that reflects transparency not just as a value but as a day-to-day practice.
- Be a “solutions company”
“Today I would characterize Philips as a solutions company, bringing together systems, products, services and informatics in order to promote better healthcare systems.”
This is a major shift that all companies need to make to be competitive today. It is about understanding how to provide not just products or services but real solutions for the market. Achieving this starts with the ability to frame problems effectively and to ask the right questions. There are systemic thinking skills that you can learn and apply. Deciding to do this can be one of the most game-changing experiences for any company.
- Co-create with customers
This is connected with transparency. Once again, it is a matter of mindset. It requires the ability to create a real relationship with a customer. As van Houten puts it, “We don’t mind people peeking into the Philips kitchen. We do a lot of co-creating with customers.”
Adopting this kind of openness with customers will allow your company to “get much deeper into the real needs that must be solved.” Inevitably, your customers will buy in much more readily if they perceive that their real needs are being heard. Over the years, we have honed a precise protocol for building this kind of relationship
- Have a clear purpose.
In the case of Philips, they clearly see their purpose connected with health care that is accessible, affordable and that leads to better health outcomes. Whatever sector your company belongs to, if you are able to define a purpose that is not a slogan but that truly connects with a greater goal for all stakeholders, then you will have a much more effective way of keeping all team members focused and aligned. Once again, this goes back to the ability to correctly frame the problems that your company addresses and how this fits into a much bigger picture. Without learning to think systemically, this is almost impossible.
- Provide integrated solutions for your customers
Philips sees that health care needs to be better integrated and not siloed. This is true of any industry. The problem is that not all companies have achieved this awareness yet. Philips addresses this through their technology and through acquisitions: “Doing acquisitions helps us come up with more comprehensive, integrated solutions.”
Even if acquisitions are not an economic possibility for your company, nothing is stopping you from applying systemic thinking and designing your products and services as integrated solutions rather than piecemeal offerings that only partially address your customer’s needs.
- Become a partner instead of a supplier
There are huge opportunities for those companies who are able to make the transition, cognitively and operationally, from being just a “supplier” to becoming a “partner”. Once again, this is a highly systemic approach that sees beyond the traditional box that being a “just a supplier” implies. Suppliers can be replaced, often simply on the basis of price. Partners, instead, are an integral part of operations.
- Move from the transactional to a relationship for transformation
As van Housten puts it, “We want to move from the transactional to a relationship where we are standing together shoulder to shoulder and working towards a transformation.”
What does this mean in practice? A supplier is someone who produces an invoice for a product or service delivered. This is purely transactional. A partner is someone who dedicates time and resources to solving problems and who has a positive impact on a customer far beyond the simple fulfilment of a purchase.
- Take your time
There are no quick fixes. Building partnerships and transformation takes time. In our experience, the Thinking Processes from the Theory of Constraints can greatly accelerate the path of transformation by identifying all the necessary steps and by providing a means to overcome the inevitable human hurdles that are part of a journey of change.
- Embrace the way digital technology changes processes, systems and ways of working
For Philips, the increase in telehealth has become an opportunity to help health care providers face new technologies.
Today, there is no sector that can ignore digitization. This is an opportunity for all companies to redesign and improve their own processes and ways of working. This will inevitably benefit customers. It may even spur technological innovations that no other supplier has thought of.
- Foster collaborations
“To change healthcare we need to go across all the silos of the professions. We need to foster collaborations.”
Meaningful change in any sector cannot take place without collaboration beyond silos. Companies must overcome their own, internal silos in order to improve performance and provide a smoother experience for their customers. You can achieve this by understanding your company as a system – a network of interdependent components that work together to achieve a common goal – and by operating it accordingly. Through a collaborative, partnership type of relationship, you will also have a greater chance of interacting productively with your customer in spite of their silos.
These highlights from the Philips journey are not simply inspirational. They can all be achieved by any company willing to make the effort to challenge their current way of operating to improve performance. If you are a company leader with the responsibility and authority to make real change, and the above points resonated with you, we invite you to make 2022 the year you take a real leap in performance. Contact us to find out how to adopt these changes operationally in your own company.
See Part Two of this post here: https://www.intelligentmanagement.ws/20-leadership-takeaways-todays-scenario-part-two/
Intelligent Management works with decision makers with the authority and responsibility to make meaningful change. We have helped dozens of organizations to adopt a systemic approach to manage complexity and radically improve performance and growth for 25 years through our Decalogue management methodology. The Network of Projects organization design we developed is supported by our Ess3ntial software for multi-project finite scheduling based on the Critical Chain algorithm.
See our latest books Moving the Chains: An Operational Solution for Embracing Complexity in the Digital Age by our Founder Dr. Domenico Lepore, The Human Constraint – a digital business novel that has sold in 43 countries so far by Dr. Angela Montgomery and ‘Quality, Involvement, Flow: The Systemic Organization’ from CRC Press, New York by Dr. Domenico Lepore, Dr. .Angela Montgomery and Dr. Giovanni Siepe.