Frans Van Houten, New Philips CEO has Much in Common With The Old Dutch Explorers
Posted by Robert Hargrove
What does the new CEO of Philips, Frans van Houten, have in common with Dutch explorers of the past, such as Henry Hudson who sought to find an easterly passage to Asia, or Willem Janszoon who recorded European landfall on the Australian continent?
These hearty Dutch explorers each pursued an Impossible Dream in service of a cause, even though they didn’t have modern navigation equipment and there was no simple or obvious map to follow.
Mr. Van Houten, who began his first 100 days about four months ago after taking over from a former client of mine, Gerard Kleisterlee, is intent on another Impossible Voyage of Discovery, even though he doesn’t have all the answers when starting out. It involves sailing the 100 year old conglomerate still know as Royal Dutch Philips through new and uncharted waters, marked by blue ocean strategies and game changing innovation, with a culture to match.
When Van Houten became CEO, he found an old portrait of the company founder in the basement of the corporate headquarters. The story goes that the founder went off to Moscow to sell light bulbs to light city streets. He sent back a telegram with an order for 50,000 bulbs. Since it was such a larger order, people at headquarters in Amsterdam assumed it was a mistake and that he meant 5000 bulbs. Van Houten says that the portrait and the story inspire him to think big, to act bold, and to personally make a difference.
Permit me a flashback. I remember landing in Amsterdam not long after Mr. Kleisterlee took over as CEO of Philips to begin an assignment Masterful Coaching had been given, which involved coaching Philips’ top executives. As I drove from the Schiphol Airport toward the city, I ran into a billboard that said “Philips, we make things better.” As this was shortly after the dot com boom, I was frankly shocked by this billboard. We are living at the dawn of a creative economy and age of innovation, and the company’s advertisement is “We make things better.” I thought to myself that here was a company out of step with the times and it was going to be for a rough ride. I tried to get the company to change it, but to no avail.
Now let me fast forward to the present. I had gotten wind of the fact that Philips had a new CEO and decided to study up on him. I was absolutely astonished to hear that Mr. Van Houten was preaching the gospel of disruptive innovation in his first 100 days, while at the same time, making some very tough business decisions which involved big layoffs. The key to it all was creating a new culture and this was something he was headlong engaged in.
Here are a few of the quotes I came across from Mr. Van Houten than impressed me, not to mention the fact that the company slogan had been changed at some point from “We make things better” to “We create better ideas.” Says Mr. Van Houten,“Innovation is our lifeblood and will be the main driver of profitable growth going forward.”
Mr. Van Houten emphasized in a recent speech, where he echoed one of my familiar themes, great companies pursue impossible dreams in services of a cause, and make money at the same time. “Philips has the right portfolio to address key societal issues, such as ageing populations, improving the livability of our cities, promoting healthy lifestyles and a more sustainable world.”
“I intend to drive innovation with more intensity to help us win new customers,” said Mr. Van Houten. “Philips has deep research and engineering competences and we are constantly looking to attract the brightest talent to do amazing things together.”
Three game changers• Develop high technologies that make high quality healthcare without the expense of a hospital bed, driving down the total cost of healthcare.
• LED lighting that turns up the ambiance without turning up the electric bill and promotes sustainability.
• Lifestyle technologies such as luminous wall paper.
Hats off to Mr. Van Houten who recognizes the challenges of getting a big conglomerate to an like an entrepreneurial innovator. His new theme is “accelerate.” (Big companies have pockets of innovation, but are often too slow in getting to market.)
Okay, this sounds all well and good, but Philips is a big company spread out all over the world, and Mr. Van Houten will face a lot of barriers to getting his message through. As a case in point, this past week, my partner in Korea, Dr. Edward Choi, went to visit with the CEO of Philips Korea to talk to him about the new Masterful Coaching program—Game Changers (how to repeatedly create block buster business models, products and services). The Korean CEO said “Game Changer is too big for us here,” (red flag) but please contact our new chairman,” which I am doing.
I hope Mr. Van Houten is smart enough to know that he is going to need help!