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Case study

Philips Lighting and Deloitte partner in establishing company identity

The power of co-creation and commitment

Philips Lighting: a company in transition. How to make it clear to the workforce that the renewed firm is different from its founding mother Royal Philips? In assisting the organization to define its identity, Deloitte Consulting embarked on a journey named ‘co-creation’ – a notion that can hardly be overrated, according to Shalini Sarin, SVP HR Manager at Philips Lighting. The result of six months of intensive collaboration: a clear set of core values, a qualitative benchmark and a viral change plan. But most importantly, a lot of energized employees inspired about the future identity of Philips Lighting.

For over 125 years, Philips Lighting has been a leader in the field of lighting. Its move to digital innovative lighting technology and services, makes for a major shift that brings about an organizational transition as well. Margins, Time-To-Market, innovation – from a market perspective everything changes. ‘And we want to continue to be the leader in the industry’, states Shalini Sarin. ‘At the same time we move from products to products, systems and services. This changes the business model as well.’

Due to a split from Royal Philips, which had its origin in lighting over 125 years ago, Philips Lighting is now a separate entity. This called for another organizational transformation. Sarin: ‘There’s no conglomerate we’re a part of anymore. We are independent and have to establish our own identity and way of working, apart from Royal Philips. How could we, in a detailed way, define the already apparent divergent culture? People throughout the organization expressed that the ethos was different; we aspired to define this ethos more clearly and shape it for strategic advantage. Philips lighting wanted to find out what employees value most, and then look at that through a strategic lens in order to make the final choices. Moreover, we were getting listed on the stock exchange. All this created challenges: how do we want to be seen and behave in this new environment? As a stand-alone, this is an absolute opportune time for us to say ‘stop’ and ask ourselves these questions. And to investigate how other companies went through similar transformations.’

Culture comes first

That’s where Philips Lighting engaged with Deloitte Consulting as a partner. A partner to help in establishing the company identity and in formulating purpose statement and values. ‘Deloitte’s team leader Ronald Meijers communicated strongly that culture is not the last thing to talk about’, Sarin says. It’s the first thing. Culture is a part of every structural scenario you’re building. Why are you building these scenario’s, Ronald would ask. Why now? What’s the goal and how important is this? His team – or better: our collective team – had the patience to dance to the tunes of the fluidity. He stuck to his guns and insisted we needed to define a distinctive culture. After all, a 7 billion Euro company can’t do without. This really helped a lot. And so we started the process to define who we are and what we value most.

Culture is a part of every structural scenario you’re building

Bottom-up

For the organization it was paramount that the values and behaviors were co-created with Philips employees all over the world, from corporate offices to factories. Sarin: ‘We’re not taking the elitist approach, where a couple of super intelligent consultants and managers sit in a room and define what the culture of Philips Lighting is going to be. It had to be bottom-up. So we didn’t want Deloitte to impose things, but to co-create it with our people and amplifying the culture that already exists within the organization. There is so much power in this model, even today. One thing was building on the next, and that was made possible by the strong foundation of co-creation.’

How did the project progress? It started with a diagnosis, consisting of interviews with business leaders and stakeholders all over the (international) company. This qualitative research was complemented by a quantitative research methodology from Deloitte, called CulturePath. This tool measures a company’s culture by making use of different kinds of indicators like the willingness to change, cooperation, commitment and courage. Input from senior leadership (interviews, and workshop with top 100) was used to include a number of questions which already gave a steer into a particular direction in regard to possible values. By deploying advanced analytics, Deloitte’s data-specialists used the results from the CulturePath survey to map the main cultural themes of the organization.

Workshops worldwide

After that, the team initiated workshops all over the world. More than 50, designed by Philips Lighting in close cooperation with Deloitte and based on the findings of the survey. They were led by Philips people – always an operational manager in conjunction with an HR representative – who were prepared for their role by Deloitte in a train-the-trainer trajectory. In these workshops, people were presented with multiple questions, focusing on the past (‘what made you proud’, ‘what has made us who we are’), present (‘what are our current ways of working’) and future (‘which characteristics do we need and which actions do we need to take to realize our ambitions’). Sarin: ‘As tools for soliciting input, the interviews and workshops as well as the internal collaboration platform that were activated, generated a lot of insights. Insights that were unequivocal mostly; they were shared by leaders and employees indistinctively. What we learnt was that our people took a lot of pride in being a part of this transforming industry, and in being a game changer. At the same time they felt the need to speed up operational processes and act in a more customer centric way. It struck a good balance between praise and pride on the one hand and criticism on the other.’

‘Working closely together, we clustered and synthesized all data to define Philips Lighting values and behaviors. These outcomes, along with recommendations were sent to the leadership team. For dissemination within the organization, influencers were deployed: a community of volunteers from all levels of the organization. These change agents are helping in getting people tuned, so they can conceptualize the new insights and behaviors in their own setting and start embedding them in their daily activities. ‘In this way the change was brought alive in every aspect of the organization’, says Sarin.

'change was brought alive in every aspect of the organization'

A big anchor

‘Actually, we are still in the embedding phase. This is an iterative process; while you’re implementing, you’re always learning. So we’re not yet ready to formulate manifested benefits. That is yet to come, and will happen when customer centricity will be a reality, not just an aspiration. When we can deliver with agility and speed.

When we will be more result driven in our actions and processes. And when all this has become a part of the way we recruit people, appraise them, develop them, and so on. But one thing is certain: we created a lot of energy around it. Change always happens in four stages: awareness, understanding, accepting and finally, commitment. Now, we’re still in the stage of creating buzz and embracing it. Besides that, we have been able to manage a high-energy transformation process in a turbulent year, avoiding significant hurdles. That is a benefit in itself. People were asked to participate and express their opinions. This could have easily ended up in fragmentation and frustration. But what we did turned out to be a big anchor for people to rely on or get energy from. Their openness to learn and the speed with which they get united around the new core values – it’s inspiring. Never underestimate the power of co-creation and commitment. It’s not important to get it 100 percent right, it’s important to get it 100 percent committed.’

CulturePath

Deloitte’s quantitative cultural research methodology encompasses two sets of indices.
Core indices are fundamental constructs of culture that measure an organization’s cultural tendencies, such as the willingness to change, cooperation vs individuality, control vs innovation. These indices are measured on unique spectrums that capture the strength of the organization’s disposition or tendency to act in ways that are representative of one end of the spectrum or the other. They are referred to as ‘common’ or ‘less common’ perceptions.
Differentiating indices measure characteristics that are related to the achievement of differentiated organizational performance. For example inclusion, commitment or courage: the extent to which people are willing to voice their opinions and dare to take risks. These indices are measured on a normative scale of which the scores can be referred to as being ‘high’ or ‘low’. For these scores, above 80% is high and is considered differentiating for a high performance culture.

More information

Would you like to receive more information about this collaboration between Deloitte and Philips Lighting, please contact Ronald Meijers via +31 (0)88 288 7833.

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