In May, Philips formally completed its separation into two companies with the flotation of shares in the newly created lighting business. It learned several critical lessons along the way.
The project took almost two years to complete and involved dividing the 125-year-old company between its original lighting work and the newer healthcare technology divisions.
Speaking at the European HR Directors Summit, Philips chief HR officer Denise Haylor explained that following continued communication about the aims and reasons for the change, it had been completed with employee engagement levels ending at or above pre-announcement levels.
However, Haylor revealed five key elements for other HR leaders to learn from when going through significant change processes:
Embed continuous improvement
“We did make mistakes as we went along. We had continuous improvement – that’s really important.
“You need to be structured and disciplined, but be flexible when you absolutely need to be.
“I used five whys quite a lot. I found it simple and powerful – not to insult people but to get to the root cause.”
One overall commander
“We had one senior person accountable for the whole separation and they knew exactly what they had to do.
“They were accountable, responsible and they had the power too.
“One of my direct reports, one of the work streams he had was the operating model and he told me what to do a lot, which was awkward but he had to be accountable for that.”
Communicate clearly and frequently
“Prioritise topics for the audience and figure out early on what the big problems are going to be. It’s clichéd but important – communicate, communicate, communicate.”
Make the tough decisions early
“Don’t shy away from the tough calls. Whatever you do, don’t shy away from the tough calls, be straight from the top.”
The competition is outside
“And finally, to repeat this one: the competition is outside. It’s not inside Philips, its outside. And while we are trying to shield people as much as we possibly could, we made sure people focused on what was important, which allowed us to progress.”