Leadership Strategy at Philips

This past week I was in Amsterdam.  I had the privilege of being part of one of the longest running leadership development programs that I am aware of – the Philips Octagon program.  This leadership program has been running for more than 30 years. In 2011, the program received an excellence in practice award from the European Foundation for Management Development (EFMD).

The program combines the development of both business and leadership skills.  Participants are top leadership prospects at Philips.  During the 3 module – 3 continent program, participants prepare new business proposals which are presented to members of the Philips board .  In the past many of these proposals have been the inspiration for the launch of new businesses at Philips.

The current group of 24 top leadership prospects was finishing its program in Amsterdam after previous sessions in Philadelphia and Moscow.  On Wednesday morning, the group had the opportunity to listen to the Philips CEO, Frans van Houten.  The focus of his talk was on leadership and organizational culture.

I spoke to the group immediately after the session with Frans van Houten on the topic of leadership strategy.  Managers of companies throughout the world are well trained to put together business strategies.  They know how to analyze market and product opportunities.  They can put together project plans, calculate costs and estimate returns on investment.  This is all part of normal business practice.  But does anyone know how to put a leadership strategy together?

Leadership strategy has many components.  First is the issue of capacity.  Is the leadership in place to actually implement the foreseen business strategy.  Very often great plans fail, because that capability is not in place.  A second aspect of leadership strategy has to do with mental mindsets.  If you are proposing something new, very often the new way will require a new mindset.  For example, if as a manufacturer you are used to only delivering hardware, a shift to a a service mentality – where most of the profit comes from the comprehensive services provided with the hardware – can prove to be a major challenge.  Finally there is the issue of individual leadership. This is where leaders look into the mirror.  In leading this change, do I have the passion, skills and resilience to make this happen?

I asked the 24 Octagon participants if they had ever put a leadership strategy together for any of the business plans that they had crafted.  The answer was as expected.  None of them had ever done so.  Yet if the success of a business proposition is so dependent on having the right leadership in place, why is this not part of normal business practice?

“Leadership is the ability to do, not the ability to state”  Paul von Ringelheim – sculptor

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Over 200 leaders explore growth in family owned businesses

This past week I attended the 14th Annual Conference for Family Businesses hosted by the University of Witten/Herdecke on February 10th and 11th. Approximately 250 people were present representing some of the most powerful family businesses in the German speaking world. Not only was I able to attend, but I had the privilege to facilitate a dialogue session that included all conference participants.

Family businesses form the backbone of the German economy. The top 500 owned family businesses employ 4.5 Million people in Germany and have a  total sales volume  of 900 billion Euros. These family companies have done considerably better than publicly traded companies. During the period of 2006 to 2010, they increased employment by 11% while the DAX publicly traded companies only added 2%.

Family-owned businesses answer to a different rhythym than publicly traded companies. They are often not under the pressure to produce quarterly results, but can take a longer term perspective. They also tend to pay more attention to issues such as values and organizational culture.

Some of these family-owned businesses have been around for a long time. In 1668 Friederich Jacob Merck began a pharmacy in the city of Darmstadt.  These were the beginnings of what is now a multibillion Euro pharmaceutical company – Merck KGaA – the oldest pharmaceutical company in the world. It is still owned by the family.  The US company with the name Merck, Sharpe and Dohme – one of the largest pharmaceutical companies in the world – was once the US subsidiary of Merck KGaA but became an independent entity during World War I.

The dialogue I facilitated included all 250 participants at the conference. It brought participants in conversation around the key questions surrounding the theme of the conference – “Growth”. What does it mean to grow sustainably? How do you know when growth represents a danger to the company? Can growth affect the nature of the family business? How does the family need to grow to keep up with the growth of the business? What internal organizational growth is necessary in order to take advantage of new markets? Where does personal growth fit in this overall picture?

To prepare for this dialogue, I had interviews with Professor Dr. Rudolf Wimmer who gave the initial keynote address as well as interviews with several CEOs running family businesses – including Jon Baumhauer, the current CEO of Merck KGaA. The dialogue ran for three hours and was rated one of the highlights of the conference.

The University of Witten/Herdecke invited Jeffrey Beeson to hold a World Café about growth and Leadership

Leadership Catalyst Jeffrey Beeson and Caroline Schürenkrämer – memeber of the organizational team of "Faszination Wachstum", 14. congress for family businessJeffrey Beeson from Entheos hosted the 14. issue of the congress "Faszination Wachstum"

 

 

 

 

 

 

 

 

 

 

 

 

 

“Without continual growth and progress, such words as improvement,

achievement, and success have no meaning.”

  Benjamin Franklin