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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