Making things better
A Philips case study

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Page 3: Culture

Philips 2 Diagram 1The series of meetings and the communication process that was created by Centurion acted as a catalyst and created a framework for thousands of improvement projects by teams at all levels. At Centurion I meetings, task forces were appointed to create sweeping changes on company-wide issues. Managers at the next level made a commitment to improving business performance through ambitious breakthrough projects. Town meetings and team discussions generated a stream of local improvement projects. As a result, thousands of projects to improve business performance were launched....a cascade of initiatives!

What the Centurion project was actually doing was encouraging a cultural shift in the way the organisation operated by encouraging employees to take more responsibility for decision-making at every level - this process is described as ‘empowerment.’ Empowerment is based on the belief that if you allow individuals who are directly involved in production processes to contribute their knowledge and expertise to decision-making, then the results are likely to be much better than if everything is dictated downwards by management. The benefits of such empowerment resulting from Centurion can be highlighted by two examples:

Reducing an order backlog

At a critical point one section of Philips had £20 million worth of overdue orders. This meant many dissatisfied customers. In addition, Philips was faced with cash flow problems as they could not bill their clients. As a result, Philips assembled a project team with members from every department involved in the delivery process. The team appointed an owner for each overdue order, sorted out the immediate problems, looked for causes and found solutions. Delivery reliability improved by 75% after one year.

Shorten development time

The development of a critical new product was seriously behind schedule, so that a year’s delay was expected. At a Centurion meeting the urgency of the situation was recognised and a task force set up. The task force quickly identified key problems and set up cross-functional work groups to solve them. The new product was launched six months ahead of schedule and became a tremendous success!

A number of company-wide issues were identified at Centurion I meetings and these came to shape the focus of areas of company policy. For example, the initiative “Customer First” was set in motion to ensure that all Philips people focused their work on satisfying both internal and external customers of the organisation. Other key initiatives were:

  • Emphasising ease of use as a key feature of all Philips products.
  • Carrying out initiatives to develop the capabilities of managers.
  • Upgrading the Philips image and unifying the “look and feel of its products.”
  • Focusing on dealing with only the best suppliers.
  • Taking positive measures to ensure a smooth cash flow for the business.

Philips | Making things better