Dutch powerhouse Philips, is for many, a household name. A strongly diversified company, they work across three different sectors; healthcare, consumer lifestyle and lighting, priding themselves on being an adaptable company capable of handling the most wide-ranging projects. They recently became responsible for lighting up the Buenos Aires skyline, a city with a population of more than thirteen-million people.
At the FP&A Innovation Summit in Hong Kong, we were lucky enough to hear from Dan Piries, Financial Director of the Asia Automotive Lighting Business. With over 10 years experience in a multinational and dynamic environment, it was really interesting to hear his insights on the future of Philips’s FP&A function.
Some of the stats Dan threw at us thoroughout his presentation were staggering and made their adventurous target of touching the lives of three billion people by 2025 a real and feasible objective. For example, their brand is estimated to be worth in the region of $9.1 billion dollars and currently they employee around 115,000 people in over 100 countries. A truly global brand, they want to become the best place in the world to work and deliver superior value for their customers and shareholders.
In 2011, in the face of new challenges, they set about embarking on a program that would allow for increased agility throughout the organisation and a more customer centric approach. The initiative is called the ‘Accelerate Program’ and has been in motion for three years. As a method for reshaping their FP&A processes, it recognises their need to adapt and innovate.
At Philips’s they know that they are a global organisation that has success at its heart. They have a highly valued global brand, many quality businesses and products all of which have an excellent reputation for innovation. However, they are also fully aware that these plus-points could be negated if they fail to become less bureaucratic, agile and transparent. Increased bureaucracy naturally leads to empowered teams that are capable of delivering end-to-end innovations to their customers. If achieved, it should set the foundations for Philips’s bright future, one in which they ultimately fulfil their potential.
The need for these changes is not born out of desperation, the financial function at Philips is widely regarded as one the strongest divisions within their organisation. Having said that, Dan feels that the division has the capacity to develop even further so that it becomes a more efficient unit that uses a more centralised approach to work and makes better use of IT solutions. They also want to become more cost effective and rely on more standardised, consistent data.
This new centralised approach takes the shape of ‘Centres Of Expertise’ that sees the financial function concentrated so that expertise can be fostered. All of these departments have been subjected to an implementation process. For example, the Talent Management function was developed so that a new career model was embedded into their talent management function. Other functions that have developed over the same three-year timeframe include the Organisational Model, Enables and Communication and Change Management.
This centralised process has allowed them to learn a lot of new things, which they have now been able to address and implement; these have included the importance of communication and that rigid standardisation is possible and required for a successful FP&A function.
Philips certainly have the right mind-set, improve whilst you’re not in disarray. Compared to some of the other companies we have looked at, Philips still represents an innovative, modern company that is now working at the height of its powers, as an effective, centralised FP&A function. As an important cog in their development and advancement, Dan Piries, is sure to have an exciting role to play in their continued success.