Image via WikipediaIt is easy to sit in a business school or in the pub and talk about top politicians and business people making the wrong call but it is so very difficult to make the calls and then make everyone follow.
CU Entrepreneurs put on a great talk by Philips and it was well worth braving the cold weather. Philips started up over one hundred years ago selling electric light bulbs and the first big order came from the Tsar in Moscow. To remain a world leader for all those years, remember how many companies dissapear from the FTSE100 over each decade let alone century, and you can see how well they have done. Philips used to be big in Cambridge but most of their major sites are now covered in houses.
Now they have decided to re-invent themselves and have identified that there are two key business areas: exiting businesses and new business and they are like chalk and cheese. The major lesson is do not try to incubate a new business in an existing business. They have looked at other major international companies to see what they do and have decided on a new strategy. It is interesting that all the major companies have different ways of identifying and introducing new products.
In the UK, Philips has moved their research or incubator business to Cambridge. It is great for the local companies to have global player down the road or across the Science Park but how will Philips fit in? Will a large company be able to interact and invest in the small companies in Cambridge?
Philips are interested in ideas which will take 18 to 24 months to bring to a product stage and then one year each in the alpha, beta and calibration stage. There is a major meeting at the end of the product stage and before alpha trials called “Bumper Meeting”. The key points to agree seem to be: leadership, milestones and budget – with no going back for more.
Products with sales potentials of between £100m to £300million will be developed in an existing business group and those with potential sales of over £500million will be classified as “breakaway” and become a new business group.
So it takes a special kind of skill to change the direction of a major corporation like Philips. Let us hope that all goes well and that the CambridgeCluster becomes a major player in their business plan.
I have just looked at the www.philips.com website – it is not like any I have seen before as the home page for a multinational. They have no product or mission statement; just links to country web sites. I reckon that most other companies have a better way of handling this!