Philips lighting case

1 Silence 5 minutes

1.1 Silence. For five long minutes, with growing sounds and sense of discomfort the
room remained silent. People cleared their throats, shuffled chairs, papers, pens and
pencils - anyting to break the oppressive weight of the silence. Eventually, like a
thunderstorm bursting from an impossibly close and humid night the storm broke and a
flood of talking followed.

1.2 DOROTHEA Imagine, five minutes silence and 25 highly stiff [?] people sitting there.

1.3 GERARD 2 That’s great. That’s all wonderful stuff, but can you just paint that picture
for me, because I don’t know if you knew it either, but it just feels, that’s a great thing.
And then that’ll get us into Lighting Solutions and the rest of the story. Could you just do
that?
1.4 DOROTHEA Yeah, okay. So the five minutes silence: like I said, I came, I started with
the assignment of being the [unclear]… in the year 2000, and one of my leading themes
was creativity. And one of the guys, with whom I was talking on a very regular basis, was
Dave Burk [?], and he was the manager of the Central Development Office net at that
moment of time. So it’s a big pre-development department, and Research is actually
looking at this type of timeframe, CDL is looking here, and then we have Standard
Broadband English [?]. [Unclear] for Lighting, so that in Lighting the whole technical
development had actually three types of phases. It was new technologies and concepts
by Research, new concepts and new product examples by Pre-development, and then
products, product development in the factories. So the main job of the CDL - and this was
a group of people who were at that moment of time around 200, 200 people working in
Eindhoven - he said that he wanted to increase the innovation power and the creativity
in the CDL organisation, and he had interviewed lots of people, when they had tools and
stDorotheaf, and he was on the [unclear], what was opportune. And we had quite some
interesting talks about creativity, because… and Dave had the idea that creativity’s just
something somebody has. And then I said no, there’s a difference between group
creativity and personal creativity, and that the group creativity really depends a lot on
how open the people would be together, and all that, and personal creativity also had a
lot to do with your craftsmanship. And then I gave the example of the jazz musician, or
the artist, or you name it, because I mean, of course you, in the first place you’re always
spontaneous creative, and you can do a lot of good things. But than there is this space
when the playfulness goes away and you want to do something intentionally, and then
you can’t in that you really need to have to get the craftsmanship, and then if you have,
if you have become a good practitioner, then you can build on other experiences and
then the creativity comes back, but in a much weaker sense. And I have experienced that
with creative writing, with painting, and also with some music that I have learned as a
child. So I’m also pessimist about it. so this is, this is the type of talking that I had with
Dave. And then he said, okay, can you help me to organise a workshop on creativity?
And I said yes, I’ll do my very best. I brought in this company Prenector [?] which, who I
knew from, from the knowledge management work in Aachen here, and I knew that they
were working with lots of different cultural matters, so not the rational stDorotheaf, not
the true box but really with the holistic approach of, well, engaging with people in their
holistic being. And I said, to free up people and you know, let the creativity flow, I think
that this will be the appropriate thing. So we had pre-discussion, and then the workshop
was set, and I came a little bit late, and they had done a very unconventional opening
already, because they, they had all night an interview. So when, when I came in it was
just at the end that one of the facilitators was sitting in front of the whole group, like in a
circle, and he was asking Dave Berk why he was having this workshop, what he wanted
to have out of it, what he was expecting from this group, but not in a Powerpoint
presentation, but in an interview style, which was already a little bit challenging to the
crowd, because they were, you know, used to Powerpoint and you know, concrete tasks,
and stDorotheaf like that. So and then, and then the next set, and they all, he also asked,
okay, so what is CDL standing for? What are you coming, where are you coming from?
Where do you want to go to? And all these types of things, so the notion or concept
integration had already been included. And then it was finished, and he said, okay, then
let’s do a de-brief with the book now, and he asked a few questions, and [unclear], and
then one of these questions was, okay, I heard from Dave and from you as well that you
are here to be a concept integrator. What type of concepts do you integrate? And there
we go. And nobody had an answer, and he was well, strong enough to allow for five
minutes silence. And I was sitting there in that room, and I was thinking, oh gosh, these
are all group managers here. They manage the groups that are supposed to think about
our future, and they don’t seem to have any clue what this future should look like. And I
thought, and then I thought I saw, you know, I saw all, all of us being unemployed. I
knew already that we had this growth problem. I mean, that was the reason why I got
this special assignment of creativity, that was how John Fitzroy told it to me, and that
was all. And I knew Huhn at that moment of time already, I had got to know him a little
bit earlier, like a month or so, and, and I really was thinking, if this is this place, then you
can, then it will just stop. And then I’m rebellious to say, to not accept it, you know, and
then, I mean, at that moment of time the note of my mother didn’t come to my mind,
but I mean somehow it was within myself and it was like, okay, obviously there is no way
out, but I know that there is some way out. I don’t see it, but somehow it will emerge,
you know, and then the workshop somehow continued, completely chaotic, because I
mean there was first of all a big confrontation, and the whole group split into two. Some
of them wanted to go directly; others found it really good, because it made visible the
shit we were sitting in.

1.5 GERARD Was that directly after five minutes, the confrontation appeared?

1.6 DOROTHEA After the five minutes, Joerg took a break and said, okay, if this is the
case we have to discuss, we have to discuss with, with Dave how to, how to continue.
And then Dave asked me to join. I said, okay, what the hell are we going to do now? And
then of course the crowd, they of course started to separate, and they became very
angry, and you know.
1.7 DOROTHEA It was an amazing group dynamic going on. And somehow the workshop
then continued, and it also continued for the coming two days, so nobody went away
except Johann. And I shared that with, I shared that with John Fitzroy. I think that was
also one of the reasons why John then put me into the CDL team. So that was in
November 2000, and then what I said then back to John Fitzroy, he said, okay, I
assGerard e, knowing you, that you had a suggestion. And then I said, yes, I think we
need a vision. And he said, what do you mean, vision? I think it’s a dream, a shared
dream, something to give meaning to the concept integrator thing, because obviously
that is not meaningful. And that’s the reason why in January ’01 the CDL vision team was
founded. And in February ’01 we had Stefan Marsano and the historic cultural chairman
[?] on the technology strategy [unclear] meeting. And this was, this went for a year, and
in parallel here, because we started thinking the automotive future, and then in 2002 we
had then the lighting future. And in 2003 we had atmosphere provider, in that January,
in 2004, 2005, until the end of 2005, that is the provider. And this gap, half a year gap
was because that was transition time from David Hemel towards another CEO. So
actually the phases that are there, this is sort of initiation and formative coalition,
creating the partnership in crime, or how you all it. That’s really crucial, and it’s the first
really building part, the lighting future. But think the lighting future would not have been
possible without all this, the automotive future that was moved by the project. Because
what we learned from Philips Design, from Philips Design we got the complementary, we
got the foresight information, so the socio-cultural change, this one. But that was so
abstract, I mean that was a standard, it wasn’t green talking. It was so abstract that
you, that it was unactionable. So I said before, before, before we try something big, I
wanted to understand how that, because they were talking about get some help to
translate it and make it actionable. And then I said, that’s fine, but how are we going to
do it? And they were not able to show me how they would do it in a meaningful way.
And then I said, okay, let’s organise a pilot project so that we can understand how that
works. And then I took a very safe environment where I knew everybody, and that the
automotive, and I, and since I knew the whole management team and everybody, I said,
look, you are also looking for promising new solutions. Do you want to test them I
process? Isn’t it a great idea that we do it in this environment for you? And that’s what
we did. And from there we learned that Philips Design had two steps to envisage the
future, so that the future landscape, then ideation, then idea development, and they
work. And what we added for thinking about the future is translation to action, you
know, formulate from the idea development, formulate action plan or project
assignment to really make it happen. And without that step, thinking about the future
would have been completely unvalued, and this is something that Philips Design,
because they never had implementational responsibility, that doesn’t work. And the
other thing was that normally Philips Design would be in this type of project, and they
also claimed that that was very important, because they were the only creative experts.
And I said, well, in order to create ownership, if you don’t put the project management
and the project leadership into the Product Division, nobody will take it over. So that was
a big debate, and that was also quite some struggle with, with Stefan Marsano at that
moment of time, and without the help of John, I wouldn’t have solved it. But since John
and Stefan Marsano were in the same [unclear] group, ten years ago or 20 years ago,
they were able to sort it out. So it’s all about… I mean, in the end the success of
something like this is whether you are able to discover the right relationships and

2 Realising the challenge - the need for something different

2.1 The trigger for the slience was an apparently simple business question - but one
which challenged the fundamentals of the business.

2.2 we have a big problem in this company. We are still the cash cow of this
organisation, of whole Philips, but we don’t grow. If we don’t grow, where is the future?

2.3 The need was very simple. The need was, you could see over the last five years or ten
years that there was no growth, no top line, and there was a little bit of top-line growth
because they, the production became much more efficient, but there was no bottom-line
growth for them for lighting. And in comparison to the other product divisions, at that
moment of time product divisions, lighting still was the cash cow, because they were
really profitable, and they, they had all these black numbers, and actually they financed
a lot of what was happening somewhere else, like since a hundred years, but there was
also, there was no real investment going in, and they, they really didn’t grow, and
everybody understands that if you for a too long time if you don’t grow, and stagnation
is the start of the decline, you know. And then you have to of course to deal with also the
ambition of these types of managers, because I mean when they then want to make a
next move, they need to show a track record of something. You know, that’s very simple.

2.4 GERARD Yes. So back in that early day, when you were talking also about that need,
I just jotted down a few things. So it sounded as if, I mean from a black and white
perspective, the finances, I mean the finances weren’t going well. There was a realisation
that the current formula wouldn’t continue for much longer into the future. There was
an awareness of stDorotheaf, so drivers and plans that were happening. There was
corporate pressure, so pressure from Amsterdam to have to do something. David was
the CEO, and he was more the…

2.5 DOROTHEA He was ambitious and risk… Willing to take a risk.

2.6 GERARD So a certain amount of courage to step into…

2.7 DOROTHEA Yes.

2.8 building an early coalition

2.8.1 DOROTHEA I had never discussed International Futures with David until the kick-
off meeting.

2.8.2 GERARD So the kick-off meeting was what? The start of it?
2.8.3 DOROTHEA That was the start of it, and then we wrote this decision document,
and then the, you know, then there was this trusting that was built up with David. And I
think that was crucial to success. But the trust that I had before was to Huhn, to Huhn
and Klaus Fechter. They, they were actually, and also Stefan Marsano [?] in a way, so
there were a few people, but… And then new players came in, and one of the disturbing
factors from the every beginning was Rob Thistle [?].

3 key theme about how D worked with the senior players to change their mindset and to
own the long term supporting and framework strategic decision making role

3.1 Kylie Minogue event here

3.2 ambi lighting as parallel but linked example

3.2.1 Subtopic

Yeah, I mean, but, the ambi light [?] television is also in that arena.

MS1 That came, you just said that would have come out of…

FS That came out of CDL [?] Vision. And, I mean, out of the five minute silence…

MS1 That wouldn't have happened without the five minute silence.

FS No. Because, I mean, when [unclear] came, we had this strange project to find out of
CDL Vision for 2001. And in 2004 or so, I mean, that ambi lighting was the first home led
project with lighting concepts. And Klaus was, he was [unclear] very new in becoming
the city or upland and he looked at this portfolio and said to me what is this strange
project? And I said, Klaus, believe me, you should do it. And then he said, why? And
then I said, well, you follow the technologies [unclear] meeting and you saw the social
path for trends, this is something that we really are of the standard lighting loss and
that's what you need, because otherwise we don't grow. And then he said, hmm, so
you recommend to me that I'm doing it. And I said yes, because I know you are a
courageous guy if you want to be. And he said, okay, I trust you. And I said, trust
yourself. Think about it and then trust yourself. But, I mean, if you want to trust me,
that's also nice, but also in the end you want a bit fruitful discussion, you know, only
between the two of us. And then on the next technology strategy meeting he said he
really was the one who defended this project against the technology managers.
Because they said, wow, is there anything coming out? And then he said and he really,
sort of, used the words that I had given to him before, you will never do something
different if you don't do different things differently, he started to think that was his
saying. And then quite a few contacts were developed and one of them is now ambi
lighting really. And, I mean, that partly goes back to this one, if you really are honest.
So there are really quite a few really very innovative products that came out of that.

3.3 key language/thinking change in senior manager

3.3.1 And then he said and he really, sort of, used the words that I had given to him
before, you will never do something different if you don't do different things differently,
he started to think that was his saying

3.4 Subtopic
3.4.1 DOROTHEA You need to, you need to adjust it to the specific context. I mean that
the discussion we had yesterday about sustainable innovation is appropriate solution,
appropriate context-dependent solution, or context-relevant, not dependent, context-
relevant. And do you know what’s appropriate? From learning from nature. So actually,
summarising it, this is, this phase, this is preparing the ground. This is identifying
appropriate seeds, and this is planting and making vision. And this is sort of, this was the
tricky time being, but it was very important as well. It was holding the idea, and I think
for some people it was also sort of the proof of the pudding, whether the idea is really
strong enough to survive, you know? I mean one favourite key is this period of time was
just staying there and saying no. I mean this is so important and so powerful, I will not
allow that this disappears. And it was really a tough one. That also was quite a lonely
phase. Fortunately Howard was there. And but in that, in that moment of time we also
further developed the thinking of the dialogue decision process, because that’s also
really a key. That’s a key point in involvement. This book is about how to, how to
facilitate strategic decisions. It’s really good. They say that in, in operational decisions,
and in innovation we always have to do this with particular precision. In operational
decisions, who has, who has the key factors? So you have a decision, you see a result,
and you can see whether this is what you expected on a very short time period, or
relatively short time period. In strategic decisions the problem is that the result can only
be seen in ten years, five years, whatever. So what they suggest then is that they say
okay, in order to, to still come to a high quality of decision, they have six parameters:
appropriate frame, creative, doable alternative, medium for reliable information, clear
values and frameworks, logically correct reasoning and commitment to action. And all
the time, in the dialogue decision process, these, these are felt, so these are matured,
but all of them equally. So it does not have, if you only had with medium for reliable
information, if you don’t at the same time also work on creative, doable alternative, it
will not work. And then they suggest that the whole process… Somewhere they have,
they have nice graphs on how the process is set up. It is this. It has actually a decision
team and a preparation team. Here you see. We have a strategy team and a decision
team, and they are in a dialogue decision process. And the whole way we set up the
thing for the lighting future project was actually according to this, because… And this is
also how I explained it both to David Hemel as also to Huhn, and said, look, what we can
do is that we prepare your decision, because it is a really deep long-term decision, we
are, we make sure that we do it under these types of criteria, and we need, and that
was also reasoning for the set-up that we… And I said, we need actually, we need
regular meeting with you so that you also grow into the decision process, because if you
only give us an assignment and then we get the output, and we don’t know… So with all
the struggles we went in the meantime, we don’t have feeling for the quality of the
decisions you are going to make. So how can you then make the decisions? And well,
they bought into it, and we had for the lighting future, we had four team feedback
sessions for the PGC of one hour, which was really a lot of time, on their agenda, and
one of them already, it was a workshop of a half-day, of half a day, and well it really
worked out very fine. So and there, of course, in these meetings, we, we always
organised them such that they saw that this is not a standard regular thing. Like we said,
if we want to do something new, the newness also needs to be experienced during the
explanation. So for instance what we did in the very first PGC meeting is we came and
we started with a music video from Kylie Minogue. So I didn’t say hello, or how are you
doing? Or nice to be here, or something, but I started the computer, the video came,
they were sitting there with their lunch bread and a little bit shocked because of the
music, and I let it run for like one and a half minutes, and then I said, what did you see
here? I didn’t, I still didn’t say, good afternoon and nice to be here, but what did you see
here? And posed the question, and, and then as nobody first answered, well, you didn’t
see anything? I cannot imagine. So that was already a little bit joking. And then Theo von
Boehm [?] said, oh, I saw a very nice woman, and I said, yes, I can imagine. And what
else? Then he said, well, I don’t know, and then I said: you saw light on the wall, light on
the ceiling, light on the floor, light accentuating Kylie and all that; in other words, light as
a tool to really create a very nice ambience, much more than we do today with our
lighting. Good afternoon, gentlemen, this is, you know, this is the way. I started and it
was [unclear], you know? And then, and then Theo von Boehm said, oh, I didn’t see
that. Can you show it again? And I said, missed opportunity, too bad.

3.4.2 Subtopic

FS [Overtalking] In also the last project is in a region of an Asian case [?], so there is an
octagon team now working on it…

MS1 [Unclear] really.

FS Yeah, it is.

MS1 What's an octagon team, sorry?

FS Octagon is our highest level management education. So if you are top potential…

MS1 Oh, I see. So you've got some seriously top brains working on that. Great.

MS2 Wow, because they can [unclear].

MS1 This is the bathroom?

FS Yeah.

MS1 Wow.

FS And they came to, I mean, in the last year I got quite a few visitors asking me for
background information in terms of atmosphere creating. And I was always looking [?]
and saying, yeah, isn't this funny. Why you are [unclear] and you know everything and
everyone [?]. I don't know everything anymore, but…
MS1 This is rather important for the bigger picture which is if you prove that you
become a hero or a heroine, in a sense, because atmosphere providing starts to give
real growth opportunities, which is what, right now…

3.5 Subtopic

3.5.1 MS1 But it's less, actually, because, in a sense, go back to the five minute silence,
and nobody spoke, so there were no real growth concepts. Now, to prove there is a
growth concept, if it's very clear and the company recognises we are now growing, of
course, they must be close to victory in that green [?] and inviting [?] side. That has a
real impact because if you could, for the company's benefit, close the loop and say well,
this is where you were eight years ago. Absolute silence.

3.6 importance of continuing challenge and surprise - help senior people constantly
challenge their frames

3.6.1 DOROTHEA You know, and we always in these feedback sessions we had, we built
in some of this surprise effect, which also led to the situation that when we came there
for the last time with those things, the lighting future team, some of them came to us
and said, oh, it’s too bad that you will not come again, because all the time when you
were coming it was in any case exciting and it was nice, you know, and by tool create a
positive aura around it, you know, often changed its experience as dry and a lot of work
ahead and all this. And we managed by doing this to get it, to get this flavour of
excitement around it.

3.6.2 GERARD Great. You were doing something like this, that meetings have to…

3.6.3 DOROTHEA Yeah, different. I mean, if, if you bring and you’re stuck in the old way,
it is not perceived as new. So don’t do that. I mean, it’s really walking the talk. If you
send for something different, make it visible. So be also creative in the way you present
things. And I mean, it is actually, it’s a little bit like Ghandi: be the change you want to
see in the world, right? If you are not the change you want to see in the world, how can
anybody experience it?

3.6.4 GERARD 2 So it’s really interesting, because there are two different things there.
That last is a hugely important point, because it’s fixing things in people’s memories, and
trying to go back to how, you know, as we understand, you know, what goes on in the
brain when we learn, it’s about patterning in a different way. And that, Kylie Minogue, is
actually probably something they still would remember years and years later.

3.7 key concept of coaching team - mentors and sponsors who really understand - link to
Wakaba and others
3.7.1 JB But the other thing is this, which I find rather interesting. When Gerard was
talking, one of the other talks was from BT, and the Wacaba [?] Group is the group for, I
think it’s Japanese for green leaves, or green shoots, and how do they bring on new
ideas? In one sense, you know, very similar kind of culture, very old established ex-
public sector. And one of the things that hit me was they had dialogue partners, and I’m
just thinking now, if I reply my notes from his thing, I bet I could map it on, his idea of
sponsors, a feedback group, this relationship that you clearly had built quite deliberately
between these two. Had this been something you’d used a lot before, or was this
something you were experimenting with?

3.7.2 DOROTHEA I has used it a little bit here and here, and I had discovered… Well, I
had used it a bit. Let me think. This was one of the first books I got to know from Rene
von Dohn [?] when I came there. No, I had worked a bit with it in the technology
strategy courses.

3.7.3 GERARD 2 Yeah, ’cos it’s very powerful, ‘cos one of the problems is, classically you
have the internal entrepreneur, whatever label we have on that, but they don’t relate to
this mainstream decision bit, and then they bring it in and they’re surprised that they
don’t get the, the time in front of then, that they accept everything. Expect everything
to happen in one big event. You have a dialogue, this notion of over time, keeping them
in the loop, keeping them on board, and also then making them remember with things
like the Kylie Minogue. I think that’s really powerful.

3.7.4 DOROTHEA Yes, and this is the only way it works. It’s also a sanity check, because if
they are not willing to engage in the dialogue, you know, then we can question whether
they are treating it seriously.

3.7.5 GERARD 2 But you see, as you say, it’s obvious. What’s interesting to me is this
idea that…
3.7.6 DOROTHEA You see, this is, this is how I had it up. You see the dialogue structure.
So actually, I mean, I changed it, so yes, I have worked with this quite a bit before, and
the dialogue structure is that this bit is sort of, today they call it strategy team here. We
called it core team. And then we had the team here, you see. [unclear] it was this one.
Here you see the dialogue moment, and here they are supposed to take a decision, and
here. So what I would always do in the beginning of such a PGC meeting is that I would
say what type of meeting it is. This is an update meeting. Do we want some feedback?
Do we want a decision? And you know what type of thing is it, so that they knew that
they also from the way they would be listening, and they would be prepared. And of
course who was there was functional in this. I mean, we also had a coaching team.
That’s something that I had deliberately asked for, because I said, for my level, and at
that moment of time I was grade 70, so where you rank so you know in the organisation.
And there were like at least five or six grades between me and these guys, right, so I had
to prove, I, I’m really afraid that I will actually not meet the language and the way of
thinking that they had here. And I was very much about, aware about language
specialists, you know? And then I said, I need a coaching team that helps us to translate
the findings that we have on this level into the appropriate abstraction level for these
guys. And I think this is something that, that leads to lots of misunderstandings or
difficulties often, because people are not aware that on different hierarchical levels
people are talking different abstraction levels. So we have, we have in terns of
communication we have the challenge of different abstraction levels, and of different
functions. And on the function interface people don’t understand each other; and on
the hierarchical interface, people also don’t understand each other. They only
understand… And this is really sort of the matrix. I mean to have the hierarchical matrix
like this and the functional matrix like this, and normally people… Only these guys
understand each other, these understand, so you understand the four, the four around
you. But we work, a team started working here, and we needed to talk to people here
and integrate all the different functions. So from a communications perspective it was
quite complex. Do you see what I mean?

3.7.7 GERARD 2 Yeah.

3.7.8 DOROTHEA And then this is not the best way of representing it, but as one, one of
the key pictures that we should develop in, in this article is making this in a way explicit.
How do you, how do you communicate in an environment where normally - and this
also has to do with overloading and with everyday work - you exactly know how to
manage these interfaces, but you don’t know how to talk from here to here, or from
here to here.

3.7.9 GERARD Yes. It strikes me as a step that would be so easy to miss out, you know.
But to have that coaching team help you translate what the right language level is for
PGC.
3.8 important to make clear the vague, fuzzy, unknown character of the innovation
space they were 'planning' - sensing they needed to move into :

3.8.1 link to current sustainability work and the perception that Dorothea is a change
catalyst - And, actually, I get that one of the really cutting edge areas that Philips could
position itself, would be the area of providing atmosphere creation lighting solutions in
a sustainable way. You know, the combination, that's where we really differentiate.
And I'm absolutely convinced that you can do both at the same time and, at this
moment in time, because actually, you can do either this and it is fun or you do this,
because sustainability is somehow attached to this notion of reducing lifestyle and
heaviness. And I don't think that this is how it works. It is reconnecting to nature, it is
reconnecting to creativity. It is all reconnected, it's reintegrating in all that. And that so
far, the read through and the big innovation space is providing atmosphere, providing
solutions in a sustainable way. And this is where we can end. And then the circle closes
and I, on the innovation excellence day in April this year I said to Klaus, more in a jokey
way, who knows, maybe I will come back and you need sustainable atmosphere creation
in lighting. And he was looking like uh huh? I said no, I'm setting you over. But I think
that would be another, like, one or two years until he's ready. MS1 That's really
interesting because also he then calls your bluff. If you think now you know how to do
it, this is a project, it would have some boundaries to actually create that, which is quite
exciting. So are they happy with the [unclear] atmosphere provided in terms of buying
companies and establishing [unclear]. FS [Overtalking] And also developing skills; how to
do it MS1 And do they have products or projects that are now [unclear], at the right
hand side of your right hand picture, they didn't have products which are in
development around atmospheric lighting. And is there any, because, I mean, the
other…

4 The mindset and language of change - NLP and patterning and how to change that -
key theme

4.1 learning to work with the NLP, the undelrying patterns and to manage that change -
Dorothea moving from apprentice to being a craftsman at this

4.1.1 GERARD Yes. It strikes me as a step that would be so easy to miss out, you know.
But to have that coaching team help you translate what the right language level is for
PGC.

4.1.2 GERARD 2 This is hugely important, because again, if you think about it, so often
the assumption is made… I mean, the classic thing is, if you imagine a presentation, like
the kind of ones we often get at our workshops, people would say, very important to
communicate with the top team. Yes, but how? And what - this is really interesting - it’s
all neuro-linguistics almost.

4.1.3 [Overtalking]
4.1.4 DOROTHEA … it was, it was designed in, I have designed that in, and that was also
one of my pre-requisites before I started [unclear]. Then I said, and I mean, I put into the
coaching team, at the very beginning already I put in there Rob Theser [?], who is one of
the trouble-makers, and I did that very deliberately because I thought if he’s on the
coaching team, he is in the co-responsibility to make it happen. So he cannot jGerard p
out, you know?

4.1.5 GERARD 2 But I think the principle is really important, because if we accept, if this
is about changing minds, then one of the reasons why people don’t take on a new idea
is because they don’t hear it, because it’s not expressed in a language they can get. And
what you’ve obviously put your finger on there is, we need to understand what are the
linkages, the interfaces, and who could help translate, so that you get… I mean again,
we talk about common vision, and we talk about common language, but we don’t often
talk about how we get to those. And what I’m hearing you describe beautifully is, this is
a process. These are tools which you must have experimented with early on in your
career, or in this thing. By the time we’re into the Lighting Future Project, you’ve been
quite explicit. You can draw us a matrix and say, I was trying to do that.

4.1.6 DOROTHEA No, I was deliberately designing it that way.

4.1.7 GERARD 2 Exactly. And now my guess is in sustainability you’re also, because
you’ve got a hugely… What does sustainability mean? Ask ten people, you get 12
answers. So in a sense you’ve got a really big language issue. But I bet you, you’re using
the same approach there.

4.1.8 DOROTHEA Yes, I’m doing it differently, because I have to be much more flexible. It
was a relatively, this worked in a relatively rigid structure, because it was a project, and
the project had a limited timeframe, and also the people to be involved were limited.
Now with, now with sustainability, the whole thing has no boundaries any more. It is
more floating, you know, and that makes it, that makes it a little bit more complicated,
because now it all takes place in this open innovation type of setting, and in the setting
of procreation, you know, which is… This is, this is actually sort of the classical approach.
But this is much easier, because you know your boundary conditions, and you can
navigate in a sort of a safe space. I mean, although most people would not experience
this as safe, but there were so many clear and unambiguous boundary conditions, right,
that in comparison to what I’m doing now, I mean it’s a completely different world. But I
mean all these experiences make me so confident that now I’m able to…

4.1.9 GERARD 2 And presumably, on the basis of what you’ve just said, if somebody
else, sort of a CTO or CEO level says, I would like a specific project around
sustainability…

4.1.10 DOROTHEA Well then I could design it very easily.

4.1.11 GERARD 2 That’s my point, because I think this is, this is the business, from
apprentice through journeyman to master, master craftsman, you could do it.

4.1.12 DOROTHEA Yes, of course.

4.1.13 GERARD 2 That’s my point, because I think this is, this is the business, from
apprentice through journeyman to master, master craftsman, you could do it.

4.1.14 DOROTHEA Yes, of course.

4.1.15 [Overtalking]

4.1.16 DOROTHEA It’s really a piece of cake for me now.

4.2 general innovation management message about getting beyoind the platitudes of
'good communication' shared vision etc - to what this really means

4.2.1 I guess for me one of the nice end points would be to say okay, here’s a, there’s a
set of things going on which we have to be aware of, and we can exemplify those
through some stories, but then what would you need in your innovator’s toolbox?
Innovator as in trying to change something? And it’s lots of metaphor skills, ways of
building common visions, visual pictures, ways of building common language. So it’s,
you know, it is almost the whole neuro-linguistic idea of how do we actually as
individuals, but the how does an organisation process the world? And my sense is we’re
beginning to get close to some of that with some examples to tie it. That’s really
interesting, because then this is transferrable. The teacher in me thinks this is brilliant
material, because you’ve still got to learn how to do it. Just writing it down like that
book, you’ve still got to practise and make it happen for you. But nonetheless, that’s
really powerful, ‘cos it’s a long way from the platitudes about: good communication is
important during the life of a project. Yeah. But again, what do we mean by
communication? This is getting much more substantial.

4.2.2 GERARD Maybe another thing there as well is that the functions and the hierarchy
is all to do with different cultures as well. So they process information differently. One of
the things we do at our workshops is to force paraphrasing, so if somebody says, my
idea is soandso, nearly everyone will say, I understand. Then you say, okay, well
paraphrase back to the person your understanding of it. Nine times out of ten, where
there’s a mix of cultures in the room, the interpretation is very, very different. So maybe
as a kind of further build on this would be, if we’re looking at it in an article, would be to
kind of where possible build in paraphrasing as well, in terms of…
4.2.3 GERARD 2 Yeah, ‘cos I think what would be nice is to think about the toolbox. If we
were thinking of this in a [unclear] type article, you know the kind of thing. At the end
there’s the sort of takeaways for managers, and in this case it’s the takeaways for
change agents, how to do it. And it would be, what’s in the toolbox? And that would be
one of the tools. And it seems to me, if we could list that, you can almost imagine that
as a sort of final page of the article. This is really good. I guess can we come back to
telling the stories? Because it seems to me that A, that writes the case study, because
the case study is much more, maybe the case studies, it’s stories which allow its
interpretation. And then we can use that to drive probably more than one article even.
Let’s dream about this. That was a really powerful evocation of the five minutes silence.
Can you now talk through the thinking of the Lighting Futures Project? I know you’ve
referred to it already, but can you sort of a…?

4.2.4 [Overtalking]

4.2.5 [End of recording]

4.3 key language/thinking change in senior manager

4.3.1 And then he said and he really, sort of, used the words that I had given to him
before, you will never do something different if you don't do different things differently,
he started to think that was his saying

4.4 Subtopic

5 Seeds of a new paradigm - convergence towards something new

5.1 Underlying trends - not just a random stab or lunge for growth but a sense of
convergence around new business model, new paradigm

5.1.1 UF Well, John Fitzroy knew a lot about the technology trends. We had run the, the
technology [unclear] meeting with Philips Design. I had run the pilot project, and then
we got into contact with the social, socio-cultural trends. We had Arthur D. Little [?] in
house, knowing that, that there are completely different business models emerging, and
so, and that was the whole story about, and I have all, all the documents about that. I
still have them. They said that, that there was this fragmentation of industries, so while
formerly you would have… I mean, the whole discussion around core businesses and
supportive competencies was going on, and you could see that many corporations out-
sourced logistics or out-sourced distribution, and you know, many industries really sort
of re-shaped themselves.
5.1.2 And then also in Amsterdam at that moment of time the whole re-scoping
discussion was going on from, from this big electronics corporation to becoming a
lifestyle, healthcare and technology corporation where then technology also fell away.
And of course people like David Hemel were involved in that. So I think there was, there
was on a high level a discussion going on in terms of scoping

5.2 two forces - trends to rescope Philips and the need for growth in mature business

5.2.1 on the other hand you really could see that there was no growth, and that was the
biggest problem in, in Philips Lighting for a long time. So and David Hemel was a young
and very ambitious person, so he really wanted to make a difference there. And then,
and in parallel, and John Fitzroy was seeing that, that this movement was happening,
you know, so he, he actually had, had sort of facilitated this one in his, in his role as CTO,
and he saw that this one was coming.

6 setting up the group

6.1 How to move forward on the two trends - rescope business and deal with growth
challenge?

6.1.1 you really could see that there was no growth, and that was the biggest problem
in, in Philips Lighting for a long time. So and David Hemel was a young and very
ambitious person, so he really wanted to make a difference there. And then, and in
parallel, and John Fitzroy was seeing that, that this movement was happening, you
know, so he, he actually had, had sort of facilitated this one in his, in his role as CTO, and
he saw that this one was coming. But he, but he didn’t have an exact idea how to do it.

6.2 The high level realisation of the need for more radical, ‘out of the box’ thinking
around the future of a core division led to the workshop. Decision to set up an entity a
group which would explore this and how to deliver radical solutions. ‘let’s define this
thing for a lighting future project. Also because we had created this new business
creation entity. And the question was: how are we going to fuel that entity, that new
department with out of the box ideas? So that was the starting point, and that was a
top-down starting point.

6.3 Dorothea volunteers

6.3.1 And then I said, because I knew Huhn [?] and I had run this pilot project and he
knew about it, I can volunteer and help to define this project. So that is what we did. I
did it together with people from Philips Design, who had some experience, so we made
this suggestion.

6.4 budget and top level commitment decision to this risky exploratory option
6.4.1 And then Huhn discussed it with David Hemel [?] and said, okay, what’s the
investment? The investment was in comparison to the lighting budget, it was really
nothing. You know, it was like 300,000 euros for a whole year, so that’s not that much.
And three or four FTE attached to that, so that’s really sort of marginal for such a big
corporation. And David Hemel said, okay, I don’t expect too much, but let’s give it a go,
you know

6.5 the embryonic team and vision

6.5.1 And then we had this team who really dared to go outside. And I mean, I think at
that moment of time it really depends on somebody, without wanting to be arrogant,
but I, it’s not somebody like me who says, I don’t have a clue how it will work, but I trust
that there will be a way, and I just do it, you know. And I trusted in my relationship to
Huhn that he would protect me, and I also got the freedom from Klaus Fechter [?], who
was at the moment of time the successor of Lars Wesleich [?] and the new CTO of
Lamps, and he also continued to pay me, although I was not working for him directly. So
there was a, there was a small group of committed people who said, okay, we need to
do something. Here is some strange person who is daring to do something different.
Let’s give it a chance, we cannot lose. I mean, if we lose these 500,000 euros in
comparison to the five billion turnover it’s a drop, a drop of water. So who cares, you
know? And I had very, but I said, if I do this I have quite a few relatively tough boundary
conditions. So I said, I will only do it once, and that’s why I brought this book, once you
understand that you are the decision team, because I’m not in the position to take any
decision, and if you give me an assignment to look for a scope extension for the PD, and
you’re not willing to implement it on PD level, then we don’t, we shouldn’t start at all.

6.6 sponsorship/ senior management commitment

6.6.1 DOROTHEA I mean actually I would say David was not, wasn’t a risk. I mean David
was, he was a player.

6.6.2 GERARD What does that mean?

6.6.3 DOROTHEA What does that mean? He liked, he liked experiments, he liked to
explore new things, and he felt inadequate. And, and in the end I mean I think it worked
because I was able to play a certain game with him. I mean I played the captain game
with him. I said to him, look, you are the captain of a big tanker. I don’t have a clue how
to run that. But I’m the captain of a small speedboat. If you want to find a new harbour
for your big tanker, obviously, because your tanker is relatively slowly movable and you
have a very circle, you know, if you want to turn, it will take you a lot of time to turn
again, so it is good that you have a speedboat discovering the coast and saying, okay,
there is a landing place which is big enough for your tanker to land, you know? And then
I said, I know how to run a speedboat. I don’t have a clue on how to run a tanker. I can
help you to explore whether where is some new landing point. So for him the truck
climber [?] thing came later, but for David I had that one. And that only meant relief on
the captain’s level, you know. And, and because I never positioned myself as big David,
small Doro [?], but it was on eye height, you know…

6.6.4 GERARD You put him in more power of… Well, yes. Okay, so that does kind of
assist. So what’s interesting here is that…
6.6.5 DOROTHEA I mean that was very important in that case, but I guess in the end it
has a lot to do with respect, and I think this was also how I built the trust with him. I
mean, I was also demanding from him. I said, I want to be for instance in the start-up
thinking about the future, because I said, I’m only accepting this project if the CEO of
Lighting in the project owner, you know? And then they said, why’s that? And I said,
because if it is PD scope extending, he’s the only guy who can implement it. So if he
doesn’t own it from the very beginning, why should he implement it? You know? And
then they said, well then this is almost impossible. David would never do that. And I
said, okay, then we don’t do it: very simple. And I think that he liked that. So then I went
there and I went in there with the project brief, with the project start-up docGerard ent.
And I said, look, this is the project you have kicked off the other day. This is now the
project assignment docGerard ent, can you please sign it? And I set it for him upright,
and then he said, well, I didn’t read it. And I have said it’s too bad for you. I mean, I
wouldn’t sign something I hadn’t read, but… And I cannot imagine that you sign
contracts, big contracts that you didn’t read. And I said, if… And then he said, is this a big
contract? And I said, it’s about your future, is it? So I think it’s a big contract. You know,
and I think these are the type of things. And then I said to him, look, I will not come and
disturb you - because I know you are a very busy person - but once I need you. I need
this door open. And then I said, don’t worry, you will get into my door if I’m open five
minutes after you knocked at the door. And that’s actually what happened. I mean, he,
the door was always open for me. He told his secretary - normally he was a very well-
protected person and nobody would ever come in - but there were a set of these types
of requirements, and at that moment of time I did really sort of intuitively that I
prepared the ground so that it was an equal game. I positioned, I really positioned it in
his mindset as a high priority thing. Although he had not thought about it I think I put it
in his priority list. In the first few meetings I put it in his priority list from something that,
that would have to be done as an excuse, I put it on nGerard ber maybe three or
something. At least, at least high enough to have permanent access and his regular
support over a whole year.

7 the process - beginning scenarios and moving towards projects

7.1 Okay, then he did what [unclear]… Looked at three new business creating
projects and find what happened to his project [unclear] for lighting process from others
sharing and adapting and [unclear]. And it wasn't about Philip's Lighting [unclear]
design for its research a [unclear] of six people reporting to the PVC [?] and a core team
that was not on this list but [unclear] technology that was more [unclear]…, which is the
important thing. And then this is actually how it worked. [Unclear]…in 2002, the
standard business scope is 2006 and I can give you these slides or I'll give you a copy.

7.2 MS1 It would be really useful, yeah.

7.3 FS Then we have the time horizon towards 2012 which, in itself, already was a
revolution because normally, business people would never think ten years ahead. And
then the first step was that we decide the future landscape and that's actually the first
book, this one. So this is the future landscape. And here we collected all the different, so
we did this time awareness exercise which was really very, very powerful.

7.4 Subtopic

7.4.1 MS1 Right up to 2032?

7.4.2 FS Yeah. But we also started in 1972 in order to, with people and that's certainly
something for the toolbox. You know, because some people were not born in that
moment of time, but others remember that there was not at all any computers in 1972.
And that's the reason why we chose for that time. So most of the people could
remember to 1992 and could envisage 2012. But we deliberately stretched it further.

7.5 key role played by the cross functional futures workshops

7.6 details and examples of how these workshops operated

7.6.1 How many people were at the workshops, approximately?

7.6.2 FS 40. It depends. So we had, but the idea template was, actually, something like
this. So you had a space for the idea, a description and then a place for some drawings.
And then on the back page there would be what we work on it, what we're not working
on it. Then we had this maturity graph where you should write down where it was in
terms of business technology and need. Some more [unclear]. I have to look it up,
somewhere, I guess, I have one of these templates left. I don't know exactly where it is
now. I thought it was in there, but it's not. But all these things, and they were really
useful tools and we really were very disciplined in developing facilitator agendas, so that
really, everybody knew what was going on and things like that. So then what is second?
The second step was that first who [?] would plot also the existing ideas [?]? And then
we had new ideas generation and simply existing ideas because they came from the
businesses we were making in the scope of, in the existing new scope. We said, okay,
and now you are allowed to think much broader. And then the next one was plastering
[?] the avenues [?]. That was when then done by the core team. And identifying,
particularly [?], the directions and that's visualised here by eight [?] different types of
angles, because it's a whole world of opportunities. And then we had, like, 11 different
business ideas and all of them were described, so you can see the alternative scope
extensions were, some of them were, sort of, market orientated. Some of them were
more business orientated. And then there were also technology orientated ones and
the market orientated was, for instance, lighting for health care or disinfection or
atmosphere creation or building light integration during construction, signage and
guidance and jewellery. Then from the business model perspective it was leasing
consultancy or recycling. And from the technology perspective it was threads and
[unclear]. And then we had also such a kit [?] where it was displayed in terms of
expected size, but very rough. And then we had curve [?]. The first scope extension we
had two sheets and one was explaining what is it all about. And the other one was
explaining a little bit of the business rationale behind it. And also a business need
technology roadmap and other enablers. So these are all tools that we then do and fit
in for each of the different sorts. And then, of course, on a very high level, that was the
workshop in September. And on the basis of this, they [unclear] the total decision that
we should go into atmosphere creation. So, okay, the first one you see, now we have all
these ideas and we identify these possible strategic fits, if you now look. And then we
say, okay, which ideas belong where? And then identify if a company fit the criteria and
the growing rate of working. So that was actually the flow. And already that
visualisation was quite a challenge. I mean, I was thinking a lot on how to make clear
what we are doing. And then this was, you know, so this was actually the kick off and
this was the feedback off the visual landscape, this was the feedback off the ideation.
This was this Scots thing and this was the next steps. And here you see the [unclear] so
the involvement of more people and by involving others, of course, you also create
ownership from the bottom. Because, I mean, also people experienced it as a privilege.
So this was it then the time [?] [unclear]. Then all it needs is to be aligned and this is
worked [?] off a, against the idea there we also made a definition because there was
also a misunderstanding between an idea and a business idea. And people first needed
to learn that the business idea comprises all the three angles while everybody from his
personal perspectives thought an idea was just what they would contribute. But a
business idea really needs from the very beginning, all the different angles. So that's
one of the misunderstandings.

7.7 power of building shared view and common language

7.7.1 So did you have a lot of ideas that were then formed [?] to integrate in the
business ideas or were people coming up with business ideas?

7.7.2 FS No. Because it happened in the group process and we mixed the group so that
people from different perspectives were coming there. And a template was built of
such, that the three different things were asked.

7.7.3 MS2 Here with the graphs, okay.

7.7.4 FS Yes. That's the reason why all the ideas where the [unclear] was missing or
there was not at all a clue on the business model, they were filtered out by them
automatically, you know. Here it is here, see, this is the template. So the first thing is
the…

7.7.5 MS1 That's very interesting, yeah.

7.7.6 FS So this part of the idea is what do we offer? The people need a breath of
technology in the business model and what is the diagram? So there was a lot of
thought going into this one. And then this was the idea development. And here you see
that we used the Devono [unclear], so what are the advantages, what are the risks, how
to make it better. And here we have the people maturity, the technology and maturity
and [unclear] maturity. And then you can also see where to focus the effort.

7.7.7 MS1 You see, that, again, that's a powerful picture. That's my point about some
common visual language. Because now you don't need all the details, you see that
colour coded strip, and that's colourful.

8 Need for more information - markets, technologies, etc.

8.1 graphic here of adoption curve and positioning VNB

8.2 But we, and that’s the reason, and after this five minutes silence thing, I said to him,
look we need the complementary market information. And then he said, okay, can you
talk to marketeers? And then I said, of course I do. So I went to all the marketeers in the
year 2000, and I talked to them, and then I figured out that on this third [?], you know…

8.3 UM The adoption period.

8.4 UF … the marketeers were talking this type of timeframe, so this was where Standard
Marketing was in, and we were about the firm, we were both working on this, on here,
and that there of course there’s a gap.

9 beginning to move from future mapping to possible projects - and building

commitment in the process
9.1 And from this type of ideas we had 176 and from one of them were enriched. And
then also we challenged the people during the idea generation, so then made the
contacts map. And that was interesting because, for instance, the England team, they
came up with something like this. They said, okay, they plastered some of the ideas
towards bigger themes and said, okay, we have here new infrastructure, existing
infrastructure, does it deliver components or deliver service? And then they could plaster
their idea themes, because, I mean, my insight was, and coming from the discussions
with David Tenant [?], but, for a multi national corporation, if you want to grow with
10% and you have a turnover of five million already, you need five months and a bit [?]
because it's something like 500 million a year. So this is not something you can do as a
start up company in a reasonable time. And then you also know that this is not
something that you would do with a single product, but it needs to be a theme.
Something on a high obstruction [?] level, and that's the reason why we did this. But
that thinking was also not there. So they were all thinking on a product level. Okay,
where do we have the China plastering? So this is Europe, how they classed it. So it was
really interesting because it all was really representing the different nation's specifics. It
was just amazing. And this was USA plastering. And China was multi dimensional, very
much multi, here, see, very much multi dimensional. Amazing. And also the way they
fed that back, so they reported on it, really reflected in the way some national
characteristics. Although we did not have too many local people from these regions in
place, but, still, it came out, it was amazing how he captured, in this type of exercise,
how he captured cultural specifics. So then the next one was, and that actually, that is
the slide that cost me, certainly, two days to get it, but this was the one that really
convinced David Tennant, because I said, okay, now, let's look where we are. We have
the four different business units that are likely to go. We have new demonstration with
the two existing projects at that moment in time. We have decided that there were two
new things that water purification had offered that would be integrated but as part of
existing businesses. We had decided that we wanted to go for atmosphere provided,
that's a little bit further away from our current, what we are doing. And the question is,
how are we going to deal with this situation, that's the question for the follow up. In the
situation where we have defined within this scope the three projects, and there are other
projects going on, some of them already lying in the area of atmosphere provider, but,
you know. And then you were sitting there and I told this and I used five minutes to get
it up and in the end it was bloody complicated. But since it was built up slowly, he could
absolutely follow me and he said, wow. This is the situation we are in and I said yes and
it's your situation. But, I mean, visualisation and the key is really that from the very
beginning, I had this visualisation and I was very positive in not thinking it and I was
building up everything around it. I think that was really very important. And they saw it
back and they saw how it grew, especially this one, you know. Every time, this would be
the starting slide of my [unclear], so the first thing, they would see this. Okay, last time
we talked about this and this, now we are here.

9.2 pain project idea as an example

9.2.1 So this was the traditional product portfolio, and this is all the additional products
which create this added value. And they cooperate with a partner. So it is from
commodity, wall paint to product experience, interior design for everyone or being able
to do it yourself.

9.2.2 MS2 And nowadays in the UK, on one of the adverts for paints, they have official, a
coloured room and they say what the mood, perceived mood of the room is.

9.2.3 FS So I said, okay, what atmosphere provider is actually the same? And
components, so atmosphere provider.

9.2.4 MS1 You see, what's interesting in that, of course, back to your boxes, is in the
right hand box, we talked about end uses, co-creating and so on. This whole stuff about
experience innovation, experience economy, basically, as you just stressed what the
paint companies are trying to do, it's an experience. And, of course, this is a
customisation, this isn't mass production, everyone has got the same.

9.2.5 FS This is mass customisation.

9.2.6 MS1 This is mass customisation. But the big advantage you've got, of course, over
paint companies is this is much more flexible and programmable.

9.2.7 FS Yeah. But, I mean, the vision of an atmosphere provider is, of course, to make it
as [unclear] and easy and flexible, you know, and that's [unclear]. And then we already
had this one. And I said this is the new things and they, of course, do run together. And
we would normally only focus on these. And these are all new parameters that we have
to envisage in the atmosphere provider. So this is actually the playing ground of the
atmosphere provider.

9.2.8 MS1 And that's, of course, just light, if you added in sound as well, which,
presumably is another [unclear].

9.2.9 FS Why now they're not...

9.2.10 MS1 Can you just explain why we already tried it ten years ago?

9.2.11 MS2 You see that in brackets up there, what's that [unclear]?

9.2.12 FS Well, of course, there were questions that we tried ten years ago, why should
we now be successful and [unclear] this thing.

9.2.13 MS2 Say a bit more about that. So we tried an atmosphere provider ten years
ago?
9.2.14 FS We tried coloured lighting and things like that. We tried to use lighting for a
theatre, theatre lighting in other applications that was less lighting price [?] too. But the
market wasn't ready then. And, I mean, all these concepts had been developed in
research and predevelopment, but the market wasn't ready to take over. And the
question was, why was it? I mean, and that has to do with this timing thing. And in the
meantime, our light had been used in order for city beautification [?] and that moved
around city beautification for lighting much more into the awareness of everybody. And
why could it much better start in city beautification because city beautification actually
is a [unclear] thing. And cities started to differentiate themselves from others. There
was more and more cities became brands and how can you become a brand as a city,
you have to do something with your buildings or whatever. And then, well, lighting is a
very good tool for it. But that also brought a lot of awareness to other people that you
could do much more with lighting than just make a dark room bright.

9.2.15 disruption - wokring with a firnge - role of lighting designers as a new source of
innovation

You see, what you've got there is, but here, it's disruptive innovations, so you start off
with something at the fringe that only a small number of users actually want or value,
and then it migrates and it disrupts when it migrates. And, of course, you're dead right,
my father used to be in the lighting business, he worked with Shortman [?] and he did
all the son et lumière. So very early on, he was going to famous monuments and
creating atmosphere, it was theatre. And he worked around the theatre lighting
division, for, again, very early on, it's the use of programmable effects to create, I mean,
it's [unclear]. That's a fringe and it was priced, and it was all the other things, that it
could only be in the fringe. What you have here, of course, is that trusting disruptive
innovation. If lighting becomes defined and people find that this is my atmosphere, not
just my illumination, then it changes again. When anybody is not on that bandwagon,
and that you [unclear] someone else, it's a problem, because you change their mind.
Really interesting.

FS And the other thing is that by today provides a little bit benefit and that's financial
and that was not there ten years ago. And that really make it interesting as an
atmosphere creator.

MS2 Yeah, that's right. Is there something worth saying about the Philips Lighting
leader, design team? In that, in Chris Duke's book, Unstoppable, where he talks about a
lot of new growth coming from skills within the company that may have been [unclear]
valued or may not have been as [unclear] as much as they could be and with the lead
out [?] design team, they would have had, I guess, quite a lot of interaction with theatre
lighting, or, at least, knowledge of light affects and people. So, I mean, you know a lot
more about that than I do. But the lead out where they're a very skilled team of lighting
designers within Philips. About how many of them are there?

FS Around 20.
MS2 20. But there was a time when they were under threat, I think, in terms of whether
they were seen as valuable…

FS No, not at all. They were never under threat but the whole illuminate division to
which they'd [unclear] were under threat. But the lighting designers themselves, they
[unclear]. Okay, so then, yeah, we also had at the end, first ideas of what the projects
could be. Building a new culture is already mentioned there.

9.2.16 acquiring lighting design, arhcitercture players, etc.

9.2.17 migrating from the firnge world of theatre to the doemstic mainstream - lighting
DESIGN becomes something people can do for themselves - links to experience
economy idea

And is it possible to get a copy of that at any point? Because it seems to me it captures,
if we're trying to write the case, that's a very good way to [unclear] it, it's a good way of
capturing that story. It's great. That's a lovely little thing to [unclear]. Because that
proves also, then, that it's not just, this was a project and there was [unclear], it's a
timeline.

FS Yeah, and the timeline really starts here. And these things are also very important in
the background; small experiments that prepare both the organisation and the key
players. And the key players, I mean, also [unclear] the original class was, in a way,
involved and [unclear] was, in a way, involved and, you know, I always stated [?]
[unclear] these types of things and they were very curious. I mean, it was really, sort of,
team [unclear]. Apart from the [unclear] also was relatively early involved.

MS2 I think that point as well about it migrating from the theatre, so that, kind of, niche
application area looks a bit more mainstream and it's the retailers.

MS1 I hadn't seen that before, but, actually, that's, you know, one of the periods [?], of
course, is innovation is always about competing for the same markets. But if you can
reframe the model, that's [unclear] through.

FS Innovation is about creating a new market.

MS1 Yeah. Or you reposition the marketplace, because it seems to me, what disruptive
innovation does, it's the same bunch of people very often but you change their
expectations, you change, which is what the sustainability story could also be about.
But if you think about low cost airlines, they didn't begin with the mainstream, they
began with the fringe. Who doesn't fly? Pensioners and students and so on, and then it
migrates. And it's almost unstoppable because it's coming, it's a different framing on
what flying is about. It may run its course, I don't know. But if you take this atmosphere
lighting, you start off with the fringe, which is the professional lighting, theatre lighters.
You learn that as well, you're point is valuable, because you accumulate a lot of the
knowledge and you make your mistakes there, but it's a tolerant community, it's a
different set of rules. Then you sweep in the mainstream, I think that's really
interesting.

FS And that's how it only works. My suggestion is that we take a break here and
continue to talk, because we have to go up and take something to eat.

MS2 Also in terms of Philips building up capabilities in the lighting area, I think it was
around 2004 that Philips Lighting acquired Martin Architectural, is that right? Martin
Architectural were a controls company that specialised in stage and theatre lighting. So
that you [unclear] to gather those capabilities within a [unclear].

9.3 MS2 Yeah. You were very consistent with that as well and [unclear] up with your
provider.

9.4 FS Yeah, because, otherwise, you lose them. But this one got a, I don't know how
many hours I [unclear] about this, over this, to get it sorted. Okay, then we have
atmosphere provider, what is it? And I had this wonderful benchmark example, I found
that from ICI [?] buildings [?]. Because, actually, it's, sort of, the same, it really is the
same. And this is also how they understood what needs to change. And then I've got
the plan here, but this is paint and here, electronics. And I said, yes, that's true, but the
principle is the same.

10 philips tradition for innovation and for breaking new ground - but both a strength and
a funneling weakness - need to link the market and tech innovation streams

10.1 And then I said, and Philips is very good in spotting things that are going to come. I
mean we always have been world champions in invention. And there was a saying also
in, in my circle of friends. They said that once Philips starts new inventions or new
innovations, you know that the market will start one to two years later. And that has to
do with, with the affability of the people here to talk with the people here. And that, that
was why I then draw this thing with the expletives and the Latin and all these needs,
because the marketeers were only talking about explicit needs, while the guys here were
still, were already understanding the explicit needs. But since there was this perception
problem, you know, and the arrogance…
10.2 Philips is very good in spotting things that are going to come. I mean we always
have been world champions in invention. And there was a saying also in, in my circle of
friends. They said that once Philips starts new inventions or new innovations, you know
that the market will start one to two years later. And that has to do with, with the
affability of the people here to talk with the people here. And that, that was why I then
draw this thing with the expletives and the Latin and all these needs, because the
marketeers were only talking about explicit needs, while the guys here were still, were
already understanding the explicit needs. But since there was this perception problem,
you know, and the arrogance…

10.3 UM Were these guys really understanding of this argument, and the research
people were understanding of implicit needs, or we’re guessing that for implicit needs?

10.4 UF Well, part of them they understood, and part of them they didn’t. But parts of… I
mean, if I’m now here in research and I see how… I mean, look at the whole Wholeneck
[?] story. The Wholeneck actually is about insight development.

10.5 UM Now it is.

10.6 UF And, and they have in, they were, and the whole that has been established in the
year 2000. In the year 2001, one of the, of the CT admission project went there and out
of that came the NVTV. And I mean that was tested, with consumers. The first concepts
were tested with consumers before we even showed the CD. And then so it was really a a
concept for development with later consumers together, you know. And that’s the
reason was so dear. They then, then, CE always claimed that it is, that they only did it
because it’s actually not true. And I mean Research understood very, very quickly,
especially under Ray Havik [?], and also people like John Fitzroy and Lars Wesleich, that,
that this is, that this is key. And the Wholeneck, the Wholeneck is one of the early
answers to this movement of a research organisation.

10.7 DOROTHEA And the problem was that the Standard Marketeers, they never
appreciated it, because they found out there was competition. And there was also a big
struggle with Philips Design, you know. I mean, Philips Design is really good in
understanding the socio-cultural trends, but if you don’t match the socio-cultural trends
with appropriate technology, then we don’t have anything.
10.8 DOROTHEA You know, and I think the Lighting future, in the every first, the very first
word from obviously the Lighting future, the main achievement of that one was - and
that’s where this Pikla [?] landscape was built - the main achievement of that was to
how nice the creativity were, because when the three groups came together, there was
the group of technical people, who claimed that they were the only creative one; there
was a group of marketing and Philips Design people, who claimed that they were the
only creative one; and then there came the business guys, who said that they were the
only creative ones to bring things to the market. And at the very moment, because I was
the overall facilitator of that, I put that on the table and said, you all stop now, because
this is bullshit. It is really bullshit. There are different types of creativity, and you need
them all together, and otherwise we will, we will not continue here, and we will end up
nowhere. We need all the different perspectives. And then I brought in this metaphor of
the elephant, and I said to them, let’s… Close your eyes, and they did that, and then I
said, imagine yourself around an elephant you cannot see. Somebody is standing in front
of the leg. The next one is standing in front of the nose. The next one is standing on the
top and can only see the back, and the third one, the fourth one, is standing close to the
tail. And all of them are fat. Touch the thing in front of you and tell me what is an
elephant like? You will get four different answers, and all of them are right, but nobody
has the overall picture. And that’s the same situation. And then it cooled down. And
that’s the reason why I think the Lighting future in the end became successful.

10.9 using the futures workshops to force techies to think more openly and marketeers
to concretise

10.9.1 FS And then we had this, this was very, I think this is really very important, the
alignment of the timing that you are in in order to [unclear] a communication issue. And
to get rid of this blaming culture thing. And then we have the [unclear], so this is
actually all the social cultural stuff. And for the very first time, we met end user needs
on these graphs. And I know that we had enormous debate and the Philips design
people said that it was absolutely impossible and I said, bullshit, of course it is possible.
It is as possible as you can map on these graphs, technology. And that was immediately
completely precise, but you can make an indication. And if you cannot make it then I
wonder why you would need your [?] type of input because then it's useless. So that
was a big debate. And also all the marketing people said that this was absolutely
impossible. And I wanted to prove them wrong because now they also have to become
disciplined. And I really hated it that the technology people always had to be very
disciplined and good with data and the marketing people can hide away with gut
feelings [?].

10.10 detailed description NB of the futures workshop - how it worked and examples of
key insights
10.10.1 No, we didn't have it with presentations, we had big poster [?] sessions and
people standing there and in front of each poster there would be one of the experts
explaining it, giving an introduction and then there would be a dialogue. And the groups
that will come in will be always mixed. So we would have people from, we have the
people from designers, research and lighting. And it was one force [?], so we had 32
people. 16 came from lighting, from the different [unclear] divisions, eight from Philips
Design, eight from Philips Research. All of them, yeah, and then we had three teams, so
we subdivided them into three because we had the three content things. So the whole
workshop design also was sophisticated. And then in the three workshop teams, you
would have a mix from design research and lighting people. So not all of them would sit
together because then the [unclear] couldn't continue and they would also see that in
the technology arena, the technology people would be able to give additional
information in the, and remember, design people would be able to give additional
information and in the business arena, the business people would give additional arena.
So that all these prejudices could flatten [?]. And that worked out really well. And still
we had on the end of the first evening we had this very strange situation with, you
know, under [unclear] and blah, blah, blah. And then [Unclear] said stop it now. I was
very, I was very authoritarian, but only that one time. So that was the future landscape.
Then the second one was the building on the future landscape, we had a big ideation
session.

10.10.2 MS2 [Unclear].

10.10.3 FS No, that's not. That's the business part of the [unclear], yeah. And for that
we had prepared, yes, that was also interesting. We started with a big exercise on
creating awareness for different counties. So we had big maps and on these maps we
had, like, India, United States, Europe, [unclear] the four. And then as a warming up
exercise, this was actually a two and a half day workshop, as a warming up exercise, we
split the whole team into four groups, the four groups that would later work in this on
ideation. And they were asked to write down everything that would come to their
minds in terms of this country. And then after ten minutes, they would move to the
next, so that everybody had been to the whole world.

10.10.4 tools and templates to support the workshop

And we also had very good templates, ideation templates. Where we also used this
Devono session of methodology, of idea generation and idea development with the
green hats and the…

MS1 Okay, different hats, yeah.

FS So here we also had the original decision document, which has been [unclear]
updated.

MS2 Excellent.
FS Then we have also a variation [?] of the workshop. I have all of them still here.
Already we had lots of stakeholder interviews. That one has [unclear]. I mean, we also
had, of course, training sessions for the facilitators in [unclear]. So, actually…

10.10.5 Subtopic

10.10.6 MS1 Everyone had been around the world, yeah.

10.11 facilitation, paryticipation and spreading the workshops out to build a shared map
of the future and its possibilities

10.11.1 How many people were at the workshops, approximately?

10.11.2 FS 40. It depends. So we had, but the idea template was, actually, something
like this. So you had a space for the idea, a description and then a place for some
drawings. And then on the back page there would be what we work on it, what we're
not working on it. Then we had this maturity graph where you should write down
where it was in terms of business technology and need. Some more [unclear]. I have to
look it up, somewhere, I guess, I have one of these templates left. I don't know exactly
where it is now. I thought it was in there, but it's not. But all these things, and they
were really useful tools and we really were very disciplined in developing facilitator
agendas, so that really, everybody knew what was going on and things like that. So then
what is second? The second step was that first who [?] would plot also the existing
ideas [?]? And then we had new ideas generation and simply existing ideas because
they came from the businesses we were making in the scope of, in the existing new
scope. We said, okay, and now you are allowed to think much broader. And then the
next one was plastering [?] the avenues [?]. That was when then done by the core
team. And identifying, particularly [?], the directions and that's visualised here by eight
[?] different types of angles, because it's a whole world of opportunities. And then we
had, like, 11 different business ideas and all of them were described, so you can see the
alternative scope extensions were, some of them were, sort of, market orientated.
Some of them were more business orientated. And then there were also technology
orientated ones and the market orientated was, for instance, lighting for health care or
disinfection or atmosphere creation or building light integration during construction,
signage and guidance and jewellery. Then from the business model perspective it was
leasing consultancy or recycling. And from the technology perspective it was threads
and [unclear]. And then we had also such a kit [?] where it was displayed in terms of
expected size, but very rough. And then we had curve [?]. The first scope extension we
had two sheets and one was explaining what is it all about. And the other one was
explaining a little bit of the business rationale behind it. And also a business need
technology roadmap and other enablers. So these are all tools that we then do and fit
in for each of the different sorts. And then, of course, on a very high level, that was the
workshop in September. And on the basis of this, they [unclear] the total decision that
we should go into atmosphere creation. So, okay, the first one you see, now we have all
these ideas and we identify these possible strategic fits, if you now look. And then we
say, okay, which ideas belong where? And then identify if a company fit the criteria and
the growing rate of working. So that was actually the flow. And already that
visualisation was quite a challenge. I mean, I was thinking a lot on how to make clear
what we are doing. And then this was, you know, so this was actually the kick off and
this was the feedback off the visual landscape, this was the feedback off the ideation.
This was this Scots thing and this was the next steps. And here you see the [unclear] so
the involvement of more people and by involving others, of course, you also create
ownership from the bottom. Because, I mean, also people experienced it as a privilege.
So this was it then the time [?] [unclear]. Then all it needs is to be aligned and this is
worked [?] off a, against the idea there we also made a definition because there was
also a misunderstanding between an idea and a business idea. And people first needed
to learn that the business idea comprises all the three angles while everybody from his
personal perspectives thought an idea was just what they would contribute. But a
business idea really needs from the very beginning, all the different angles. So that's
one of the misunderstandings.

10.12 design and operation of these cross functional futures workshops

10.12.1 FS No. Here's the historical example of [unclear]. That's a good one. No, we
didn't have it with presentations, we had big poster [?] sessions and people standing
there and in front of each poster there would be one of the experts explaining it, giving
an introduction and then there would be a dialogue. And the groups that will come in
will be always mixed. So we would have people from, we have the people from
designers, research and lighting. And it was one force [?], so we had 32 people. 16
came from lighting, from the different [unclear] divisions, eight from Philips Design,
eight from Philips Research. All of them, yeah, and then we had three teams, so we
subdivided them into three because we had the three content things. So the whole
workshop design also was sophisticated. And then in the three workshop teams, you
would have a mix from design research and lighting people. So not all of them would sit
together because then the [unclear] couldn't continue and they would also see that in
the technology arena, the technology people would be able to give additional
information in the, and remember, design people would be able to give additional
information and in the business arena, the business people would give additional arena.
So that all these prejudices could flatten [?]. And that worked out really well. And still
we had on the end of the first evening we had this very strange situation with, you
know, under [unclear] and blah, blah, blah. And then [Unclear] said stop it now. I was
very, I was very authoritarian, but only that one time. So that was the future landscape.
Then the second one was the building on the future landscape, we had a big ideation
session.

11 language and vision construction

11.1 metaphor as a way of explaining and bridging across the organization

11.1.1 GERARD 2 I think essentially you’re right, and I think there are… What I’d like to
get out if we can is the sense that actually these major changes of mind, these really
discontinuous things, there’s a pattern to how they actually happen. It’s not just
random. And it seems to me what we have is potentially three linked stories: life in
futures, atmosphere provider, and the on-going story of sustainability, each of which
can be framed as this is breakaway. This is seriously different stuff. It’s a challenge not
just faced by Philips but by many. What’s interesting to me is, homing in on the central
study, there are some tools that you’re aware of using, or you become more aware of
using; perhaps I can phrase it like that. I’ve written down, for example, metaphor.
Actually, these things are really powerful. We know that, but from the how to explain
your story about the jungle Len Highway [?]: that’s a powerful metaphor. The elephant
one is a well-known one, but a powerful one, I think. The captain of the tanker and the
speed-boat: there’s something about pictures. It’s very interesting. Yesterday and today
there were some direct pictures, not many of them necessarily, but ones which clearly
provided a focus. That one, for example, and then the one you showed us in the other
room which you’ve reproduced again here about the diffusion code [?]. They’re pictures
that lodge in your mind and begin to be the language of change. And then of course the
words themselves: there are certain phrases that seem to come in, and it just feels to
me there’s something that we’re beginning to tease out which is, if you’re a change
agent, if you’re actually part of doing what you’re trying to do, and the challenge is to
change the corporate mind into a radically new direction, you don’t say: you’ve got to
change, ‘cos they won’t. But how, and what are the sort of tools and techniques? And it
feels to me, to take another of your metaphors, the apprenticeship might have been the
lessons you learned out of who you are, learning by bGerard ping into things, but you
learned some of that. It was much more explicit, and Gerard could sort of substantiate
that, in atmosphere provider. You were quite deliberate about the use of some of that,
and that’s the kind of journeyman rather than the apprentice. You’re actually trying the
pieces out, and then the master craftsman, where arguably you are now, is, as you told
me yesterday in the car, you’ve learnt a lot. You wouldn’t do it the same. You’ve actually
learned lessons out of atmosphere provider, which you’re now trying to apply in
perhaps the biggest challenge of all. You know, the whole sustainability is a huge mind
change. That feels to me that there’s something really interesting there. And I think
you’re right, I think the way into it might be to tell the stories and then so we’ve got the
actual sort of timeline, and then to see what was going on in there that helped make
things happen. That feels to me really exciting.

11.1.2 Gerard framing the mindset change problem

GERARD So how do you, how do you get the company to change if at the Board level
there’s not a realisation they need to. We don’t need to answer that now, but I think
it’s, it’s good to put in some questions as we go along. That’s great. So as you tell the
story as well we’ll probably just zoom in on certain things and then ask questions around
them and then zoom out.
11.1.3 changing the organizations mind - dorothea demonstrated by use of an example -
the emergence of e-mail - to show how things don't happen fast, discontinuous
innovation often takes a long time to relaise and mature but the mindset which triggers
it is different

I think it is really also important to show the timeline, you know, because… And this is
something that also has to do with innovation. There is this misconception that really
new things fall out of the sky, or that innovation, that innovation happens quicker
nowadays, and that’s not true. I mean I have an example of that here in the, and that is
the email example, and that’s in the first picture, like in picture, in the first PBC meeting,
sort of feedback session, whatever, steering committee session, there was, it was highly
important to David and the PBC, because that was when, when one of our really bought
out management top guys, their first PBC meeting, they were there for the first time. So
they were all like, we want to position Philips in a very good way, Philips Lighting. No, it
was the second one. And, and, and I gave that, it was the one after, after the future
landscape thing. And I gave the example of… And I read the statement that real
breakthrough innovation still happens over a long period of time. And then I got,
[unclear] said, this is not true: look at all the electronics industry, the computer and ICT.
And I said, what about also there, what you have in this yearly or half-yearly cycle is
product diversification, but it is not really new stDorotheaf. I mean it is the pace made a
little bit quicker or more megahertz, or I don’t know what, but it is not really, really new.
But what is really new there is for instance the, the emerging of a new way of
communicating like email, and if you look at emailing, it needed 20 years to come from
here to here. And then I built that up on how these 20 years happened. Let me see
whether I can find it quickly or not. Because it started with, in started it, in that book,
maybe in Computer Landscapes.

[Unclear asides]
DOROTHEA So it, it in any case it started in the end of the ‘70s with - no, it’s not in here -
it started in the end of the ’70s with single data transfer from the particle accelerators
to the research centres, or from military. Then it built up, was not visible, what you see
is what you get, but this very cryptic way in computer, small computer corporations in
the beginning of, of the ‘90s. Then the universities, the universities started to have since
email or these types of things, and then, and it was interesting because the
synchronised computer project was run in 2001, and I had given out to everybody a
post-it and asked them, please write down since when you have used email. And I said, I
will not, I will not ask you to share that, but… And I said, please do that, and then I’ll tell
you the email story. And most of the people, for instance Theo von Goerden [?] was in
that room, and I, I knew that he didn’t do emailing at that moment of time at all. He
always gave it to his secretary, you know. And still it was already around for more than
20 years, you know. And, and I remember that Gottfried du Tournay [?] went after that,
after the PGC session went to Huhn and said, oh, can you please give me that example,
because it’s really, I didn’t see it and it’s really the question of which type of innovation
are we talking about? And I mean email was of course a destructive innovation because
like SMS it’s really completely changed the way we are communicating. But many other
things are not. And that understanding wasn’t there, so I think what was very important
was also that all the time it emerged, set by examples, examples that came from
everyday life, they started to realise that there are different types of innovation. And
why was that? Because after Centurion, the whole organisation was pushed into an
operational excellence mode, because in Centurion that was in the ‘80s, in the late ‘80s.
Philips was almost bankrupt, and we always had been a very good innovation engine,
but there was no cost awareness at all within Philips, so at the end of the ‘80s Philips
was almost bankrupt, and then there was this big Centurion programme that only was
focusing on cross down and operational excellence. And after ten years of doing this, we
had our lost our innovation effectiveness. We really lost the skill and the knowledge on
how to innovate out of the box, except for in research. But because everything in the
Product Division was so much focusing on dia [?], and research was really sort of put
apart, you know, the communication problems that would have been there anyway in
some way were even deeper than in other organisations. And that was really a language
problem, a language and shared experience problem. It’s not because of unwillingness
or something, but people were using the same words but meaning something
completely different. So there was complete disconnect.

11.1.4 value of shared futues workshops in building common vision and language

power of building shared view and common language

So did you have a lot of ideas that were then formed [?] to integrate in the business
ideas or were people coming up with business ideas?
FS No. Because it happened in the group process and we mixed the group so that people
from different perspectives were coming there. And a template was built of such, that
the three different things were asked.

MS2 Here with the graphs, okay.

FS Yes. That's the reason why all the ideas where the [unclear] was missing or there was
not at all a clue on the business model, they were filtered out by them automatically, you
know. Here it is here, see, this is the template. So the first thing is the…

MS1 That's very interesting, yeah.

FS So this part of the idea is what do we offer? The people need a breath of technology
in the business model and what is the diagram? So there was a lot of thought going into
this one. And then this was the idea development. And here you see that we used the
Devono [unclear], so what are the advantages, what are the risks, how to make it better.
And here we have the people maturity, the technology and maturity and [unclear]
maturity. And then you can also see where to focus the effort.

MS1 You see, that, again, that's a powerful picture. That's my point about some
common visual language. Because now you don't need all the details, you see that
colour coded strip, and that's colourful.
11.2 role of foundation documents as a language development and transmission device

11.2.1 But, again, we’re back to this, this… in this case it’s, it’s making something explicit
so that we are really talking about a common understanding in this space, not an
assumed understanding. But the more we, we go into this the more it seems that there
are some generic themes and techniques which are hugely powerful, because without
that picture and that discussion that that represents, we carry on thinking in the old
ways and making the same old assumptions.

11.2.2 UF Yeah, and, I mean, this is also something that we… that we developed in order
to make explicit why we… what we did, because we were… I mean, this, this was a really
sort of a, a defence mechanism, you know, because people only wanted to talk this, and
we said, but wait a minute, how can you talk about this as long as we don’t have a clear
picture of this?

11.2.3 UM And also, with, with the finances, people look at… zoom in and say, light
[unclear] furniture. Okay, bathrooms. [Unclear] so many bathrooms, so people might
spend a certain [unclear] [overtalking].

11.2.4 IV Yeah, you get a number in a market.

11.2.5 UM Yeah, you’re talking about 30 to 40 billion turnover [unclear]. Why would
you want to do that? So we’re able to use this to say, well, hang on a second, the
platform to be developed here will then scale across the home, across the office, and
then we’re talking. You know, 10 times 30 million is 300… [overtalking].

11.2.6 IV [Unclear] as we’ve just done there. It’s something… it’s a boundary object
again. You can start to talk about it and crawl over it and they can come back and they
can challenge it but that’s fine because at least then the dialogue, or the conversation
[unclear].

11.2.7 UF Yeah, but this, this was really… this was really very important and it took… it
took quite a time, both to us but also to them, to see that this is required in order to
understand the, the value of themed thinking rather than product thinking. And, and
only after they understood this one it could be made clear what it is for, really out of the
box and disruptive [?] innovation, not useful to think on a product level but to
[overtalking].

11.2.8 IV And of course it, it, it connects to what we know, and I know Philips knows
about platforms, but the, the trick is not to get a product but to get a platform on which
many, many products [overtalking].
11.2.9 UF Yeah, but in operational excellence you have… you are… you are doing micro
management at this level, and innovation management, you have to go for this thing,
and that’s also one of the disconnected things. That’s one of the [unclear] between
operation excellence and innovation excellence, how to bridge that gap of… a gap… a
gap of the obstruction level. So one of the key messages, I guess, is getting the
obstruction levels right and really be aware of where you are [overtalking].

11.2.10 IV But, again, it’s a little bit like your position. You have people earlier on,
somebody who’s working five years from market and somebody who’s working one year
from market, they won’t be able to talk to each other because they live in different
worlds, so there has to be some way of bridging or enabling that conversation. It can’t
be assumed to happen, and this is the same thing. People at different levels of
abstraction can’t be assumed to be talking about the same thing, even if the word
atmospheric lighting is in both their, their lips.

11.3 jb ideas on changing the corporate midn

11.3.1 IV It seems to come back again and again, changing the organisation mind,
making a new language and new pictures that they can then start to make use of, and
that’s… almost it’s a testament to success if they internalise those and they find them
useful to explain what they’re doing. They changed their mind, and that’s an explicit
variant… version, which means almost that, if you think of what’s in the toolbox, it’s the
ability to put… it’s, it’s, it’s [unclear] but being able to draw a picture that captures it
seems to be really powerful, or hit the frames that suddenly is on everyone’s lips to
capture it. Very interesting. I mean, we did this… I mentioned the [unclear] company in
medical devices that we did an innovation audit for. We went in at just the right time.
There were a lot, lot of things happening. There was a lot of internal change, but one of
the things… I gave a speech to their annual engineers conference and I coined the
phrase, do better, do different, and essentially do better is doing what we do but better
and it embraces all the sort of incremental innovations, the road map kind of stuff, and
to be different is, well, different is the opposite of that. And it, it just hits the [unclear]
language and it, it gratifies me, not personally but that this process happens, because
they’ll now use that, and this is, what, seven years ago we did that work? But some
conference I was at recently and somebody I’d never met from another division in this
corporation was using that language and I thought, well, I think that’s language; that’s
what it does, just like visual and [unclear], and that sort of thing [unclear], but if we
think of it in toolbox terms then that’s, that’s a hugely important thing.

12 the project 2003-5

See document: Introduction to Talk Atmosphere.pdf
12.1 was moved to being under someone else and also was not put with the LED new
division
12.1.1 And you see the atmosphere provider, so this is how it started. We only had
[unclear] and a lot of background information on the documentation about [unclear], so
this is actually [unclear]. It was started on 1st July in 2003. The deliverables was to
bring atmosphere provider [unclear] to life and show [unclear]. The investment
between August 2003 and December 2005 was for the whole group and all the
demonstrators and all the publications, everything was included to [unclear] €85 million
[?], so it was not that [unclear]. And actually this was also interesting because at the
same time there was a, another new innovation approach pioneered [unclear], which
was called [unclear] innovation, [unclear] innovation that went to a lot more money.
And [unclear] Jenson, our direct manager [?], she came only… I mean, she came and
decided that atmosphere provider would be closed [unclear]. And so she was under the
assumption that [unclear] having this big budget of €50 million over the next time, or
even more. I don’t remember how much it was altogether, and that was [unclear]
budget plus ours together, and she, she never, until she saw it here [?], and, I mean, she
was [unclear]… we gave this to her before the publication but obviously she never read
it. So until she came to the PPC [?] meeting where I distributed this she never realised
how small the money was that was going into our activities, because over three years, I
mean, we were really highly efficient and I think that [unclear] had never, never again
and also never before had such an efficient [unclear]. But, okay, I mean, that’s not our
problem anymore, so the context of the assignment was [unclear]. And why was it put
under global marketing although it was initiated as [unclear]? Because at the… at the
time that… in this period of time between 2000… between January and August of 2003,
the new business creation book was repositioned as a solid lighting group, because
some say lighting was a new technology and it would have impact on the other business
group. And then they said that they wanted to have an extra business group for that.
The disadvantage… and, and then… and then [unclear] that if it is only solid-state Latin
[unclear] atmosphere provider should not go there. And then they said why? I said it’s,
it’s very easy [?] because then the assumption is that all solutions coming from
atmosphere provider has to be enabled by solid-state lighting and that’s not going to
happen. I mean, this is just not reliable. I mean, this is not [unclear]. This is not
practical. I said also that whatever you do needs quick wins, and quick wins we would
never get out of solid-state lighting because that was an immature technology at that
moment of time, but in order to prove that this was working and really holding business
potential that we suggested for 10% of the turnover, then it would be a theme that
should have access to all the technology set up available. And that’s the reason why I
really… have really refused to be put under solid-state lighting, and then of course the
question was, okay, and where then? Because of course there was not a logical place
anymore, and then I said although I knew that it would become difficult [unclear] at that
moment of time because Rob [unclear] is a… is a brand guy and he is also [unclear]. He
comes from the PR background for media interaction and things like that. He doesn’t
have any clue about innovation and his [?] understanding of marketing, innovation is not
part of it. I mean, he also has some background in [unclear] and then of course the
whole story is completely different than in a technology company. So, but,
nevertheless, he was the only one who had a cross PD [?] scope, and then I argued that,
because this is the first market driven innovation team, or [unclear] driven innovation
team, that we ever had for lighting within lighting, the best of the worst places [laughs]
is putting it under global marketing. So this is how it landed there.

12.1.2 sponsor became ill so new person took over

But the original idea was to [unclear] it into new business creation, which would have
been really logical, but, okay, so that was… that was already a disadvantage, and then,
right after the start, Rob [unclear] became ill and he went out of his job for at least half
a year, and then he came back on a timely [?] basis. He had sort of a burnout or
something so that’s the reason why we had this position under global market and the
ownership on an executive level because there was no owner and nobody would be
held responsibility. But since it was now positioned under a function [unclear] was not
held responsible anymore so it was… it was really much more tricky than [unclear].

IV Yeah. I don’t know [unclear] by this stage [unclear] had moved back in.

UF Yeah, so also the [unclear] had changed.

12.2 dorothea has to establish credibility and permission from new CEO

12.2.1 A new CEO came in?

12.2.2 UF Yeah, and [unclear] is traditionally… I mean, I knew him from my automotive
time, and I think that helped, but he also knew me as [unclear] along with his CTO, so
CTO is Peter Strongback [?], and Peter Strongback I knew very well because he has an
office and I, I have an office in [unclear], so this is all… I mean, this is… To be honest
these are also the things that, that, that are some of the new [overtalking] and these are
also the things that are very often forgotten when telling these types of stories. If, if
these types of informal [unclear] are not available at present, it, it will not work. You
know, it is really… it is… that’s the reason why I was starting to talk about the hidden
architecture and… but the hidden architecture there [unclear] and then you will also
have the, the social [?] fabric that needs to be there, in place, and it needs to be durable
because otherwise it doesn’t work. And these types of big changes really require time
and require a durable social fabric [unclear] to different layers of the organisation, and
my… and my advantage, I guess, was that I had friends on top levels but also on the
lowest floor level so I really had my access points.

12.2.3 IV And also you’d be willing to work with them, because the fact that the chief
exec changed wasn’t a deal breaker; you were still able to make connections.
12.2.4 UF Well, I went to the next one and said to him, look, since, since my main role in
this year is to hold this idea, so when it became clear that [unclear] would become the
new CEO I, I went to him and said, you have been participating in this. He, he had been
out of the picture for a few months [unclear] to then come back, but this is how it
ended, and David [unclear] said to ask me to set it up for continuation and this is the
suggestion how to do it but obviously there is no decision taken, since [laughs] at this
moment of time we don’t have [unclear] is not really onboard so what do you suggest
me to do? And then, then he said, well, what do you expect from me now? And I said,
Tao [?], I do know that you will not take any decision until you are officially, officially
announced but if you say that, once you are officially announced, you will support it, I
can use the time in between in order to build a team to prepare for start up and all that
so that, you know, a few weeks after that we can do this official kick off and all that type
of thing. If you say you don’t want to support it [unclear], please let me know because
then I’m looking for a different job. It’s very simple. And then he said, oh, no, no, no,
no, no, we will give it a chance, and I said, okay, then I agree with you now that I’m
going to prepare for hmm, hmm, hmm, and he said, yes, do that. And I said, I’m not
talking about… to this about… about this to anybody except for Claus [unclear] but we
will then, once you are officially in the new role, we will announce that there is
[unclear], blah, blah, blah. But I thought [unclear] I could start to have [unclear]
interviews and stuff like that, because I said, it’s also not credible if we delay the follow
up for too long. And that was the conversation that took place in April, and then in June
we had the first presentation and then in June I also was officially allowed to have
[unclear] [laughs]. So what was the characteristics [?] of the assignment? It was
additional… information for additional [unclear] of what we would call disruptive [?].
[Unclear] in the form of content [unclear] phase on of change management. That is all
what we made explicit there, and then the core team [?], and we had the extended
team and [unclear] that was focused on results, commitment and dialogue [?]. These
were the main principles.

12.3 gerard joins the team - inspired by D's presentation

12.3.1 But just briefly, I’ll just briefly share a story here, so it was in March 2003 I was
working with the strategy team [unclear] at the time and I was in their annual
management meeting and [unclear] came in from lighting to talk about atmosphere
[laughs], atmosphere provider, and he showed us this diagram here [unclear].

12.3.2 UF This diagram? What, on this one?

12.3.3 UM That, that picture there, so I was sitting there listening to [unclear], March
2003. My assignment was three years so it was coming to an end in May 2003, so I was
beginning to look for another job. Anyhow, I was sitting down listening to [unclear] talk
and I was really [unclear], wow, this is the most amazing… the potential here is
unbelievable; it’s just fantastic, so I was sitting down, and I was perhaps one of the only
people in the room jotting down all these different connections and, you know. So
there was a guy sitting beside me [unclear] what do you think of this presentation? I
said, this is the most… [laughs] one of the most amazing presentations I’ve ever heard
of, and I guess it was [unclear] just talking about atmosphere provider and the potential,
even though it hadn’t formally started at that stage. So the guy sitting beside me said,
drop by my office tomorrow morning at about nine o’clock, so I dropped by. It was
Peter Green who used to work [unclear], so I dropped by… dropped by his office and he
said, what was happening for you yesterday [?]? And I said, God, that presentation. I
said, I, I’ve got to get into that organisation one way or another, so he said, Well, Claus
and [unclear] are very good friends of mine, so he rings… he said, would you like to
meet Claus Vectum [?]? So I said, can you arrange it? He said, yeah, sure, so he picks up
the phone and rings Maria, so two days later I had a meeting with [unclear] and Claus
[unclear], so it’s kind of a top up and bottom down, so it’s just interesting how these
different synchronous events occur.

12.4 3 core projects - funrniture, etc hchosen to explore different frontiers

12.5 set up demos in the lighting centre - retailing , furniture and

12.5.1 So the [unclear] is the lighting application centre. It’s, it’s a building right beside
[unclear] headquarters [unclear] and it demonstrates… it’s a place where we bring
customers to demonstrate how lighting can [overtalking] the business.

12.5.2 UF And there were no [unclear]. [Unclear] it was not a common way of [unclear]
at that moment of time [unclear]. In the meantime it is, but at that moment of time we
were also really, really within lighting [unclear] that way of working. [Unclear].

12.5.3 IV So this is in their place?

12.5.4 UF In their place, yes, so that was already in this period so that we really went out
into the market [unclear], you know. And these are quotes from potential customers.
It’s something I will definitely [unclear]. And then the next one…
12.5.5 UM Actually, also keeping with the [unclear] theme as well, so there’s the
modular system part. There was the… the lighted building there [?] is the biggest
lighting showroom, or exhibition, worldwide, and that… the theme for flexible lighting in
shops forms one of the themes then [unclear] 2006. But another one is if you… in
Philips’ 2007 annual report. Now, Philips… sorry, one of the presentations [unclear].
Towards the end of it he has this idea of like a magic wand, so in a shop, for instance, if
you’ve got… if you’re in Benetton, for instance, and you’ve got green jumpers, pink
jumpers, blue jumpers, and you’re the shop assistant and you want to change the
atmosphere, you pick up this pen [?] that has a camera built into it and you point it at
the colour of the garment, and then what you’ve pointed up to the lighting, you press
the button and then the lighting knows what…

12.6 development work explored and logged varius patents

12.6.1 UF That was also developed in that time. I mean, like we, we went… we [unclear]
so we have also [unclear] development, so we had, like I told, told you, the, the two
letters in development and concrete project activity. So whether we have the, the
patents [?] in all that stuff.

12.6.2 UM [Unclear].

12.6.3 UF [Unclear] we have the emerging of the PD lighting strategy [unclear].

Atmosphere provider opened a new exciting innovation, blah, blah, blah, [unclear] way
of working… No, that’s comes later then, because I think we, we also tried more than 50
patents in that time, so… but then that comes later on.

12.7 building prototypes and engaging others via demos, photos, etc - but sets up
tensions with existing groups who think it's their patch

12.7.1 UM No, it’s a shame because I think shortly after we had done this we had got a
professional photographer in to take… with models, but we built this bathroom
[unclear], but we had these models in and a professional photographer and he took the
most amazing… I’ve got the pictures… the most amazing photos. But the time when we
were putting this together we just had an artist’s sketch, even though the demo existed,
but we just put in the artist’s sketch, also to show how the tools we were using to test
concepts with consumers, worldwide, using an online [unclear] quantitative market
research team where we do sketches and then ask people questions and get some
feedback. So with the Bartem [?] Project we were looking at a whole range of different
applications for that.
12.7.2 UF Yeah, and you see here that it was [unclear] so it was a new use of light and a
new application so it was more complicated. It was definitely complicated, I would say,
because, I mean, the first case, we of course had to fight with the existing organisation
because there were quite a few people who protected their, you know, [unclear]. And
they said… and they claimed that shop lighting was their domain so why would they
come to somebody from corporate marketing and tell them something else about their
application domain? So that’s was the struggle there, which was not really easy. And
the other thing was that the, the conventional shop channel was mainly directed to
[unclear] management, while with the concept of atmosphere creation you would talk
to interior designers and architects and marketing people because now it would become
a communication tool. And it was really difficult for the conventional market channels
and with… and… to understand that, although it was the same application area, the
entry point would be different. There was also a couple of problems.

12.8 the tension between old paradigm - lighting as a cost item sold to procurement
people who are concerned with cost of ownership - and the new model of atmosphere
provider

12.8.1 Yeah, but, I mean, there was a lot of learning because, I mean… and the whole
organisation was really tuned towards total cost of ownership, and about total cost of
ownership, you talk to facility management and purchasing guys but for atmosphere
creation you talk about marketing people and positioned [?] people and interior
architects and light designers and whatever, and so it’s a completely different type of
people. The problem you also have, you need a different type of sales force, and, and,
and this is something where you… what you really have to understand at a deeper level,
you know, and we also… we needed some time to, to understand why there was this
problem and why there was this disconnect. [Unclear].

12.8.2 IV Yeah, but it, it’s interesting because that’s… there’s a very famous bit of
research on what’s called component and architecture innovation, and that is, when
you’re just changing components, it’s not a big problem but when the whole approach
changes, the architecture [unclear], it’s a whole knowledge system and it’s exactly as
you’ve described. The people you would normally talk to in the old model are no longer
the people so you need to rewire, reconnect to those.

12.8.3 UF Yeah, but the other thing is also that by doing this you open up the access for
a pocket of money, because before we were in the… in the purchasing… in the
purchasing budget [unclear] and now we would get access to the marketing budget, and
that is of course of a completely different size and it also is… it lies under different
decision criteria, which makes it very interesting because marketing budgets are
upgraded more often.

12.8.4 IV Yes, and they’re, they’re not driven… I mean, I can imagine that, yes.
Procurement is always on a cost down basis.
12.8.5 UF Yeah, exactly, and this is on a added, added value thing [?], but to, to really
clarify what the… what the benefit is, you know, and get into that… into an added value
discussion rather than in a protected, you are… [laughs] you are eating up my grant,
type of defence thing, you know, that, that was one of the main cultural changes of that
first project.

12.8.6 IV Whereas this is a new area so it doesn’t pose…

12.8.7 UF This is in a new area. That, that, that was not a problem we had there.

12.9 learning from bathroom for other furniture applications

12.9.1 And always at the… in fact, thinking back, the fact that we had got [unclear] in
what used to be two offices side by side, I mean, it’s still remarkable that we got
[unclear] for that demo in there, the shower, a 16 square metre [?] [unclear] bathroom.
And our thinking was always that the bathroom would be a, a standalone business in
itself but the lessons we’d learn here in terms of modules, in terms of connectivity, in
terms of propositions, would be scaled into the [unclear] [overtalking].

12.9.2 IV Well, I’ve noticed that the title is embedded in furniture, not bathroom
furniture.

12.9.3 UM Yeah, that’s right.

12.10 key role of foundation documents as boundary objects - captured learning and
shared it across
12.10.1 this is actually, I guess, also the moment where it becomes very important to, to
introduce these, so this is actually the documentation of the theme development. It’s
the three books. We’ll come to that later. But the first one is also something that we
had never had before in Philips. It’s what we call a so called need map, so we, we
identified all the needs of people atmosphere along the two [unclear] activity
experience, [unclear] experience and emotional versus rational, and then you get a
whole… And they were [?] all described, you know, and then you get something like this
where they are all clotted [?], you know. And this actually the description of the
[overtalking], and we never… and they are grounded in, in social cultural trends and in
society drivers and all that stuff. And then for different application areas they were also
mapped along these maturity graphs, although that of course was not possible, but as
we see [laughs] it is [?]. So this was the document that we developed here in that
period of time and tried to capture all the experience and [unclear], and we said, since
it… since it is market [unclear] and end user driven, we start with the end user in
understanding them, you know. And then this… and then what we discovered after that
and also in, in the discussions with… around flexible [unclear] is that talking about
atmosphere creative… creation lighting and talking about total cost of ownership is
completely different, so that’s the reason why the second document we did was about
[unclear] atmosphere. So what’s the language behind it? And we go into more of that
later, and then especially out of the bathroom experience but also from, from the
flexible [unclear] we then said, okay, now when we go to build these types of solutions
and we see what is the starting point of the solutions that we have today, which is all
the different components, what… how… what are the types of solutions that we
envisage for the future? And this is actually…

12.10.2 UM Yeah, [unclear] [overtalking].

12.10.3 UF Yeah, this is actually in here, so it is… it is one system with, with light
modules, so this is the [unclear], whatever. It may be put into some [unclear] and it is
connected to some lighting control, and for lighting controls we [unclear] and we have a
user interface device and we might have [unclear] that also give additional information.
And the whole thing, that is the lighting solution that, in the end, might enable
everybody to be his own light designer, you know, because what we also figured out in
this project is that it is really important at this moment, so that was, what was the
situation? So this actually is the vision, and the… and the mindset should… or the
[unclear] that we want to facilitate, so we say, the situation is, today, that somebody
has a desire [unclear] a complicated and lengthy and very expensive process, every
atmosphere can be created. However, this is… this is then a very unique thing for only
the very rich people. What we want to do, our, our vision and dream is that we have
everybody who has a certain desire, we provide them with [unclear] and simple
[unclear] types of solutions so that they are enabled to create their own [overtalking].
That’s, that’s smart customisation and that’s the essence of atmosphere creation and all
the solutions that are required in order to enable everybody to be their own light
designers. That’s the idea, and what is it then and, and how we do it and what, what
are the types of functions… functionalities that are required and why do we believe that
these functionalities can be developed over the coming years? That’s actually all written
down in this book, and these books are [unclear].

12.11 book 1 is really the need map, building a vision of lighting as atmosphere not as
cost related functional device

12.12 has been used subsequently for philips research to explore other new lighting
ideas - it is very much a foundation document

12.12.1 These are the foundation documents because they form the foundation for the
whole big theme.

12.12.2 IV And they… now I’m beginning to understand. They helped you in that interim
between the lighting features project [overtalking].

12.12.3 UF No, well, the foundation document… so this, this is where [unclear]
atmosphere was created. Then talk [?] atmosphere came here. Talk, and then create
and build came here. I think it was published in June or July 2005, was it?

12.12.4 IV In 2005, yeah.

12.12.5 UF I, I remember that at Easter we were sitting together and, and there was a…
there was a, a, a [unclear] plan and that was [unclear] atmosphere for all the business
models and partners and stuff like that, but that was sacrificed to, to the end of the
project, which is too bad because I think, for, for the business, that would have been the
most important one.
12.12.6 IV So… and those doc… because this is what you were saying in the
presentation, which I thought [unclear] provides a focus on which many more people
get drawn into understanding and to working with…

12.12.7 UF I mean, this one actually is still, in research, regularly used. Since, since it has
been published it’s regularly used for [overtalking].

12.12.8 IV [Overtalking].

12.12.9 UF Especially this one is used by Philips research for, for new product concepts
for lighting.

12.13 foundation dox as both a learning capture - they were linked to multiple
workshops - and also a boundary object

12.13.1 And so it’s a great way, as well, to create a dialogue [unclear]. For creative bills
[?] we might have had maybe half a dozen workshops with different technology people
coming together and…

12.13.2 UF And for talk we had… I mean, also this was a way to involve the different
target groups, so this was… [overtalking]. And here many of the lighting designers came
in.

12.13.3 IV So these were created as a consequence of workshops?

12.13.4 UM So these are all the people that came together and…

12.13.5 IV So the documents predated or followed the workshops?

12.13.6 UF They followed the workshops.

12.13.7 UM They followed the workshops.

12.13.8 UF So we involved lots of people from different organisations, and by that we

also created co-ownership of course.

12.13.9 UM So we always have an ethos in the team to really acknowledge anyone that
contributed and helped us out and…
12.13.10 UF And, and, I mean, the trick is that the, the general structure of these
followed the experiences in the complete project, so without the experience in those
three projects it would not have become evident that we needed talk atmosphere and
also what would be the type of content that would be required because in talk
atmosphere we talk about the qualities of life. We talk about the experience, how is the
experience or cultural perception of light, you know. [Overtalking] activity domains and
what is specific to certain activities or what type of… what type of qualities does the
atmosphere need to reflect so that it is appropriate, that it is appropriately supporting a
certain activity. And then in the end it all leads into a, a light design briefing and how to
set that up, and that… and that… And actually, in, in a way, we have created our ideas
[?]. We have created a dialogue. So this is actually the theme development and here
we have… we have the project [unclear], and it was something like this as well, like in
the style of decision process but…

12.14 key was high involvement in workshops and then in credits and sharing
'authorship' of the dox

12.14.1 So we involved lots of people from different organisations, and by that we also
created co-ownership of course.

12.14.2 UM So we always have an ethos in the team to really acknowledge anyone that
contributed and helped us out and…

12.15 way of engaging in the prototyping porcess - a how/why btree of problem solving

12.15.1 So it was, yeah, so that kind of balancing off of being involved in the demos,
which were communication tools, as well as us saying, what it is… what else can we not
know about [unclear]? What are the… what are the barriers that we’re banging up
against? How can [?] we integrate some of those areas into [unclear]? So with the
[unclear], I mean, basically you’d walk in. You wouldn’t see any of the wires and stuff
behind it but there was kilometres of wiring, hundreds of luminares [?], and saying,
well…

12.15.2 UF This cannot be [unclear] in the end [?].

12.15.3 UM You know, people would pick up a, a bottle with a sunflower in it, which
represented summer, and they’d put it on a little dot and the summer atmosphere
would happen, but behind that would be the laptops and hundreds of [unclear], so
we’re saying, so this is how it’s done today, with a lot of money and a lot of time, so how
can we make this now very, very simple? So how do we get rid of five kilometres of
wiring? How do we get rid of 300…?

12.15.4 IV But you’re not trying to solve that problem yourselves?

12.15.5 UF No.
12.15.6 UM No.

12.15.7 IV You’ve got a lot of other minds on the job?

12.15.8 UM Yeah.

12.15.9 UF Yeah, and, and we… and we knew that we couldn’t solve it alone.

12.15.10 UM Yeah, and, and even if [unclear] down to…

12.15.11 UF To the solutions.

12.15.12 UM To the solutions, and bringing it down to what are the functionalities,
yeah?

12.16 managing the levels of abstraction - and linking them to estaboished knowledge in
the firm. that's why bathroom worked but why they dropped the fragrance project - too
much unknown

12.16.1 UF And not what is the technical solution for a certain product? Because that’s
the wrong [unclear]. It, it’s really… it, it’s really… and that’s the reason why I think that,
that this has also been developed by people with a more technical background and a
sort of scientific education, because we are used to jump on abstraction [?] levels, and
social, social scientists are not that distinct in doing that. That’s my assumption. They
are not as disciplined. I think this really requires quite, quite a good thinking discipline,
always really knowing on which level are you and what belongs where. Okay, so this is
the bathroom project. We’ll go deeper into that later, I guess, and we have light
[unclear]. The [unclear] was that we had a new light combined with a new scent in a
new [unclear] [overtalking].

12.17 3 dimensions of unknown too much - though light in fragrance has possibilities

12.17.1 UF Yes, and, and, and [unclear]. I mean, she also did quite some good work
because first of all she taught… well, she identified how to structure [?] the fragrance
market, you know, what type of fragrances they are, what type of companies, which
ones to talk to and why would be fragrances be used, when would they be quantitative
in a positive way, when would they be quantitative in a not so positive way [laughs], and
all these types of things, you know. And then the next step was, is there a match
between certain [unclear] and certain light, light colours or things like that?

12.17.2 IV I mean, I, I think in some ways the, the, the, the thinking is dead right. You
know, if you’re talking of experience then you’re almost [unclear] sound as well, but
[unclear] it’s too many degrees of freedom, so…

12.17.3 UF Yeah. This, this, this… okay, I mean…

12.17.4 UM But you see a lot of products on the market now that are plug in air
fresheners that have a light in them, and, and I saw on the UK TV there was an air
humidifier that kind of sits on the kitchen table, [unclear] size, fill it with water and it’s
light and it’s fragrant as well. But the thing is that it’s a fragrance device with light
[unclear] feature, rather than it being [unclear].

12.17.5 UF Yeah, and the trick is also that it really needs to be very consistent, and that
is very much depending on cultural and personal backgrounds, what you [unclear] as
consistent, so this project has stopped [?].

12.17.6 UM But just one other thing as well, the focus was light and fragrance but I think
as well, what we wanted to do was bring this into the area of understanding the senses
[overtalking].

IV And in some ways though it, it sounds to me as if, in terms of a theme, that was
absolutely right. It still is absolutely right. It’s execution may require…

UF Yeah, and, I mean, you see that they are… they are… if you look at this, this book,
you have the [unclear] five challenges, so the five challenges that we have described to
you.

UM [Unclear] so having a, an orchestrated… so light consistent with fragrance,

consistent with the interior decoration, consistent with sound, so all of those things, and
what we’ve found is that, in terms of people’s perceptions of an atmosphere, is that if
one of those things is inconsistent with the others [overtalking].

UF So the, the trick is that… the, the fifth challenge says [unclear], and then we have, for
instance, the functionality [unclear] with other stimuli, which could be smell, could be
[unclear], could be whatever. Automatic lights [unclear] creation based on additional
[unclear] input so that you get some feedback. I mean, if there is… for instance, if there
is a sensor that sees that there is some coffee smell in the room, it could turn on… put
on a certain type light setting, or this type of [unclear].

UM Even, even in the gaming world, you’re, you’re playing games and it’s the lighting
and the fragrance, so you go into a, a dungeon or a cellar [overtalking], so it’s all these
different ideas we have.

12.18 ole of FDs to give common language and make explicit boundary objects. moved
from concept and vision to strategy and planning - the road map

12.18.1 foundation docs - were there 3 or 5?

12.18.2 UF Yeah, and they’re all [unclear] in sort of a road map. Okay, to our next one,
so then we have here the foundation document, so they have been developed to create
the basis for a [unclear] global understanding of this [unclear] opportunity, so it was also
meant to facilitate a consistent strategy development, because we thought, at the time,
if everybody stops to interpret that must be a provider in a different way, it will end up
in a complete chaos.

12.18.3 IV And this is… this is back to our what’s the general message? Because I think
that’s dead right. It is about giving this common language, common vision, something
that…

12.18.4 UM [Unclear].

12.18.5 IV And, and almost… it’s interesting, even the way you sort of title those. The
first two are actually getting the concept clear in people’s… and it’s shared, and then it’s
about going and doing it. I think that’s really very interesting.

12.18.6 UM Yeah, that’s right, and the fourth one would’ve been how you actually sell
it, the business model.

12.18.7 IV So just for the sake of argument, so supposing that in a year from now you do
sustainable atmosphere provision, you would, if I’m correct, use foundation documents
to do that?

12.18.8 UF I would… I would build on these and enrich them.

12.18.9 ole of FDs to give common language and make explicit boundary objects.
moved from concept and vision to strategy and planning - the road map

12.19 fds a major effort - distilling over 9 months to capture

12.19.1 like a pregnancy! quote

12.19.2 IV But that’s… but that’s very important because don’t those documents have…?
They aren’t just things stuck between covers; there’s something more about them.
They [overtalking].

12.19.3 UF No, and, I mean, this is also what, what you… what we got as feedback. We
got as feedback that they are really, really good, that they… for the amount of content
they contain, they are relatively thin but they are really what they are called to be,
foundation documents.

12.19.4 UM Yes, yeah, and, and in parallel we’re also sensing, from the organisation,
what are the questions? What are the questions that kind of lead people… not
manage… not necessarily management but lead people in the organisation [unclear]?
12.19.5 UF And I [unclear] that, that, for instance, in research in the… in the [unclear]
and everywhere, you see the manifestation, so the prototype manifestations of
[unclear], so it is really a guarding principal, and many of the functionalities that we
have envisaged there are now shown in one of these [unclear] or in one of the
demonstrators.

12.19.6 UM But this is another thing as well. I mean, Philips produced a book about a
year and a half ago called [unclear]. What’s it called? Something atmosphere or
something? Lifestyle, Ambient Lifestyle, a big, big book, and in it they kind of trace back
how well the projects with Philips research have evolved over the years, but you if you
zoom in on one of the ones like lighting management system, which kind of came from
this book here, you can see that within Philips there are so many different projects and
products that are beginning to [unclear].

12.20 fds - one was vision, one was strategy, a third was trools
12.20.1 Okay, and then the next one is also really important, this one, tools and
approaches, so one of my [unclear], and that’s, that’s coming actually out of a
conversation I had with one of our top [unclear] guys, the problem that they have in
terms of under, understanding is that normally [unclear]. That’s it, and the whole
organisation was holding a whole bunch of implicit knowledge and they weren’t aware
of it anymore, and the implicit knowledge was so deeply ingrained it was all about the
different application areas and how to deal with them and who are the customers and
what is the type of story they had to tell and all that type of thing. If you now start with
a new theme then this whole tree of implicit knowledge is not there, and the implicit
knowledge enables you to jump from here to here and only talk about this level, and
that’s what they are doing, you know. They were only doing… they were only discussing
the new product innovation in a certain category for a certain application [overtalking].
And they could do it because there was a big set of shared knowledge, of shared
assumption, that would enable them to reduce their conversation on the, the new stuff,
because all the other, other stuff was common knowledge. For a new theme, a big
theme like we were looking at, like atmosphere provider, this implicit knowledge is not
normal [?] for the organisation so you have to build that. You have to build it on all the
different abstraction levels that over time become company corporate knowledge, you
know, but in the beginning phase there is no corporate knowledge; there is nothing, so
you have to make the whole tree explicit, and, and that of course takes a lot of effort,
and if you jump from here to here it just doesn’t work. And that was a really lengthy
discussion I had with Mark Jenson and… which we then made explicit by showing, okay,
if we look, for instance, at the domain of [unclear] in furniture, even this [unclear] into
home office [unclear] out of whatever. Then in the [unclear] so we decided [unclear] in
order to limit the scope, although for total of… cost of ownership of course we would be
everywhere. Then we could go into bathroom or kitchen or living room [unclear] but we
needed to sort that out at that point in time, that we go into this and not into the other
one. Then here we have technique [?] [unclear], you know, and all of that of course is
the explicit, or, or, implicit knowledge for the total cost of ownership because that has
been sorted out over the last 20 years by thousands of people working all over the
globe, but for new themes every of these steps has to be decided, you know. And that
was really [unclear] experience [unclear] at that moment of time. And then we also, all
of a sudden, understood why it is very important to talk about platforms, so… and here
then, on this [unclear] we talk about product platforms, of product [unclear], and then
here they go into a real product, you know. And that’s, that’s actually what they did.
They only wanted to discuss this but this doesn’t make sense if you don’t [overtalking].
And that’s the trick between the product development and the theme development.

12.21 working between the real and the absract, moving up levels to find platforms and
commonalities rather than juts specicif projects
12.21.1 But, again, we’re back to this, this… in this case it’s, it’s making something
explicit so that we are really talking about a common understanding in this space, not an
assumed understanding. But the more we, we go into this the more it seems that there
are some generic themes and techniques which are hugely powerful, because without
that picture and that discussion that that represents, we carry on thinking in the old
ways and making the same old assumptions.

12.21.2 UF Yeah, and, I mean, this is also something that we… that we developed in
order to make explicit why we… what we did, because we were… I mean, this, this was a
really sort of a, a defence mechanism, you know, because people only wanted to talk
this, and we said, but wait a minute, how can you talk about this as long as we don’t
have a clear picture of this?

12.21.3 UM And also, with, with the finances, people look at… zoom in and say, light
[unclear] furniture. Okay, bathrooms. [Unclear] so many bathrooms, so people might
spend a certain [unclear] [overtalking].

12.21.4 IV Yeah, you get a number in a market.

12.21.5 UM Yeah, you’re talking about 30 to 40 billion turnover [unclear]. Why would
you want to do that? So we’re able to use this to say, well, hang on a second, the
platform to be developed here will then scale across the home, across the office, and
then we’re talking. You know, 10 times 30 million is 300… [overtalking].

12.21.6 IV [Unclear] as we’ve just done there. It’s something… it’s a boundary object
again. You can start to talk about it and crawl over it and they can come back and they
can challenge it but that’s fine because at least then the dialogue, or the conversation
[unclear].

12.21.7 UF Yeah, but this, this was really… this was really very important and it took… it
took quite a time, both to us but also to them, to see that this is required in order to
understand the, the value of themed thinking rather than product thinking. And, and
only after they understood this one it could be made clear what it is for, really out of the
box and disruptive [?] innovation, not useful to think on a product level but to
[overtalking].

12.21.8 IV And of course it, it, it connects to what we know, and I know Philips knows
about platforms, but the, the trick is not to get a product but to get a platform on which
many, many products [overtalking].
12.21.9 UF Yeah, but in operational excellence you have… you are… you are doing micro
management at this level, and innovation management, you have to go for this thing,
and that’s also one of the disconnected things. That’s one of the [unclear] between
operation excellence and innovation excellence, how to bridge that gap of… a gap… a
gap of the obstruction level. So one of the key messages, I guess, is getting the
obstruction levels right and really be aware of where you are [overtalking].

12.21.10 IV But, again, it’s a little bit like your position. You have people earlier on,
somebody who’s working five years from market and somebody who’s working one year
from market, they won’t be able to talk to each other because they live in different
worlds, so there has to be some way of bridging or enabling that conversation. It can’t
be assumed to happen, and this is the same thing. People at different levels of
abstraction can’t be assumed to be talking about the same thing, even if the word
atmospheric lighting is in both their, their lips.

12.22 another tool - building cross-functional linkages - see accompanying poweerpoint

12.22.1 UF Yeah. No, it doesn’t work. This is all about interface management. So then
the next one, and that’s one of my favourites. You don’t like it so much [laughs], I know,
but it’s very powerful because it, it tells the whole big story. And here we have, again,
[unclear] technology business, but then we also have these interface regions, you know,
and these two, so the marketing people and the technology people have to negotiate
[unclear] functions. The marketing people and the business people have to negotiate
positioning and distribution, and the business people and the technology people have to
negotiate [unclear], so actually all of them, so here… and these are the in, input areas,
so this is information that you can gather and decisions that you can make in your
function, but these are cross functional negotiations. And if you don’t get the whole
thing right it will fail, so this is… this is, in my view, a very powerful tool to show that
there is… it is either a shared method with shared responsibility or you can just forget it.

12.22.2 IV So was the effect of doing that then that you started to run sort of cross
functional workshops to enable some of those decisions to be taken?

12.22.3 UF I mean, this is what we had done before. I mean, [unclear] was a cross
functional thing, and, and also the team, the project team, became cross functional
when required.

12.22.4 IV Because, I mean, that, that [unclear] technology [unclear] sort of reminds me
of some of the front end of quality functions [unclear]. I mean, it’s what we know we’re
supposed to do [unclear].

12.23 documents as learning capture

12.23.1 UF Okay, and then on the last page we had a set of learnings and observations,
which is also important, so atmosphere provider is an example of new, emerging
innovation themes for [unclear]. [Unclear]… business potential is captured by
innovation themes that are materialised in [unclear] sometimes cross [unclear] product
families [?]. [Unclear]. Then [unclear] provides access to different pockets of money. I
explained that before. And the theme development across [unclear], and the full
business potential of an innovation theme will only be exploited when development
[unclear], and that’s a [unclear] challenge. So additional growth is discovered by
different people bringing in the perspectives [?], so it is really facilitating that dialogue.
Innovation themes can originally… originate from technology business models and
[unclear].

12.23.2 IV What does TCO mean?

12.23.3 UF Total cost of ownership.

12.23.4 IV Total cost of ownership. Okay.

12.23.5 UF And we organise this around this growth, talent and simplicity because that’s
where [unclear].

12.23.6 UM I think with the first point on [unclear], growth, talent, and what was the
next one?

12.23.7 UF Simplicity.

12.23.8 UM Simplicity. [Unclear]. I think that’s very, very important, and trying to make
as much explicit at the start in terms of implicit mental models and views of business
and whatever. It’s very, very important.

12.23.9 IV [Unclear] what you do is you set up counter points and then, by definition,
the current model becomes explicit.

12.23.10 UF Yeah, and I think also if you make… in the beginning you also are not really
aware of the implicit elements of the existing culture because you don’t see what this is
fighting [?] at and you only… you see what is this fighting at and then it really becomes
explicit once you get into conflict, you see. I mean, I think that at the beginning of
[unclear] I would never have been able to invent that metaphor of Procter & Gamble. I
mean, I couldn’t have done it because there was no experience and there was not that
[unclear] to then say, okay, what the hell is going on? And all of us are doing our best
and somehow it… there is so, so much friction, so this is it in a nutshell and of course… I
mean, maybe I can say a little bit more about the foundation books.

12.24 description of FDs and tools - do we have the actual dox???

12.24.1 UF So what is it? It is understand [unclear]. That is this one. It’s a summary of
[unclear] atmosphere study book to understand atmosphere and atmosphere related
needs and a source of inspiration for finding ways to fulfil this need. It’s not [unclear],
so, so it is, you know, what is atmosphere and why do people want it? It’s about
[unclear] in society and society drivers and it is really organised like the, the [unclear] in
the centre and it’s [unclear] in a certain context and… And then derived from that we
have the atmosphere needs applied to lighting, including the market readiness for the
four segments. And then in the [unclear] part we have some examples, that’s on the
backside, that we’ve found in architecture or art and design and they are also linked
back to the different quadrants.

12.24.2 IV Oh, superb.

12.24.3 UF And then you see it here, so the framework described in the atmosphere
needs. It’s the experience [unclear] and the needs [unclear], and here it is. And then
we have… for each of the quadrants we have a description of what it is all about and we
have the market readiness bar [?]. And actually once it goes to a toolbox, I mean, I, I
would really appreciate if you then put… make the reference to me because, I mean,
these are the things that I have invented.

UF And then, see, this is how they [unclear], so this, for instance, is something for
executives. What was it? [Unclear] so that… so that it’s not just text but it is also a little
bit tangible. And this is for attractive impression and intuitive emotions, so that’s really
understand [unclear]. And the next one is talk, so the talking [unclear] atmosphere,
introducing the foundation document for a different language appropriate for [unclear]
atmosphere. And this is… ah, that’s actually sort of the same. The content is the
qualities of life, generic qualities of life [unclear], contextually qualities of life and how
[unclear] affects artificial light forces [?] [unclear]. [Unclear] identity, and this has been
developed together with our light designers. This was really [unclear]. And here, here
you see the [unclear] and the [unclear] domains, so… and, and that also is something
you find also back here, so there is also… we put a lot of effort on creating this, this
consistency in the language to use for other foundation documents. And here you see
[unclear] the brightness, colour and the generic atmosphere and activity domain
[unclear], and then here also we have the best case example and then an example of
how such a dialogue would run in…
12.24.4 UM [Unclear]. And the research guide, the R and D guide, really dived into this
whole area. It’s an area that a lot of the new ideas within research [unclear] was borne
from the work that we did here. Okay, so what are main things? I mean, I remember
this diagram being sketched out [unclear] at the time, so one of the main things we
wanted to emphasise was that if you’re very rich and have got a lot of time and you
want to create a beautiful atmosphere in your home or whatever, you can do it. You’ve
got the money. You pull the Philips staff or whoever you want to pull in and they can do
it, and what we wanted to emphasise… and we, we pulled out the real data points
[unclear] shops in terms [unclear] and all this sort of stuff and then asked the question,
you know, in the future, how can we make this very, very simple so that anyone can
create the atmosphere with special toolbox? And that diagram itself was a… was a…
was a very, very good communication tool. It just goes side by side. People go ah, I
understand what you’re talking about here, and of course it also serves the purpose of
saying to people, you know, the whole thing about creating an atmosphere, it’s not new
but it’s just very difficult [laughs] to do for your average person right now, so…

13 summarising the key steps - 5 minute trigger, mobilise support networks and set up
core team, engage via foundation documents

13.1 But it seems to me that what you have there [unclear] boundary objects. You can
gage people, you can use them, and you might want to extend or modify the
[overtalking], but yeah, yeah. So if I…

13.2 UF And it would be relatively easy because there is a strong foundation already.
That’s the reason why we also call it the foundation document. I mean, there was a very
deliberate choice for that word. Or you could also ground, grounding documents but
that doesn’t sound [overtalking].

13.3 IV Because maybe one of the things we might try and think of is supposing the…

13.4 UF You can also see it like, like in a building, you know. I mean, you could also say,
like, these are the foundation documents, and then on top of that we had, like, you
know, [unclear]. And then we [unclear] fragrance, light, embedded in [unclear], you
know. And [unclear] of course, then, in the end, would be like a business [unclear] or
something like that.

13.5 IV So I guess what I’m sort of groping towards is, if, if there were another company
wanting to change its mind to do something, nothing to do with lighting [unclear] but
something else… I can’t think of one particularly but… [overtalking].

13.6 UF Well, take our… take, take our industry and they really want to go into a
different type of [overtalking].
13.7 IV Then what we’d be saying, out of the [unclear] and out of the sort of the generic
principles [?], is to really change the mind we need the following. We need that five
minute event, that catalyst [unclear] there’s a sense that we have to do something, and
then there’s bits and pieces about mobilising the senior support and engaging that, but
in the toolkit, to actually make it happen, you would have to build a common language
and a common vision, and these documents, structured in this way with different content
[unclear], would be a key part of it?

13.7.1 UF [Overtalking] because it was exactly the… and it was the same for the three,
because in the end it was really sort of like a pregnancy [laughs]. Yeah, it was the same
time. It was really funny.

13.8 UF Yeah, and the trick is… and, and the trick is… and, and this is the way how they
belong together [unclear]. So, so, okay, what we see is what are [unclear] and
technology programmes for that, so then here… and we have also tools [unclear], the do
it yourself lighting solutions, [unclear], so all these tools can also be used in different
settings for workshops, whatever. And then we also said how many people we had
touched, and this was really also amazing for ourselves.

13.9 UM Just one final comment about these is that there’s a huge amount of effort put
into these documents, because I was… I was involved in this one here, and even
designing… putting the table of contents together, we spent… it might have been about
two to three months getting the flow very, very coherent, so here we diverge; here we
converge [unclear], a huge amount of work. And once we had that skeleton then we
could really start putting the content in, but it wasn’t one of these things where, okay,
there’s only like 20 pages of text in here, a few photos; churn it out in two week’s time.
It was literally nine months of work. [Overtalking].

14 the potential of the idea - mass customisation of lihting design in homes, hobbies
(photography) as well as commercial markets loike retailing

14.1 UF And then we… and then we created… and that’s the reason why in this year we
have had the sixth challenge, which has not been discussed before, build and expert
knowledge, you know, and then we found that… I mean, that was building on, on this
example with the paint industry, you know, and then for this book we say, okay, it’s not
only the paint industry but we have the same in digital photography, so it is really
enabling people to become their own photographers because all of a sudden you can
take many shots. It is the baking machine that becomes, you know… you have this… the
baking thing.

14.2 UM The bread baker.

14.3 UF The bread baker.

14.4 UM Everyone’s, everyone’s an expert baker, everyone’s Stephen Spielberg,
everyone’s an expert broadcaster, so it’s, it’s… all the intelligence is embedded into the
system. So what else have we got?

15 impact on thre business - potential and actual

15.1 IV No, that’s interesting. That is, yeah. So do you think that… just to sort of get to
the end of this phase, do you think that 10 years from now, we’re round a table looking
at Philips performance, atmosphere with lighting will actually be a significant part of its
business?

15.2 UF Yes, [overtalking].

15.3 IV I mean, I get that sense and I see that’s not just aspiration. There’s actually very
good reasons why that should get [overtalking].

15.4 UF Well, but, I mean, it’s happening anyway and, and we [unclear], and we always
said that it will happen anyway, independent of Philips, you know. It is more a question,
which part of the cake will Philips be able to capture? And I think that this [unclear] we
were able to open up this opportunity for Philips.

15.5 new divisions set up, new revenue streams, entry into new markets

15.5.1 UF Actually, at this moment of time there are two big things [or themes?] in, in
lighting. The one is sustainability, [unclear], and the other one is light scenes or
whatever. I mean, it’s atmosphere provider but with a different… with a slightly
different name. But I was… I was visiting [unclear] when I also said goodbye to him and I
just… and his door was open and I just dropped in and said, hello, and then he said, oh
[unclear], how are you doing? And I said, ah, I’m very fine, and so on, and I think I said, I
have a great theme of sustainability and I’m really very much really on the atmosphere
provider experience and everything, and he said, you are really on the hot topics all the
time, and I said, why, why would you say that? And he said, well, there are two themes
that we are discussing, currently, in lighting and both of them you are attached to, he
said.