April 29, 2014 Corporate Investments Confidential1
Utilisation & Development of Change
Management as a key
driver in Finan...
April 29, 2014 Corporate Investments Confidential2
22
Finance Transformation
Where are we coming from?
April 29, 2014 Corporate Investments Confidential3
In 2011 Accelerate! was launched - We as One Finance play a
crucial rol...
April 29, 2014 Corporate Investments Confidential4
4
Why are we changing in Finance? The whole organization is undertaking...
April 29, 2014 Corporate Investments Confidential5
5
Transformation: The transformation will allow us to become better, sm...
April 29, 2014 Corporate Investments Confidential6
6
Our new Operating Model built around Five Pillars
Business Partnering...
April 29, 2014 Corporate Investments Confidential7
Philips Business Process Framework
7
Philips Business Process Framework...
April 29, 2014 Corporate Investments Confidential8
8
The APQC framework Process Levels
April 29, 2014 Corporate Investments Confidential9
MEC TS Review Frequency Infosys Fin Ops A&IC BP FP&A
Pre-MEC
Pre MEC re...
April 29, 2014 Corporate Investments Confidential10
Career
Roadmap
We are hereOperating
Model
Along our journey … we have ...
April 29, 2014 Corporate Investments Confidential11
Change Management Practice
What is in for me?... The Finance employee…...
April 29, 2014 Corporate Investments Confidential12
Change Management Practice
Change is an external event
Step A
•Open
Fi...
April 29, 2014 Corporate Investments Confidential13
Change Management Practice
But Transition is Our Inner Process
13
April 29, 2014 Corporate Investments Confidential14
• Change clearly in place.
People working in the
new manner
• More ene...
April 29, 2014 Corporate Investments Confidential15
Our reaction to change…
We all naturally behave as prisoners, tourists...
April 29, 2014 Corporate Investments Confidential16
16
Communicate the 4 P’s
• Purpose
– Why are we doing this? Why did we...
April 29, 2014 Corporate Investments Confidential17
Module 3 (Managing MY Career) and 4 (Leading Change & Transitions) can...
April 29, 2014 Corporate Investments Confidential18
Change Management Practice
What is in for me?... The Finance employee…...
April 29, 2014 Corporate Investments Confidential19
Balance between action & reflection
19
Reflect (on the balcony) – take...
April 29, 2014 Corporate Investments Confidential20
Circle of Concern
Creating focus and impact
Circle of
Influence
From S...
April 29, 2014 Corporate Investments Confidential21
Let’s check our ENERGY levels
E M O T I O N S S P I R I T
▪ I frequent...
April 29, 2014 Corporate Investments Confidential22
22
Develop your strengths and areas of interest
•Your new role and the...
April 29, 2014 Corporate Investments Confidential23
23
Dedicated roles
•The new Finance operating model has clearly define...
April 29, 2014 Corporate Investments Confidential24
24
24
Smart Questions…?
April 29, 2014 Corporate Investments Confidential25
25
April 29, 2014 Corporate Investments Confidential26
April 29, 2014 Corporate Investments Confidential27
27
Business Partnering
Financial Planning &
Analysis
Accounting & Inte...
April 29, 2014 Corporate Investments Confidential28
28
What are the steps to get there?
Group
Sector
CFO A&IC
~90 Sites
To...
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Jan Christiaens, CFO Corporate Investments/New Venture Integration at Royal Philips - Utilisation & Development of Change Management as a key driver in Financial Transformation

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  • Currently our processes and RACI are defined to L5. and will remain there for a while. The reason being that the domains that affect Finance are also part of E2E processes that affect other functions such as sales, procurement, etc. and they are not as advanced with their transformation as we are.
  • We have achieved a lot in 2012We went through serious changes, but always stayed close to the business We took the leadership to drive the transformation and are on track with delivering on our 2012 targetsWe embark to 2013 - the biggest change ahead of usWe know how it works – now it is about making it happenWe make the tough choices in a structured, thoughtful way 1. Objectives: 2. New operatingmodellaunched in March 20123. Career Roadmap: Launch in June; withmorethan 2000 careerplansdevelopedsincethen4. FinOps DV: More than 30 DV havebeencompleted in 20125. Signedprocesses: APQC processframewok on Level 5 (>550 activities) hasbeensigned-off6. Roadmap: PFLT and FECT agreed on ourkey IT andprocessenablersfor 20137. FP&A CoEs: First CoEswent live: PH (Andoverand Eindhoven); CL (alreadyhas a their global CoErunning); LI (EMEA CS andLeanOps)8. Group CoEs: Group functionsalreadyorganized in CoEs, e.g. Treasury (Gary will introduceustodaythe Treasury model)9. ICS simplification: 40% lesscontrols10. VIPP BIC Award: by CL
  • Change is an external event:A new organizationor a personal event such as getting married.
  • Voiceover:Transition is the internal journey to help us come to terms with the change.For the outcome of changes to be realized, people have to go through a transition which is an inner process that happens in 3 stages.
  • Voiceover:Press page down to reveal “New Beginnings” and note that transitions do not begin with a beginning, they begin with endings and press page down to reveal “Endings.” Something has to stop or end before something else can start. In that sense, change represents loss: people have to say goodbye to ways of working, mindsets and behaviors that have worked well for them in the past. In that sense, it is not only important to identify what is ending, but also to celebrate and honour what has been done in the past. Only when people feel that what they have worked on has been seen, heard, recognized, understood and respected can they make room in their minds for changes in their environment and thus in their ways of working, mindsets and behaviors. Ignoring this aspect of endings results in resistance and unconcstructive mindsets and behaviors: "why should I bother if everything I have ever done is being ignored?“Press page down to reveal “Neutral Zone.” Note that Endings are followed by the Neutral Zone which is an in-between state when shifts in identities, ways of working, etc.. can take place.Press page down to reveal “New Beginnings” and note that New Beginnings follow the Neutral Zone. In practice these three overlap one another to some extent. But as in nature, these three phases are part of a natural and necessary process of inner realignment. Give a personal example of a change and the subsequent transition.
  • You can laminate it with previous slide (two sides)
  • Voiceover:Review list, ask “how might you use the 4 P’s?”
  • 5 –15 minVoiceover:An important skill to manage our personal and professional growth and effectiveness is what Harvard professor Ronald Heifetz calls “ being on the balcony and in the dance at the same time.”This skill of reflective action will help us manage the complexity and pace of the day-to-day and at the same time be conscious of the big picture, emerging patterns and the dynamics of broader systems at all levels (i.e., interpersonal, team, organization, etc.). We need to be engaged in the day-to-day action, get the understanding of what is happening and how it is going, but be able to step out and not be absorbed by it, get time to reflect about what we see and take the right decisions for people and the business.If you want to make it interactive, you can ask people to share any experience around it. You may want to give an example linking to the neutral zone, for instance, as that is a time of reorientation and reflection.
  • 5 minVoiceover:Purpose : Remind individuals to put their energy where they can have the biggest impact.Research shows that those who thrive best in uncertain times believe in all three Cs (Challenge, Control and Commitment). Let’s explore control.Explanation:This is from Stephen Covey’s book, 7 Habits of Highly Effective People. Often in situations of change, we focus on our concerns – many of which are beyond our control. We are able to make the most progress when we focus on what we can directly influence. Otherwise we risk getting distracted by the concerns and miss the opportunity to make real improvements and progress. As we focus on actions within our Circle of Influence we increase the size of it.Circle of Concern – all the things that you care or worry about whether you can directly influence them or notCircle of Influence – what you can actually influence or change
  • 20 min totalInstructions:Let people take 5-8 min to do the survey and score themselves (provide hand out and score table)Then individual reflection for another 5-8 min and in pairs debrief for another 5 -8 minPlenary – 5 minAsk: What is your key insight?
  • Transcript of "Jan Christiaens, CFO Corporate Investments/New Venture Integration at Royal Philips - Utilisation & Development of Change Management as a key driver in Financial Transformation"

    1. 1. April 29, 2014 Corporate Investments Confidential1 Utilisation & Development of Change Management as a key driver in Financial Transformation Jan Christiaens CFO Event May 7, 2014
    2. 2. April 29, 2014 Corporate Investments Confidential2 22 Finance Transformation Where are we coming from?
    3. 3. April 29, 2014 Corporate Investments Confidential3 In 2011 Accelerate! was launched - We as One Finance play a crucial role in driving and accelerating value creation for Philips. 3 Resource to Win Customer Centricity Performance Culture Operating Model End2End Our Finance Transformation More insights and less reports Reductions in (re-) views Doing things once in one place Faster, clearer decision making (handshakes) Working at lower costs Clearer job roles and career paths Relentless process standardization Standard, consistent data IntegratedIT landscape What we are aiming for
    4. 4. April 29, 2014 Corporate Investments Confidential4 4 Why are we changing in Finance? The whole organization is undertaking a big transformation to unlock Philips full potential. While Finance is regarded as hard working, resilient and accountable, we are too complex and costly Current State • Our Finance function is widely regarded as hard working, resilient and accountable • Many efforts to improve our function and contribution to the company … • … BUT it is still too hard to get the basics done and we are too costly • Making custom reports for every manager • Way too many reviews and re-reviews across our organizational matrix • Chronic lack of standardization: different ways of working in almost every ORU • An unsustainably complex IT and data landscape • We are paying too big a price – both personally and in terms of the cost of the finance function
    5. 5. April 29, 2014 Corporate Investments Confidential5 5 Transformation: The transformation will allow us to become better, smarter and sharper, so we can increase our efficiency, thereby freeing up resources to reinvest in growth. Non-Finance: We are developing our partnerships with the business to leverage our contribution across the customer value chain. The standardization of processes, tools and ways of working will allow us to deliver financial services faster and better focusing and to focus on areas where finance can truly add value. Pride: We are building a better function that has meaningful impact by driving and accelerating growth for the organization. Talent: The Finance transformation will provide tremendous personal & professional learning and a numerous talent development opportunities The way forward… 5
    6. 6. April 29, 2014 Corporate Investments Confidential6 6 Our new Operating Model built around Five Pillars Business Partnering co-piloting the business … … with FP&A CoEs enabling their decision support … with A&IC driving compliance, data quality and correct financials … with Group Functions providing expert capabilities … with FinOps at the center of finance operations and as interface with external suppliers What is the new Finance Operating model?
    7. 7. April 29, 2014 Corporate Investments Confidential7 Philips Business Process Framework 7 Philips Business Process Framework (level 1) Management and Enabling Processes Operating Processes I2M Idea to Market 1. Ideation & Innovation Planning 2. Value Proposition Creation & Advanced Development 3. Product & Services Development 4. Maintenance and Phase-out M2O Market to Order 5. Market Strategy and Planning 6. Demand Generation 7. Sales 8. Services O2C Order to Cash 10. Plan 11.Source 12. Make 13. Deliver & Install 9. Order Management Version 3.0 19. Human Resources 18. Finance 20. Information Technology 22. Real Estate21. Procurement 15. Vision and Strategy 16. Audit & Regulatory 23. Brand & Communications 17. Philips Excellence
    8. 8. April 29, 2014 Corporate Investments Confidential8 8 The APQC framework Process Levels
    9. 9. April 29, 2014 Corporate Investments Confidential9 MEC TS Review Frequency Infosys Fin Ops A&IC BP FP&A Pre-MEC Pre MEC review meeting (A&IC, BP, FinOps) for Significant ORUs Monthly R R,A R,A C Pre MEC review meeting (BP, FinOps) for Non-Significant ORUs - A&IC participate only on rotational basis Monthly R,A R,C R,A C Provide additional entries and update for adjustments resulting from pre-MEC review for Significant ORUs Monthly I R R,A R,A C Provide additional entries and updae for adjustments resulting from pre-MEC review for Non-Significant ORUs - A&IC to review items above threshold Monthly I R,A C R,A C Processing Journal Monthly R A I I MEC Prepare MEC TS financials and incidental reports for Significant and Non-Significant ORUs Monthly R A Review of MEC TS financials and incidental report for accuracy/ completeness for Significant ORUs Monthly R R,A R,A C Review of MEC TS financials and incidental report for accuracy/ completeness for all Non Significant ORUs Monthly R,A C R,A C Provide input for corrections, adjustments, late entries from MEC TS review Monthly I R,A R,A C Process corrections, adjustments and late entries Monthly R A I I Provide flex file for the review of key statisticals for Significant and Non-Significant ORUs Monthly R A Review key statisticals for Significant ORUs Monthly R R,A R,A C Review key statisticals for Non- Significant ORUs Monthly R,A C R,A C Process corrections and close submission Monthly R A I I File final Pre MEC checklist, MEC TS report and Incidental report Monthly R R/A MEC process detailed RACI 9 Example of the RACI – MEC process – A&IC subset 4
    10. 10. April 29, 2014 Corporate Investments Confidential10 Career Roadmap We are hereOperating Model Along our journey … we have built a lot of proof points that give us momentum to manage our change NOT EXHAUSTIVE Signed Processes RoadmapFinOps DVs 2015: Continuous Improvement 2013-2014: Roll- out, Stabilize and Improve 2012: Plan, Launch and Execute FP&A CoEs Group CoEs ICS Simplification Objectives VIPP BIC Award 2011: Benchmark & Design 10
    11. 11. April 29, 2014 Corporate Investments Confidential11 Change Management Practice What is in for me?... The Finance employee… Acceptance Endings Current State Neutral Zone In-Between State New Beginnings Future State Reflection Focus Network Energy 11
    12. 12. April 29, 2014 Corporate Investments Confidential12 Change Management Practice Change is an external event Step A •Open File Step B •Examine Data Step C •Print Report New process New structure 12
    13. 13. April 29, 2014 Corporate Investments Confidential13 Change Management Practice But Transition is Our Inner Process 13
    14. 14. April 29, 2014 Corporate Investments Confidential14 • Change clearly in place. People working in the new manner • More energy, focus and commitment • People know what they need to do • Fine-tuning still required; possible political battles Brings new energy and new identities • In between the old & new • Everything has to be figured out • Fear, confusion, uncertainty, blame • Can be a time of creativity Helps us move from one identity to another Change Management Practice Transition does not begin with a beginning Endings Current State Neutral Zone In-Between State New Beginnings Future State • Leaving the old situation behind, letting go • Grieving losses, sadness, cynicism, anger • Drop in productivity Clears the way for the changes to come 14
    15. 15. April 29, 2014 Corporate Investments Confidential15 Our reaction to change… We all naturally behave as prisoners, tourists or players when reacting to change The more we become PLAYERS, the better we can navigate change and mobilize our teams The Prisoner The Tourist The Player Key Words: Leadership, Drive, Ownership, Eagerness, Contribute (beyond own role), Bring solutions Key Words: Why? , Leave the fight for others, Stay below the radar screen, Be average, Retreat Key Words: Defensive, Protectionism, Victimized, Co mplain, Blame/ Point fingers What is my choice now…?  I am a Prisoner  I am a Tourist  I am a Player What are the consequences?
    16. 16. April 29, 2014 Corporate Investments Confidential16 16 Communicate the 4 P’s • Purpose – Why are we doing this? Why did we have to leave the old ways behind? – What are we working to accomplish? – People can tolerate the confusion if they have a clear sense of purpose. • Picture – Provide a motivating picture of the future to help keep the team going. – How is it going to work? – What will it feel like? • Plan – What is the path to get to the future you have described? • Part – People need a role to play; where they fit in the plan. 1
    17. 17. April 29, 2014 Corporate Investments Confidential17 Module 3 (Managing MY Career) and 4 (Leading Change & Transitions) can be included or done separately Three types of workshops have been designed to support adoption of change BASIC = Clarifying ADVANCED = Implementing MASTER = Improving SETTING THE CONTEXT • What we did in 2012 • Where we go in 2013 • Finance Transformation plan • Market/Sector plan • Challenges • Priorities • Organization • AOB CLARIFYING THE OM • Explain framework & purpose • Deep dives to review 5 pillar process impact • Clarify interdependencies, disagreements, risks & needs • Elevate topics to central owners/PMO • Define next steps TEAM DYNAMICS / BEHAVIORS: • What is changing & what requires from us • Team behaviors • Team actions - Stop, start, continue • Individual actions – need from you /offer TEAM DYNAMICS/BEHAVIORS: module 5 • Leadership story • Team Aspiration • FROM-TO’s • Team Iceberg • Individual contribution • Team charter & follow up • AOB CLARIFYING ROLES & INTERACTIONS: module 1&2 • Clarify roles & responsibilities in the team • Clarify & validate handshakes • Discuss impact on Non-Finance • Define next steps When available: • Discuss transferred process flows & controls • Clarify what is standard / what not & required adherence SUSTAINING THE MODEL: Module 1 & 2 • Review current processes & controls (what is working / not) • Review compliance with standardization / define follow-up actions • Validate handshakes with Non-Finance and x- pillar per process • Improve & embed best practices/ learnings (pillar, x-pillar, other markets…) EMBEDDING CHANGES: module 6 • Review checklist • Define actions, assign owners & clarify timing for deliverables TEAM DYNAMICS / BEHAVIORS: module 5 • Concerns & opportunities • Team behaviors revisited • Living the values proposition: • where are we from 1-10 • what would take from us to be 10 • Team and individual follow up
    18. 18. April 29, 2014 Corporate Investments Confidential18 Change Management Practice What is in for me?... The Finance employee… Acceptance Endings Current State Neutral Zone In-Between State New Beginnings Future State Reflection Focus Network Energy 18
    19. 19. April 29, 2014 Corporate Investments Confidential19 Balance between action & reflection 19 Reflect (on the balcony) – take distance and reflect on the big picture, emerging patterns, dynamics that move in a certain direction… in order to manage the complexity and pace of the day to day Engage (in the dance) – into day to day conflict and dynamics to understand what is happening and being able to succeed
    20. 20. April 29, 2014 Corporate Investments Confidential20 Circle of Concern Creating focus and impact Circle of Influence From Stephen Covey’s Seven Habits of Highly Effective People I worry, but it is usually outside my control. You still have a choice on your response I worry and I can do something about it. My attitude reflects that 20
    21. 21. April 29, 2014 Corporate Investments Confidential21 Let’s check our ENERGY levels E M O T I O N S S P I R I T ▪ I frequently find myself feeling irritable, impatient, or anxious at work, especially when work is demanding. ▪ I don’t have enough time with my family and loved ones, and when I’m with them, I’m not always really with them. ▪ I have too little time for the activities that I most deeply enjoy. ▪ I don’t stop frequently enough to express my appreciation to others or to savor my accomplishments and blessings. ▪ I don’t spend enough time at work doing what I do best and enjoy most. ▪ There are significant gaps between what I say is most important to me in my life and how I actually allocate my time and energy. ▪ My decisions at work are more often influenced by external demands than by a strong, clear sense of my own purpose. ▪ I don’t invest enough time and energy in making a positive difference to others or to the world. B O D Y M I N D ▪ I don’t regularly get at least seven to eight hours of sleep, and I often wake up feeling tired. ▪ I frequently skip breakfast, or I settle for something that isn’t nutritious. ▪ I don’t work out enough (meaning cardiovascular training at least three times a week and strength training at least once a week). ▪ I don’t take regular breaks during the day to truly renew and recharge, or I often eat lunch at my desk, if I eat it at all. ▪ I have difficulty focusing on one thing at a time, and I am easily distracted during the day, especially by e-mail. ▪ I spend much of my day reacting to immediate crises and demands rather than focusing on activities with longer-term value and high leverage. ▪ I don’t take enough time for reflection, strategizing, and creative thinking. ▪ I work in the evenings or on weekends, and I almost never take an e-mail–free vacation.
    22. 22. April 29, 2014 Corporate Investments Confidential22 22 Develop your strengths and areas of interest •Your new role and the new Finance operating model will allow you to focus and develop your strength areas, where you can add best value. You will be empowered to say ‘no’ to the tasks which you are not accountable/responsible for. Get rid of routine tasks •Standard processes will provide you with a clear and simple ways of working. Transparency and clarity on priorities will empower you make better decisions and to take the next step forward. Working with the best •By working remotely you will have access to people who complement your skills regardless of your location. You will be working with the best team to deliver service and process quality. Grow professionally •The new model will give you access to projects and high caliber of professionals that will allow you to develop a deep set of business and finance skills considered by the industry as best-in-class. Ongoing support to develop your career •You will have the tools and support needed to make well informed decisions as you navigate through your career in Philips Finance. There are clear career paths which you can chose to develop your full potential. What does this mean for me, as a Finance employee? - New opportunities to unlock your full potential
    23. 23. April 29, 2014 Corporate Investments Confidential23 23 Dedicated roles •The new Finance operating model has clearly defined roles and responsibilities, clarifying who can best support you with your various questions / needs. You will get better business insights and decision support as Finance employees will be dedicated to clearly defined areas of expertise and responsibility. Group Centers of Expertise •Local CoE Specialist will help you implement market-specific finance processes and ensure compliance with local legislation. Ownership of process •Finance employees will focus on Finance related tasks, empowering you to take ownership of your own processes. Reliable and consistent data •Finance will focus on standardizing as many processes as possible and making use of consistent data sets so that there is no debate on the figures. Faster response •Our new way of working will be strongly supported by IT tools, which will provide faster access to information and increased reliability of information/reports What does this mean for non-Finance employees? An improved way of working with Finance
    24. 24. April 29, 2014 Corporate Investments Confidential24 24 24 Smart Questions…?
    25. 25. April 29, 2014 Corporate Investments Confidential25 25
    26. 26. April 29, 2014 Corporate Investments Confidential26
    27. 27. April 29, 2014 Corporate Investments Confidential27 27 Business Partnering Financial Planning & Analysis Accounting & Internal Control Shared Business Services - Finance • Provide meaningful decision support based on “services” and analytics from CoEs • Co-piloting with the general manager - supporting and challenging key decisions • Facilitating M&A and post merger integration • Being accountable for finance services supporting management teams • Provide financial information, expertise and insight to business partners and management • Build analytics to deepen insights for decision making • Lead execution of financial planning • Deploy world class financial processes across the business • Own quality, consistency and integrity of A&IC activities and standard reporting across the Group • Deploy and monitor world class and standard controls across the business • Increase quality and ensure soundness and quality of financials • Streamline processes and improve the experience of the internal customers/ businesses • Deliver trustworthy, optimized performance with agility and simplicity • Provide quality O2C, P2P, R2R processes and rule-based controlling (RBC) activities • Drive automation and harmonization Group Functions • Oversee the global Philips portfolio and enable sound financial and operational management • Perform external reporting and ensure global compliance; set global policy and strategy; deploy planning and provide advice • Support value creation, manage cash, financial assets, debt, pensions and associated risks and maintain access to capital markets through investor, bank and ratings agency relations • Identify transaction or partnering opportunities and perform deal execution How will we be organized? The foundation of our future
    28. 28. April 29, 2014 Corporate Investments Confidential28 28 What are the steps to get there? Group Sector CFO A&IC ~90 Sites Today • BP, FP&A and A&IC work fragmented • Expertise functions split across organization • FinOps organized in many clusters and spokes GroupTax Treasury M&A FEN IR NVI & CI Group Tax Treasury CFO A&IC HubsHubsHubs HubsHubsHubs HubsHubsHubs HubsHubsHubs HubsHubsHubs Commercial Industrial Note: SCA = Sector Chief Accountant FinOps • Pool work into distinct “pillars of expertise” • FP&A activities pooled in sector CoEs organized by hubs and spokes • A&IC under the Group organized by sector • FinOps activities pooled by market Sector Business Partnering Sector CFO Office GroupTax Treasury M&A FEN IR NVI & CI FP&A FP&A Commercial Industrial Market Hubs, Market Spokes Hub Hub Hub Hub Hub FinOps SCA GM&S A&IC SCA LI SCA CL SCA PH Group 2012/2013 2014 • FP&A pooled at global and regional level, with spokes in select markets • A&IC further combined in regional CoEs and organized cross-sector with selected market spokes • FinOps pooled in regional hubs and selected market spokes FinOps Hub Hub Hub Hub SCAs Regional CoE Regional CoE Regional CoE Regional CoE Sector CFO Office Group GroupTax Treasury M&A FEN IR NVI & CI FP&A FP&A Commercial Industrial A&IC Sector Business Partnering FP&A

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