Change Management Case Study: Philips

Philips Electronics North AmericaPhilips Electronics North America Corporation manufactures and markets consumer electronics, domestic appliances and personal care products, and lighting and medical equipment. With its North American headquarters in Andover, Massachusetts, the company operates as a subsidiary of Koninklijke Philips Electronics NV, based in the Netherlands, in Eindhoven. Like many European-based companies, Philips’ workplace at their North American HQ was years behind their more progressive, open workplace standards in Denmark. Philips, in seeking to implement their Workplace Innovation (WPI) standards in the US, sought Stegmeier Consulting Group to lead their workforce through the transition.

How Stegmeier Consulting Group contributed to Philips Electronics of North America’s workplace success:

Many organizations seeking to implement an alternative workplace strategy (AWS), such as setting up a shared-space environment, intensely focus the vast majority of their efforts on the physical space environment. In working with Stegmeier Consulting Group, Philips took a different approach to their workplace initiative. While the office environment is the most tangible piece of the puzzle, smart facilities and corporate real estate professionals realize it is just one of many components that need to be critically examined for an organization to reap the intended rewards of an AWS.

The Need for Change Management

Often times, we’ve had clients approach us with a beautifully crafted and well-planned workplace design, wondering why employees haven’t embraced their new workplace, why collaboration and productivity are actually down, or why employee turnover has increased. Almost always, the client neglected to engage a workplace change management firm to assess the current state of the organization to unearth and address the top areas of resistance, to conduct pre-occupancy surveys for establishing base-line metrics to delve into what is and isn’t working for employees, and to train employees (and managers on how to supervise their employees) on ways of working in the new environment.

Many times, in an attempt to save money, companies will attempt to go it alone instead of hiring workplace consultants like Stegmeier Consulting Group; while the decision-makers may not realize it, apparent upfront cost savings quickly evaporate.

HR and facilities professionals are taken away from critical job functions and are burdened with tasks they are unprepared to carry out. Out of fear, employees contend that everything is OK, yet true buy-in has not been achieved. Productivity and collaboration are stymied as untrained employees are blindly expected to achieve success in a foreign work environment. Middle management, angry that they were ‘this close’ to a corner office, but now moved to an open environment, engage in ‘silent sabotage’ praising the “great workplace idea” to upper management while undermining the success of the project to their direct reports. Unhappy employees soon look elsewhere, saddling the organization with the cost of recruiting and training expensive replacements.

Very soon, a seemingly thoughtful attempt to save the organization money is proven to be short sighted. While no company would ever ask their real estate or facilities team to swing a hammer and physically build out their new workspace, many organizations are still foolishly expecting an internal team to serve in the role of workplace change management consultants. In reading further, you’ll see how Philips saw value in partnering with SCG.

Though they were a top employer, talent attraction and retention was a real challenge for Philips, especially with Millenials. Recruiters would meet promising candidates at college career fairs, but when they came in for an interview, they’d run the other way after seeing the dated work environment. The organization knew they needed to bring their workplace into the 21st Century, but also recognized the pockets of resistance they’d face from the many Baby Boomers and Traditionalists that were comfortable with their orthodox workplace. Engaging SCG to lead change management efforts ensured that a diverse, multi-generational workforce could more seamlessly transition to the new ways of working required of employees in the WPI environment.

On the project, Stegmeier Consulting Group worked closely with Margulies Perruzzi Architects. As they designed a beautiful, modern workplace for Philips, we helped prepare the workforce for the coming changes: developing a plan and content for communicating to all levels of the organization, leading employee engagement groups to secure workforce buy-in and harness peer excitement, and taking managers and employees through customized training sessions which focused on staying productive and connected in a work environment that featured no assigned seating. As you can see in the video below, it really is all about the people–something Philips kept in mind throughout the entire initiative.