Philips 2009 Annual Report Download - page 8

At Healthcare, we strengthened our position in image-
guided intervention with the acquisition of Traxtal. At
Consumer Lifestyle, we extended our leadership in the
market for coffee appliances into the high-growth high-
margin espresso machine segment with the acquisition of
Italian manufacturer Saeco. And at Lighting, we further
reinforced our position across the solid-state lighting
value chain, for instance through the acquisition of lighting
controls companies Dynalite and Teletrol.
Accelerate change
Organize around customers and markets, thereby
improving Net Promoter Score
In today’s highly competitive business environment,
customer intimacy and flexibility are essential, and we are
continually adapting our organization to the changing
needs of the marketplace – in both mature and emerging
economies. In 2009 this translated to a 9% improvement
in our Net Promoter Score to 60% (co-)leadership, up
from 51% last year.
Net Promoter Score
% of businesses with (co-)leadership
scores
75
50
25
0
50
2007
51
2008
60
2009
Increase Employee Engagement to high-performance level
and implement ‘Leading to Win’
Compared to 2008, our Employee Engagement Index fell
one point to 68, two points short of our high-
performance target of 70. Though disappointed by this
slight decline, it is encouraging to see that our engagement
levels remain high despite such difficult times, and have
indeed improved in several of our businesses. In fact, the
participation rate increased to 91%.
The Employee Engagement survey is a key element of
‘Leading to Win’, the new way our people are evaluated
and rewarded at year-end, which we drove deeper into
the organization in 2009. Employees are no longer
assessed solely on what they achieve (results), but also on
how they achieve it (behavior). ‘Leading to Win’ is
designed to develop a strong customer and performance-
oriented culture that encourages employees to strive for
results, not just in their own area, but for Philips as a
whole.
Accelerate sector transformation programs
In view of macro-economic developments, we
accelerated planned initiatives to increase organizational
effectiveness, lower our fixed and discretionary cost base
and simplify our structure. Within Healthcare we focused
on de-layering our management structure to increase our
speed of execution and lower operating costs. We
effected further changes in Consumer Lifestyle in our
drive for strong market-focused execution. And within
Lighting we organized our sales force along channels and
applications while continuing to reduce our fixed cost
base through various restructuring projects.
Implement strategy
Further build the brand in the Health and Well-being
space
We continue to invest heavily in our key differentiators –
our brand and our end-user-driven innovation and design.
In 2009 we again improved our position in the annual
Interbrand ranking of the top-100 global brands, rising to
42nd place. This clearly demonstrates we are translating
our brand promise of “sense and simplicity” into a positive
customer experience designed around their needs.
Philips brand value1)
in billions of USD
10
8
6
4
2
0
5.9
2005
6.7
2006
7.7
2007
8.3
2008
8.1
2009
1) According to Interbrand
Continue to re-allocate resources to growth
opportunities and emerging markets, including selective
mergers and acquisitions
Despite the recession, we sustained our investment in
growth in 2009. One of our key endeavors was to step up
our resource investment in emerging markets so that we
are even better placed to meet the needs of local people –
and to develop solutions for these countries that can also
transfer to more mature markets throughout the rest of
the world.
President’s message
8 Philips Annual Report 2009