Listen to your gut feeling! What we can (not) learn from Jan Timmer

certified TheONE expert badge
5 mins read
Ben also wrote about

In the 1990s, Philips was in trouble. Jan Timmer had to turn the tide and set up operation Centurion. 50,000 of the 300,000 loyal employees lost their jobs, divisions were closed and new initiatives were launched. Some were successful, others were a complete flop like the CDi player that hardly anyone knows anymore. How do you make a company of this size that is completely ruined profitable again and what is involved?

The downfall of Philips

It all started in the late '70s. Philips, which until then had been a leader in electronics, was rapidly overtaken by Asian companies that mainly came from Japan. Philips, for example, invested a fortune in the first video recorder and then passively watched Sony bring a copy of the design onto the market for sometimes half the price. Especially the Chinese and Japanese played the game according to different rules. They waited until there was a new development and brought an alternative to the market without having to pay a lot of research and development costs. The business model as an innovator of Philips was outdated and the management hadn't been paying attention for years until it was actually already too late.

Listen to your gut feeling! What we can (not) learn from Jan Timmer

Jan Timmer relies on his gut feeling

Shortly after his appointment, he gathered all board members and divisional managers from all countries to tell them that Philips would go bankrupt if no radical changes were made. What was remarkable was that he did not immediately tell us what changes should be made, but he did tell them how they should be made. Instead of expensive and long studies and heated discussions about all possible options, he instructed them to listen to their gut feeling. In his experience, they simply did not have the time for discussions and research.

No research but gut feeling

Timmer asked everyone who wanted to discuss and analyse the past to learn from to leave immediately. Even if it was with great reluctance, no one left.

You have to do it yourself according to Timmer

Where - especially at that time - normally an army of consultants is brought in, Timmer made the then board members responsible for the mess and losses within Philips. After all, if you make a mess of it, you have to clean it up yourself. As a result, virtually no external consultant contributed to the reconstruction of the Philips empire.

The company is more important than friendship

One of the harder choices and statements Timmer made was that the company was more important to him than friendship. At the Philips of that time, people sometimes worked there for as many as 40 to 50 years and then, of course, close friendships develop. The same applied to Jan Timmer himself, who had been there for decades when he took office as president. However, he did not let his emotions run wild when he immediately fired many 'friends' whom he found incapable of doing the job. A termination of employment hurts, but dismissing a friend is even more painful, he would later say.

Act to the best of your ability, but act!

Timmer was once asked whether he had ever made mistakes. According to him there is no point in looking back because you can never fully experience and consider the circumstances under which certain choices were made. The only thing that counts for Timmer is that you know for sure that you always act to the best of your ability and that you act in accordance with your conscience. If you don't do anything, you can't make mistakes and by doing things, the wrong choices are sometimes a logical consequence.

Should we listen to the advice of Jan Timmer of Philips?

Jan Timmer's approach and method is highly disputed. The large job losses reduced costs, but turnover also lagged far behind. When he left in 1996 and Cor Boonstra took office, Philips still made a loss. The workforce of 410,000 employees at its peak in 1974 has then fallen to 273,000. When Gerard Kleisterlee took office as director in 2011, Philips was still not profitable.

It was not until 2010 that, 20 years after Jan Timmer's entry into office, the first modest profit was made. The number of employees has since fallen to 119,000. Today, the company has 77,000 employees and makes a healthy profit with a turnover of 18.1 billion euros, but whether this has anything to do with Jan Timmer's approach and insights has been and remains a matter of debate.

Philips isn't what it used to be

Despite the efforts of hundreds of thousands of employees and executives, Philips is nowhere near what it used to be. Started as an incandescent lamp manufacturer and grown into a progressive electronics giant, Philips is now mainly active in the field of high quality medical equipment. Unfortunately, this division, too, is proving to be less profitable than hoped for and 5,000 jobs will again be lost in 2019. Almost every electronics manufacturer from the crisis period in 1990 has surpassed them.

Philips is still known - particularly in the Netherlands itself - as traditional, sluggish and old-fashioned. They have not succeeded in changing the culture in all these years, and even though the turnover remains at a reasonable level due to the exponential increase in the selling price of products, at this rate they employ only 10 people by mid 2025. Probably these are only the current board of directors who, smoking cigars in the boardroom, ignore the advice of Jan Timmer and will look back with melancholy on that 'good old time' at Philips. Luckily they still earn 5 Million Euros a year at the moment, so they won't be very sorry about the wrong choices they make today.

If you want to learn from professionals, then contact strategists and marketing experts from TheONE

Article rating: 4.7 (6 reviews)
Share this article

Related articles

  • Pitch Deck for investors
    Pitch Deck for Investors - There are several theories about what a Pitch Deck must meet for a startup.
    Ben Steenstra
    02-04-2019
    5 mins read
    Pitch Deck for investors
  • Startup tip about innovation
    Startup tip:
    Ben Steenstra
    03-04-2019
    3 mins read
    Startup tip about innovation
  • USP
    USP stands for Unique Selling Proposition (also called Unique Selling Point).
    Rick De Vlieger
    25-03-2019
    2 mins read
  • Fear the fear as an entrepreneur
    In 1994 I was 21 years old, house painter and financially broke.
    Ben Steenstra
    25-03-2019
    6 mins read
    Fear the fear as an entrepreneur
Show more

Instant contact with strategic and marketing experts

Business coaching
online
Ben Steenstra
Ben Steenstra
Free
(30)
I'm the ONE co-founder of TheONE
show profile
Co-founder of TheONE
Amstelveen ,  Netherlands
Languages: German, English, French, Hungarian, Dutch
'TheONE' badge for Ben Steenstra
strategy startups marketing business development missie visie mission vision strategie leadership new business entrepreneurship communication leiderschap team building
Ben will be available in 1 hour
Call anyway
Victor Demmendal
Victor Demmendal
Free
(5)
I'm the ONE I'm the ONE who likes to share my knowledge. Let's hook up so I can help you.
show profile
Co-founder of TheONE
Zuidplas ,  Netherlands
Languages: German, English, Dutch
'TheONE' badge for Victor Demmendal
marketing communication project lead client services customer relationship project management communication events branding incentives project management instore marketing branding personal coaching platform technology
Victor will be available in 1 hour
Call anyway
online
Bart van Hattum
Bart van Hattum
$ 1.68 PM
show profile
Government of Rotterdam ,  Netherlands
Languages: English, Dutch
startups innovation innovatie lean startup idea idee mbti leerdoelen bepalen persoonlijke ontwikkeling hybride werken
Bart is available now
Call anyway
Scarleth Rondón
Scarleth Rondón
$ 0.25 PM
I'm the ONE I am a complete business consultant, I am someliere. I like wines.
show profile
Miami-Dade County ,  United States
Languages: Spanish
development registro de empresas apertura de ctas florida modelos de negocios asesoria de negocios design thinking designing deal structuring personal development personal advice budget financial development investing acciones de usa financial advice
Scarleth is available
but not online right now
Callback request
Barath Pandi
Barath Pandi
$ 0.13 PM
I'm the ONE Doctorate in Mechanical and Energy Engineering specialized in Innovations!!!!
show profile
R & D Engineer
Metropolitan City of Milan ,  Italy
Languages: English, Italian
presentation skills financial planning energy business consultancy automotive milano office 365 c++ coding mechanical works engineering design kids crafts french course indian cuisine
Barath is offline
and available now
Callback request