Natlab – a lost love II
Opening my newspaper on 31 January and seeing the headline “New CEO clips the wings of ‘Natlab’ – once the pride of the Philips group,” struck me at such a deep level that I feel the urge to also share my reflections on it. Marcel Pelgrom’s recent description in Bits&Chips in terms of a stormy platonic love affair is very accurate and befitting. To me, it felt like I was informed of the passing away of a dear old friend. I admit that I already had an earlier bout of sadness when years ago I found out that these days Natlab is the name of a movie theater in Strijp.
Marcel provides a concise and sharp analysis of the famous Philips Natuurkundig Laboratorium’s relationship with its parent company and the strategic decisions of its board. Part of the excitement of working at the Natlab was the enormous breadth of (potential) application areas, covering materials and components, semiconductors, household appliances, consumer electronics, medical devices, electron microscopes and so on, and the ensuing challenge to look for synergies, reuse and common architectures across these fields. In that sense, it was more comparable to GE than to IBM and Siemens, the latter being more dedicated computing services and industrial electronics companies, respectively.
But the economic times were against such broad conglomerates and choices had to be made. Like Marcel, I always wondered what the rationale was behind Philips’ decision to go for consumer electronics and spin off industrial electronics, given that by that time, it didn’t only have to compete with Japan Inc but also with Korea Inc and Taiwan Inc in consumer electronics, a competition that interestingly also often involved collaboration and knowledge transfer, as with Matsushita, Sony, TSMC and LG, for instance. I always felt that that decision was driven by Philips’ (Unilever-inspired) supervisory board, which put its vision into practice by hiring a CEO from the consumer goods world, with no discernible affinity for technology whatsoever.
One wonders what would have happened if Philips had opted for industrial electronics instead: medical imaging and radiation therapy, electron microscopy, X-ray analytics and lithography – becoming somewhat comparable to holdings like Danaher or Thermo Fischer Scientific. But would the technological synergy across these entities have justified a sizable corporate research organization? I doubt it.
That’s all speculation. Philips spun these activities off, and they did well. I had the privilege of working for 14 years at three of those companies, FEI (now Thermo Fischer Scientific), ASML and Elekta, following 14 years at the Natlab. FEI was (and probably still is) the most interesting of these in terms of the breadth of applications and markets to which a (growing) set of core technological capabilities can be applied. ASML is in that sense the complete opposite, being more of a well-focused one-trick pony. The pinnacle of technological prowess, it turned the Brainport region into one of the most influential spots on Earth. Elekta, which took over Philips’ linear accelerator activity in the UK, is at the cutting edge of radiation therapy with its combined (Philips) MRI-linac, allowing a real-time view of the radiation beam’s cancer-burning action. That’s partly based on exploiting synergy from its brachy and brain radiation technologies.
Much of the success of these technology-driven companies harks back to the same principles of people management that made the Natlab such an exceptional place to work. They’re summarized in the Ten Commandments of Casimir, referring to the famous post-war director Hendrik Casimir. Commandments include “do not budget an industrial research laboratory on a project-by-project basis and do not allow commercial departments to have budgetary control over research programs” and “give employees a lot of freedom and accept their idiosyncrasies.” Matthieu Weggeman condensed these ten directives even further into his unsurpassed “Managing professionals? Don’t!”
