CT scan
CT scan

Innovate even in difficult times

Innovating sometimes means standing still, or even taking steps backwards, in order to move forward again. Above all, innovation cannot happen without reorganisation. So says business expert Rick Aalbers, who was appointed Professor of Corporate Restructuring and Innovation earlier this year. “But above all: reorganisation is not the end of innovation.”

Rick Aalbers samen met Mike Schavemaker


In his research, Aalbers highlights the successes and failures of companies, when they intervene in difficult times. In this way, he recognises a stratification in organisations: the time when everything is going well and there is no problem (blue sky), the time when pressure arises and reorganisation takes place (the sky is the limit) and when the water is at the lips. "Companies are then forced to change course. This means, for example, that you have to part with certain parts of your organisation. Portfolio restructuring is called that," Aalbers explains. From an academic point of view, he likes watching companies, such as Philips.

Indeed, that is where Aalbers has been working with Mike Schavemaker, Managing Consultant at Philips, for many years. Schavemaker has now worked at the Dutch electronics group for thirteen years, where innovation is inextricably linked to the company mission: 'To improve people's lives with innovations'. "Ultimately, for me it's about the stories behind the products," says Schavemaker. "Innovation is an interesting thing. They are puzzles, with a drive behind them to solve them. Much of my work is done in teams together with the Philips internal customer, where the strategic ambition is often largely already determined, but where my team can make the difference in the execution and co-creation of transformation and/or innovation together with the relevant stakeholders. Intuition and experience plays a key role in setting the course and achieving sustainable change and success. But it is nice to have a researcher involved to challenge you."

Every change implemented in an organisation has an impact. Being able to better predict those outcomes offers opportunities.

Mike Schavemaker


In the leading and European Union-funded Horizon 2022 FINDER project, for example, where Schavemaker, as advisory board member, is taking on a role. This project, initiated by Aalbers, investigates innovation at companies, in a digital landscape, together with students. Financial technology, for example, which has absolute impact on all layers within a company. Considering various perspectives is important within FINDER in order to come up with innovative solutions to problems. That innovation is not a linear process, both Schavemaker and Aalbers know from their own fields. Every change implemented in an organisation has an impact. Being able to better predict those outcomes offers opportunities.

The latest products supplied by Philips, for example; how will they remain affordable for hospitals? Continuing to repurchase equipment is unaffordable. "Then business models are looked at," Schavemaker explains. "From buying a new product to, say, 'pay per use', where people only pay for its use. Then you move more towards value-based health (also known as Value-based Care / VBC). This implies understanding all these business models well and being able to weigh all factors in them. In the healthcare context, this also involves knowledge of the rules of the game (so-called Health Economics) and understanding, among other things, so-called Market Access & Reimbursement developments, in other words: the existence of codes that often differ per country for the actual (dis)payment of care, usually between the patient, health insurer and government. Financial technology is addressing such issues: for example, by making services securely, flexibly and traceably accessible through a simple payment so that everyone benefits. What was previously unthinkable, or dormant in bureaucracy is now made a lot easier by financial technology and is now taken for granted. To me, that is the biggest innovation of the last 30 years. The developments within Fintech do not stop here, but with the advent and use a.o. of blockchain, NFTs, the potential for personalised and regulated care in the future is increasing."

Rick Aalbers


Indeed, that is what innovation is all about: adapt, or fade into oblivion. Because such reorganisations can indeed inhibit innovativeness. "When the water is on your lips, it is good to take some steps back," Aalbers explains. "At the same time, for a company slowly slipping towards economic misery, innovation is often a necessity to survive. The company must find new ways to generate revenue, cut costs or differentiate itself from the competition to improve its financial situation. In contrast, in a financially sound company, innovation can come from opportunities to enter new markets, grow and progress without acute financial pressure. When the water is on the entrepreneur's lips, that calm is often not there."

If you really do have to take those steps back, to move forward again, how do you recalibrate? Aalbers: "By entering into new partnerships, or offering other services, even if there is firm pressure on the organisation's short-term objective. That makes for a healthier company. Although, unfortunately, this is not always the case when a company intervenes too late. But overall, the intention of innovation is always progress." 

It remains important for innovation to consider the impact on staff during a reorganisation.

Reorganisation as catalyst for innovation 

Often a reorganisation has far-reaching consequences for employees. This causes management to have to rekindle the spark after the organisation. That can be quite a task. In that context, Aalbers and Schavemaker previously looked at the different team structures that an organisation like Philips has, to fuel that innovation internally. "In particular, the power of self-choice in forming new creative teams led to the most creative and realistic new ideas," Aalbers says. Those insights helped Philips to improve the selection process of new business ideas. Schavemaker: "That is relevant knowledge in order to achieve innovation even in times of reorganisation."

It remains important for innovation to consider the impact on staff during a reorganisation. A reorganisation that is more social leads to better results than organisations that focus purely on cost reduction and reorganisation, argues Aalbers. "If a company wants to maintain an innovative character, it's not just about the size of the reorganisation but, above all, about how remaining employees are dealt with, the treatment of dismissed staff and how concerns about job security are handled."

Yet it can be concluded that innovation is indeed possible despite reorganisation. Precisely because organisations undergo reorganisations, it becomes clear that adapting to the changing market or internal challenges is necessary. Aalbers: "This can lead to a sense of urgency and openness to new ideas that were previously unthinkable. In this way, a reorganisation even becomes a catalyst for innovation."

Photos: Duncan de Fey

Contact information

Organizational unit
Business Administration
Innovation, Management