The lighting industry and the cycle of change

November 19th, 2014, Published in Articles: Vector


Henk Rotman

Henk Rotman

I recently spoke to a colleague about a senior management course he had attended and I asked him what he had learnt. One of the things he took away with him and which resonated with me was the “four rooms of change” theory, developed by the author, Claes Janssen.

This theory is essentially about the different phases organisations or industries in states of transition go through. It describes an ongoing cycle where employees move between different states of mind, emotions and behaviour, referred to as “rooms”. The road leads through a state of contentment to a state of shock or denial, to confusion and, finally, renewal. This phase of renewal is where any business or industry wants to be.

This theory, I believe, has moving parallels with what is happening in the lighting industry. The “room of contentment” is a perfect description for the lighting world before the advent of LEDs – a stable, traditional and conservative business with rarely any dramatic changes in the value chain or in the products. In those days, lighting professionals and companies alike were in their comfort zone, with not much to stress them.

At some point, an external trigger occurs and threatens the existence of the old order, opening the “room of denial”. In this case, the trigger was the coming of age of LED technology for general lighting.

Many lighting manufacturers and even CEOs of the Top 20 European luminaire manufacturers were outspoken in their disbelief and scepticism, and assumed a wait-and-see attitude. Most people believed that this new, “disruptive” technology was not happening and would just go away.

Most companies in the LED market transformation process are currently in the third room, the “room of confusion”. They have passed the denial stage and have generally accepted that the new technology is here to stay. But how to embrace it and incorporate it into products or create value with it?

A new technology, new light source formats, ever-changing specifications, new players, all coupled with a speed completely alien to the lighting industry. How to handle the fear of the unknown, the bewilderment at the irrelevance of so much of one’s previous product knowledge and the on-going need to update one’s expertise radically?

It is not easy to come to terms with all of this. We have all struggled and have had our fingers burnt at some stage.

However, a small but growing community has entered the “room of renewal”, the final stage of the cycle. They are steaming ahead, increasing penetration of their LED portfolios, which already typically make up over 25% of their turnover.

They have learnt how to manage their conventional luminaire portfolios along with their LED luminaire business. They have adapted their development and manufacturing processes while streamlining their logistics processes and have invested in people with the right technical and commercial profiles. Above all, they have made choices and have a vision and strategy which they are executing.

These companies appear energised, inspired, enthusiastic and confident in their market approach. We can all learn from these companies and their journeys. This is ultimately the position where everyone wants to be and remain in for as long as possible. When this happens we, in the lighting industry, will have come full circle as so many other industries facing disruptive technologies before us have done.

LED market transformation – it’s all textbook stuff, really!

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