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That, he says, is in response to the different problems the group faces. In the 1990s, when it nearly went bust, it had to retrench and reorganise. It dropped out of computers, sold its music division, leapt disastrously into telephone handsets, and laid off staff. A further 60,000 employees have gone since 2000. Big losses were recorded in 2001 and 2002, and sales have bobbled around the €30 billion mark ever since.

Now, says Kleisterlee, the finances are sound — net income of €2.8 billion in 2004 was the best since 2000 — and the priority is growth. To that end, he wants to reduce the reliance on consumer electronics (still nearly a third of turnover), and push into new areas that promise better growth and margins, and where Philips’s reputation for innovation can pay off.

Hence the idea for a range of medical equipment for domestic use — Philips’s Heartstart home defibrillator, aimed at those with heart conditions and already selling well in America, is just the beginning.

“What we do with consumer electronics is a big part of our lifestyle presence — we still innovate the world — but from there we have a unique opportunity to migrate on the lifestyle side to notions of healthy lifestyle.”

He envisages a future where people at home use Philips equipment to monitor blood pressure or weight gain, providing data online for their physicians, who can then offer weekly advice. It all fits under the company’s latest marketing tagline: “Sense and Simplicity”.

But perceptions, he acknowledges, are hard to shift. “The public see us as a consumer- electronics company and my story to the press is that we are not anymore. We are now a healthcare-lifestyle-technology company, and we also do consumer electronics.”

So how do the employees in consumer electronics feel about having a boss who will now no longer even be photographed with a Philips television or CD player?

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Kleisterlee shrugs again. “That’s a difficult one, of course. A division that for years has perceived itself as the centre around which everything is focused goes through a difficult period emotionally when you tell them that if they don’t get their act together, they won’t be the most valuable bit of Philips. But they are excited that we are increasingly seen as successful and people like working for a successful company.”

His strategy for them is simple: make less, market more. “We choose a few battles and we win those battles. I have told them I want them to be the Dell of consumer electronics and they understand that. They focus on product creation, brand and channel management.”

Beyond that, in the new Philips, he wants no sacred cows, less planning, and more entrepreneurialism. Creating products to fit his healthcare-lifestyle-technology mantra is not the only objective.

“I believe in strategic flexibility. I am not a man of rigidity. If you are rigid, then it just becomes planning again, and we are not a planned economy.”

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