Philips: 125 years of learning

Last week, Philips marked its 125 year anniversary. While that’s a milestone for any company, it’s a terrific achievement for a technology leader.

An event like this gives an opportunity to reflect on our company’s impact. Among many, we’ve brought light to the world; unlocked the magic of electronics in homes, businesses and industries globally – and we continue to make major advances in healthcare.

Equally, our anniversary gives us a chance to reflect on lessons we’ve learned. Here are four that are top of mind:

1. Drive purpose: At its core, Philips is an innovation company. While Philips has prospered by continually re-inventing itself, our purpose remains unchanged: innovating in a meaningful way, with the mission to improve three billion lives a year by 2025.

This purpose, alongside the company’s role as a socially responsible company, binds our employees, shareholders and customers.

We’ve made clear choices about how to grow by sustaining value and relevance, because innovation only pays off when you target unmet needs. All businesses need to constantly shift attention to new opportunities.

For Philips, this meant looking at the world’s ‘mega trends’ and challenges. With fast growing populations; the inexorable rise of chronic conditions and creaking health systems globally, we saw a tremendously exciting opportunity to contribute to solving the world’s health challenges; applying meaningful innovation to provide improved care at lower cost.

This month we announced our intention to float our Lighting business on the Euronext stock-exchange, enabling this world-leading business to thrive as a standalone leader in digital and connected light.

At the same time, our core business, operating as Royal Philips, focuses on growing opportunities in the health technology industry. In this way, both businesses enjoy the focus, agility and access to resources necessary to achieve growth and global leadership in their respective industries.

Philips has practiced rigorous portfolio management over many decades, divesting slow growing or capital intensive businesses to focus on growth by bringing value to customers.

Our heritage and experience are wonderful assets, but we keep a forward-thinking mentality: our past is merely our prelude!

2. Commit to R&D – while engaging in open innovation: We continue to invest around €2 billion in R&D each year. As a consequence, Philips is the world's largest patent applicant at the European Patent Office, having generated more than 100,000 patents to date.

Today’s investments include vital emerging areas like LED and connected lighting technology, HealthTech informatics, wearables, handheld diagnostics and digital pathology – and much else besides.

We work rigorously to spot trends and to invent and develop proofs of concept. This kind of investment helps us deliver enormous value to our customers and to avoid commoditization by creating valuable intellectual property.

With innovation centers in Eindhoven, Hamburg, Bangalore, Shanghai and Cambridge Massachusetts, Philips has a global presence and has pioneered open innovation; accommodating hundreds of third-party companies and research organizations across the innovation chain.

Owing to the emergence of ever-more complex systems and the vital need for speed-to-market, no one can afford to innovate in isolation. Since taking down the barriers and opening our High Tech Campus in Eindhoven to other companies in 2003, we’ve been at the forefront of creating innovative partnerships: that pays off with the wide range of products and services we offer today.

3. Stay close to customers; co-create and take a solutions approach: When it comes to larger clients, we can evolve deep relationships into fully-forged long term partnerships.

Increasingly, many customers – whether they desire an energy efficient city street lighting system, or a complex health care delivery system serving many care-givers in a hospital – no longer wish to buy piece-part technologies and stitch them together themselves. Instead, they seek solutions and new business models to achieve breakthrough performance.

In our healthcare business, co-creation is a Philips concept where we bring together all stakeholders, including customers and end-users, to tackle specific needs. The technology involved usually includes hardware, software and a wide range of services – and needs to work seamlessly.

Data must be compatible, integrated and secure and this capability is designed-in at the outset. This allows insights to be unlocked beyond narrow processes and applications, driving meaningful clinical insights that improve patient care – outcome-based care – across the full health spectrum. 

4. Serve society: Alongside our mission to improve lives, we are committed to sustainability in how we do business. By generating more than half our revenues via ‘green’ products, and committing to be a carbon-neutral company by 2020, we endeavor to lead from the front.

Our relationship with the Red Cross goes beyond 100 years to 1914 when the Philips family worked with the Netherlands Red Cross to provide shelter and food for thousands of Belgian refugees in the First World War.

More recently, we take pride in the Philips Foundation – which works in partnership with the UN and UNICEF – to address the needs of people, especially women and children, in the world’s more fragile environments. Philips Community Life Centers, meanwhile, address the needs of over 150,000 new or revitalized primary healthcare centers across Africa.

Looking forward

We endeavor to be a learning organization, applying common operating principles and practices to deliver excellence – because it’s the only way we can drive customer value from our deep heritage and enormous scale and resources.

Philips employs more than 100,000 talented people globally and, when we look back, it’s important for us all to draw proud inspiration from all that has been achieved to date.

Here’s to the next 125 years!