Executive Vice President & Chief Innovation, Marketing and Strategy Officer,
"The ability to meet people’s needs through meaningful innovation is what has fuelled this company’s achievements over more than 120 years and is what we will build on in the future."
In what ways does Philips deliver on its core promise better than competitors?
As you might know, our brand is going through a transition, building on its strengths as well as its heritage, which is anchored in two areas: our technological capability as a company and our local presence. We’re very market centric and always have been. In numerous international markets, people think that our brand is local and we believe that is part of our success. We don’t think there are many brands that can be as locally relevant, yet at the forefront of technological breakthroughs globally, as Philips is today. It is this heritage and strength that we want to nourish and value much more, because we believe this is what differentiates us from competition and provides a foundation for success going forward.
It is my belief that the direction we’ve chosen for the Philips brand in the future is the expression of the company when it is at its best. We are at our best when we demonstrate that we are a technological company that cares about people. We are at our best when we listen to the needs of our customers and consumers. Also, we don’t do things alone. We collaborate with our customers, with consumers, our other stakeholders such as opinion leaders. It’s in our DNA.
This shows when our engineers, for example, work alongside a cardiologist to develop algorithms to ensure that an Allura Xper machine will meet the doctor’s needs. It shows in the way we helped a broadcasting company that needed slow motion filming in HD during the Olympics, which required specific lighting frequency settings in each of the stadiums. It also shows in the way we’ve worked with Indonesian schools to provide low cost meal preparation. The students live very far away and spend 12 hours at school so there is a great need for efficient and reliable food provision. These examples show we care about people and work hard to develop products that meet their exact needs. The ability to meet people’s needs through meaningful innovation is what has fuelled this company’s achievements over more than 120 years and is what we will build on in the future.
Does your closeness with customers enable you to play a more significant role in the societies you operate in as a brand?
When we talk about society, we must remember that what we call “society” is really the result of the actions of many individual people. Therefore, we look to engage with those whom we believe can have an impact on a society. It’s certainly possible to have societal impact, but this happens one relationship, one opportunity at a time—and by understanding your customer, your consumer, your stakeholder and really teaming up with them to help them succeed. We know that when we help people succeed, we’re having an impact on society.
In the technology sector, isn’t there always the risk of getting so focused on engineering that a company begins producing technology for technology’s sake rather than for people’s sake? Would you agree that it is important that people at Philips understand that the customer centricity you mentioned lies at the heart of the brand instead of technology or innovation?
I have a PhD and a postdoc in molecular biology, so I’m a brand leader with a very strong technical background. While scientists and engineers may seem very much in love with technology, I find that when you talk to them, their satisfaction generally lies in knowing that their technology is being used for the right purpose. The best technological innovations are always the ones that are anchored in some observation (in the scientist’s or engineer’s environment), or some belief that this technology can do things for the public.
For example, the inventor of the x-ray, Röntgen, never had a consumer in mind or customer centric innovation process to follow. But he was working with a fundamental need that the doctors had, which was to see inside people’s bodies without having to open them up. In those days, if you opened someone up, there was a high likelihood of infection and death. A less risky alternative was needed to see what was happening inside of people. So, even though the x-ray might not have been invented for that purpose, the need was there and the technology Röntgen invented fulfilled that need. What matters is not whether a company is focused more on consumers or technology while something is in development, but how a company uses or applies that technology once it’s available.
We’ve spoken a bit about your local power. What do you see as your primary challenges for emerging markets and how can the Philips brand compete with local competitors?
I think any global brand that aims to succeed in emerging markets has to start by deeply respecting the brands that are being developed locally. I believe that if you don’t respect them, you have already lost the battle. When you look at the learning curve and transformation that these brands are going through, it’s impressive. Many started by offering low cost Asian versions of Western products but then went on to become leaders in their field. Take the automotive industry—that’s how Toyota started and look at where it is now. Japan’s brands have evolved tremendously in a relatively short period. If you look at where Russia is today and the brand evolutions they have expressed, compared to where they were five years ago, you can see great development there as well. So, I think we have to show tremendous respect towards these brands. We have to treat them as we would treat developed brands and developed competitors.
think we can also learn from them. In China, for example, the marketplace faced the melamine issue. Customers stopped buying baby formula and dairy products because they were afraid for their safety. Joyoung saw the issue and, in response, created a soy milk making device for use at home and built a 500 million dollar business in a few years. In the meantime, you have many other companies, including us, seeing those issues also, but not being able to react as quickly as Joyoung did in response to that very clear consumer need. So, they taught us that they are consumer centric, that they are fast, and that they can create true innovation. That’s something we can respect and also learn from.
Sometimes companies can go through an analysis paralysis,, and we need to break through that—we need to avoid it at all costs. We only need to know what is really important to know. We need to know what will help us make a decision, and then have sufficient feedback mechanisms in place that we can correct quickly if needed.
Do you think a strong understanding internally of what the brand stands for helps get over that paralysis?
If people didn’t have a good idea of how important the Philips brand is and understand how it guides their decision making, we would not have kept the brand where it is today I believe that the Philips brand, together with our people, is the single most important asset that we have. Therefore we need to sharpen the understanding of our brand. I want the brand to be something everyone knows how to apply every day. A sales professional talking to a customer needs to understand how the brand can help her build a sales pitch, as opposed to only the pictures and the price and the after sales service. How do we bring that brand essence, that brand behavior, into the professional’s behavior? Into the engineer’s behavior? I see that as the core challenge in my role as CMO.
If we think of Philips’ wider social role, now and in the future, is there anything you’d like to share about that?
Obviously a brand present in so many countries, and with such a long heritage, has to embrace its social responsibility. I am convinced that the social responsibility the brand has shown over the years has significantly contributed to the success of the company.
We’re currently teaming up to find solutions in the Middle East where breast cancer is endemic. 20% of all cancer deaths in women in Saudi Arabia come from breast cancer and that is related to poor screening, people being afraid of radiation from machines and so on. In response to both the need and the concerns of the people, we developed a low radiation breast cancer screening technology and placed it on trucks, manned by women, who travel around the region allowing women to step out of the house and have a cancer screening. We have partnered with the local government because they want to increase awareness of cancer, and breast cancer in particular.
For us as a brand, it is less about trumpeting what we do and more about actually doing what we think is meaningful. To a degree, we don’t communicate the things that we do. As we see it, we have a role to play socially and we take action in areas where we can make a difference. Not everything has to be a marketing campaign.
Do you think brands need to be more radical to create an ownable space for long-term success? Do you think large global brands can slowly change in positive ways, or do they need to be radical when they want to change?
The nature of the change is a consequence, not a goal.
If the change you want to implement is really meaningful and is truly addressing the unmet needs of your customers, then the consequence is quite likely a radical change. What you’re introducing may be revolutionary, but it might not feel that way at first. Some of the most radical changes have actually happened in stages, over the course of time. For instance, it is known that human beings have a high need for communication—we are gregarious as a species. If you give people a mobile phone so they can talk all the time, guess what happens? We talk. You give us an ability to chat, we chat. You give us an ability to tweet, we tweet. The success of today’s communication enabling technologies are really a result of our human need to connect and be interactive. But was the mobile phone something that happened very quickly? No, the transition was a progressive one.
I don’t think people who end up changing the world necessarily intend to make a radical change. Alexander Fleming probably did not imagine he would change the world with penicillin. He wanted to save the lives of the patients he saw dying. That was his goal. He saved billions, and the change his invention brought was radical but did he start out by thinking “I’m going to make a radical change by inventing penicillin”? Probably not. So, I don’t think it’s helpful to think in terms of what’s radical and what’s not when it comes to setting goals. I think it’s more important to set a goal that’s meaningful, that’s reachable and that addresses a major unmet global need.