30 Amazing Years of Innovation and Transformation at Philips

30 years ago (March 1, 1991), I joined Philips as an intern within Medical Systems, a business group which was at that time for sale and now HealthTech is our core business. Herewith I share with you my amazing journey, which will take you across the globe and tells you about moving from analog to digital, from hardware to software & solutions, and finally, end to end transformation. An exciting journey with a great company of which I am extremely proud. In order make this article not too long I have split this into two parts, the first 18 years which talk more about Innovation and the last 12 years which are more about Transformation. 

It all started in Best, The Netherlands, close to the Technical University of Eindhoven where I studied. I graduated by doing research on the importance of the supply chain performance for the customers and how Philips Medical Systems should best organise itself on delivering on the customer needs. Thirty years later this still is an important theme. After my thesis ended I stayed for another 6 months to help implement, the Profit Impact of Market Strategies (PIMS) database, which allowed Philips Medical to benchmark itself with over six thousand other Business Units across the world. Great stuff when you just come out of university.

Than it was time to apply for a real job, which I found within Consumer Electronics. We were at that time market leader for PC Monitors, which were for the majority produced in Taiwan. My job was to organise the planning and distribution for Europe. This we did by creating and maintaining huge Lotus 1-2-3 planning files, which we sent in the evening to our factory in Taiwan with all the questions we had, and received the updated file and answers in the morning. We mapped all the goods in transit in at and from the production plan, on the boat/ truck and within the warehouses, we were able to allocate the goods to the right customers. This was cutting edge at that time, leveraging the internet, with round the clock cooperation.

 After 1.5 years, Philips HR came to me and indicated it was time for me to learn how factories really worked and they offered me the job to be the logistics manager for the Tuner factory in Krefeld Germany. In my 3.5 years there I really learned about factory logistics/procurement, lean operations, factory automation and industrial strategy execution. When I came to Germany, we had 4000 people at the German factory, and when I left only 400 (mostly development/engineering) and production was running in Poland and the Indonesian island of Batam. Again, a great learning experience.

Being responsible, as well for the factory planning for Batam, allowed me to travel there (via Singapore) and I was excited when Philips offered me a job in Singapore to build up a new business of selling audio modules to other OEM companies making audio systems. Here I learned that next to great technology, you also need to have the resources to support the business and most of the units did not have these, except Philips Speaker Systems, a unit which was selling already a lot to OEMs from their factory/headquarters in Malaysia. Hence, I moved over time from Singapore to Penang.

In this period the PC was starting to develop itself as a multimedia/ gaming device and I helped to setup the business of MultiMedia Sound Solutions. We had great speaker technology in Belgium and Malaysia, as well as digital and software capabilities from our digital labs in California and again Belgium. By combining these we landed exciting projects with Microsoft, Apple, HP, Dell and several other PC manufacturers with our speakers, soundcards and digital sound solutions. Really building a new business segment from the ground up.

We really helped to switch over the industry to digital, with one of the high points was for me the launch of Windows 98; we were invited to San Francisco and with Bill Gates launched our first USB digital speakers. This again is one of the Philips innovation stories few people know about; a basis for the Universal Serial Bus (which most of us use on daily basis) was the Philips Digital Speaker System (DSS) link and we have been writing the first USB audio drivers for Windows 98. Also we started to build up a Philips own branded line of multimedia speakers, and rapidly became market leader in several markets.

After five years in Asia, the headquarters of Philips Sound Solutions moved to Vienna, Austria and I moved with it. This was an exciting location since we manufactured there more than 50-70% of the world demand of small loudspeakers for the rapidly growing mobile phone market, delivering to all the major brands at the time. There I got a deep respect for the capabilities of our Austrian engineers who were able to make machines that could churn out more than 10 million, tiny loudspeakers per year with an amazing quality. I used them in a number of smaller products but got more focused on the bigger stuff since I became responsible for the Consumer Sound business as well.

For this job I moved to Belgium, and in this period, we created a lot of great innovations, such as:

·      Flat panel speakers to integrate into the new TV designs which radically changed from massive cabinets to sleek flat objects in which we needed to cram and hide the speakers into new design constraints.

·      Soundbars for the users who wanted a better sound experience for their new flat TV designs, but who did not want to fill the room with a home theatre setup.

Especially in the last category we really stepped up our acoustical and digital innovations to create a room filling audio experience from small objects, being able to project audio sources within the room. By the way, we shared a lot of knowledge with the Automotive sound solution department which also was in Belgium and a leading audio supplier to the Volkswagen group, BMW, Jaguar/Landrover and many others.

Since selling to OEM manufacturers was not part of Philips core strategy anymore, Philips Sound Solutions was sold (now operating still under the name Premium Sound Solutions) and I was happy to return to Asia - Hong Kong this time - to become responsible for the Strategy, Product Management and Marketing within the Philips Audio Video & MultiMedia business. An exciting job in an exciting part of world at that time, with cities like Shenzhen growing rapidly and the South East part of China becoming the destination for much of the manufacturing for our industry.

In my three years in Hong Kong again we created a lot of Innovation:

·      After missing the first step on the MP3 market to Apple and Creative, we came back to become a strong number two in this market. We partnered up with small software companies at the time such as Spotify to make our offering more compelling.

·      Next to for our own products we started with a whole range of docking stations for the rapid growing market of MP3 players.

·      We created again a new business segment with our multiroom audio solutions which allowed you to rip your CDs to a hard disk and stream them to up to 5 rooms within your home.

Especially this last range of products was a marvel of innovation. We made our product internet connected on a digital platform which allowed us to upgrade the software remotely, offer new streaming services and thousands of internet radio stations (we are talking 15 years ago). We won twice in these three years the price for Best Audio Product of the leading Expert Imaging and Sound Association (EISA) awards. In hindsight we probably tried to put too much innovation into these products, e.g. they even could play DVDs, since the surviving products in this category mainly focused only on the streaming part.

After 15 years working abroad for Philips, it was time to return to the Netherlands (also to ensure our children could have high school in one place - a great advice I got from some of my expat colleagues). This also created a pivot into my career towards Business Transformation. More on this in my second part of my journey description.

I hope you enjoyed this part of my 30 year journey, and realise how deep Innovation is ingrained into the DNA of Philips. If you want to connect further on the topic of Strategy, Marketing & Innovation please join the Forum I founded 12 years ago on LinkedIn and which has now > 27.000 members https://www.dhirubhai.net/groups/1899487/