Growth through innovation: Philips’ transformation journey

After more than 120 years in business, Philips continues to innovate to improve people’s lives. With a global workforce of around 120,000 across 3 sectors – healthcare, lighting and consumer lifestyle, it’s a company that is well placed to tackle the challenges of an aging population, urbanization, climate change and shifting consumer demographics and preferences.

dglogo280In 2011, with a new global CEO on board, and facing headwinds from declining economies and weak margins, Philips embarked on a new transformation journey to boost profitable growth by driving innovations that  address important trends in the world, making it more meaningful and relevant to the changing and future needs of its customers and consumers.  A key driver of the transformation has been to change the culture and mindset at Philips, to empower all employees to take greater responsibility and initiative, and to be more entrepreneurial to drive innovation with the customer at the heart of everything they do.  At the same time, the company is taking great strides to reduce complexity and cost of the organisation. The aim is to bring the business and the markets served together.

Harjit Gill is the CEO ASEAN and the Pacific for Philips. Currently based in Singapore, Harjit has been with Philips more than 20 years and has worked in seven countries in various senior sales and marketing positions. Recently I had the pleasure of speaking with Harjit for our Driving Growth series. (Watch the interview here Part One | Part Two). She shared more about Philips’ transformation journey and her lessons learned about leading growth.

Growth leaders everywhere can benefit from Harjit’s story. In this blog, I’ll share my own reflections on driving growth and innovation which were triggered by our conversation.

Place consumer and customer needs at the heart of innovationInnovation must be relevant. Because customer and consumer needs are constantly evolving, innovation can only be relevant if it’s right for tomorrow as well as today and when they are based on very granular customer insights.  True, meaningful innovation requires deep understanding of how the ecosystem within which a product or service is consumed is evolving. For companies working in the healthcare industry, for example, this involves not only the consumer, but doctors and other healthcare professionals, hospitals and other healthcare delivery centres, governments, and related research and policy institutions. The dynamics of these ecosystems vary from market to market. Relevant innovation starts with deep insights in these markets. These are best co-created with multiple functions of the business thinking alongside key stakeholders in the business ecosystem.

Deliver today and build for the futurePerhaps the greatest challenge for growth leaders is to manage the paradox of getting results while at the same time, building for the future.  The starting point is to set clear priorities for each team. Next, the leader must ensure that their leadership team and individuals members of the team have the capabilities to achieve these. This is particularly challenging for growth leaders in regions like ASEAN or Asia Pacific where market growth potential and growth rates can vary so significantly.  Sufficient resources must be in place to execute both. This requires a commitment to invest in people, technology and the brand – investment that is often eliminated with pressures to increase efficiency or reduce costs. MNCs that have over-centralised strategic thinking or growth-focused activities often discover after a few years that they lack these capabilities where they are needed. This limits growth.

On the path to growth, ensure your organisation moves with youGrowth leaders should spend the majority of their time engaging with people – both inside and outside of the organisation – to identify opportunities and bring these to life. This is not the job for someone who wants to spend their day sitting in the corner office or sifting through emails. These interactions aren’t scripted or staged. They involve deep listening, real dialogue, and an openness to new ideas. Creating this sort of dialogue requires a good amount of humility which, at times, can be a challenge for leaders who have been selected in part due to their confidence and ability to influence others with strong analytic and persuasion skills. Harjit spoke of “keeping the customer at the heart of all you do”. By maintaining  this external focus and asking people the right questions, growth leaders encourage the shifts in thinking that innovation and growth require.

Grow people as enthusiastically as you grow your businessDriving growth is all about finding opportunities, creating focus and executing against this. This same discipline is needed to grow leaders fast enough to grow a business. Leaders can kick start this discipline by helping employees think about job moves as opportunities to learn and to become more valuable to the company and to themself. When this is supported by effective talent management processes, great work experience becomes an asset. This creates a new focus for ensuring that employees with capabilities needed to deliver and grow the business get the right experience to accelerate their growth. Too many leaders think of employee development as something that happens once a year and is encapsulated in a personal development plan. Growth leaders ensure great employees are getting the right experiences to trigger their development and they plan to provide the support and resources to execute this properly.

My dialogue with Harjit Gill was both enjoyable and instructive. As she was the first woman on our Driving Growth series, I asked for her advice to women leaders to grow themselves and their business. I believe her advice is terrific for women and men alike:

Drive your own career – be conscious where you want to learn and in what parts of the business chain you want to be involved. Take your destiny in your own hands. Focus on building capabilities you need. Improve the company and be passionate about what you do.

I hope these ideas are useful and encourage you to share your own thoughts on driving growth and innovation below.

  • Author Profile

    Alison Eyring is the CEO of consultancy Organisation Solutions and an adjunct professor at NUS Business School teaching in the MBA programme. She is the founder of the CEO Roundtable for Driving Growth in Emerging Markets.

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