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How innovation can drive business transformation



To be a great leader in any trade, one must also be a diligent learner. The two go hand-in-hand, especially in a connected world where strategies are being redrawn and business models recalibrated in quite disruptive ways.


Which was why, in the Research Centennial year, Philips was eager to host one of the year’s most prestigious forums for Europe’s corporate innovation leaders. October’s European Industrial Research Management Association’s CTO conference brought together visionary innovation executives at the High Tech Campus and in the Philips Museum in Eindhoven.

The event was valuable not just for what was said, but for what was shared. It embodied the true spirit of collaboration, central to the Philips philosophy throughout its century of research and innovation.


The agenda of the meeting could not have been more appropriate for us, as the CTO Forum focused on pivotal changes in company strategy driven by societal transformation and disruptive innovation. All of which are changes that businesses must make in order to stay relevant, or to even survive.


In an environment of perpetual flux, uncertain futures and extraordinary opportunities, corporations are adapting to the digitization of society and to addressing the planet’s most important issues – ageing populations, increased urbanization, strengthening society, and protecting our most precious natural resources.


The solutions and approaches presented – from companies as diverse as computer chip maker Intel and global life sciences and materials sciences firm DSM, next to Philips – provided valuable lessons in how businesses can change to drive new growth. They weren’t simply presentations, but dialogues between leaders whose entrepreneurial urge to learn is greater than ever.


We discussed how research and development strategies have changed to incorporate increased agility in experimenting with smart solutions and approaches. We discussed best practices to improve internal collaborations so that teams no longer work in silos. We spoke of leveraging our depth of knowledge and reputation to exploit new global opportunities. And we debated how digital innovations can be brought to market faster and scaled at speed through the use of big data and analytics.


A recurring theme in all presentations was Open Innovation, which is progressing to a higher level: true ecosystem innovation, often referred to as OI 2.0. Creating solutions for smart cities is a clear example that requires a ‘Quadruple Helix innovation model’ – in which businesses, city municipalities, research institutes and citizens co-create solutions for local issues. A great dinner speech by Rob van Gijzel, the Mayor of Eindhoven, reinforced this vision, and was much appreciated by all present.


So it was appropriate that we showed the Forum’s members some of the key innovation centers at the High Tech Campus, which is a pioneering ecosystem for open innovation and co-creation, where teams pursue problem-focused, rather than just technology-focused innovations.


For instance, LED systems that light the world’s most remote communities, medical devices that allow patients with chronic conditions to lead independent lives, and smartphone-enabled apps that can transform life in urban environments.


Speeding up innovation was also very much a theme of this year’s event – of thought as well as action. But there is an old French saying which loosely translated means: ‘Don’t run so fast – it is better to start early.’ Of course speed and agility, in a complex digital world, has become much more essential to innovation. But it is even more important to anticipate the market’s future direction by widening our perspectives and listening to voices from beyond the confines of our respective businesses. To be aware of how things will be changing, to understand the needs of the consumer and society with foresight and clarity, to create early intellectual property (IP) and product or service concepts - and then to pursue those goals with determination.

As an example, Philips Research and Design anticipated the world of the Internet of Things more than a decade ago in their pioneering work on Ambient Intelligence.

Together, we learned that creating a sizable new business within an existing company requires consistency of purpose, mind set and action. Changing direction too soon or too frequently just leads to waste – an unfortunate result of many approaches to corporate venturing. That is why creating a significant emerging business area within a big company requires having a coherent pipeline of ventures all aimed at one consistent business vision.


One simply has to accept the fact of life that not all ventures tried will be successful. But with a coherent approach, even a failed venture will provide valuable know-how and IP, and the lessons learned will be applicable to the rest of the pipeline.


The kind of agility and willingness to experiment required is absolutely part of the Philips DNA – we have a track record of starting new ventures that often led to great new companies. Now that we have a much more focused strategy, new opportunities present themselves for us. Our chances to succeed will be increased because of our collective passion to create meaningful innovations, and the full commitment of our management to develop winning business strategies in our chosen fields of healthcare, healthy living and lighting solutions.


Philips Research and Philips Innovation Services (both at the Eindhoven High Tech Campus), as well as the entrepreneurial city of Eindhoven, embody everything that our visiting CTOs spoke of – a need to be agile, meaningful, entrepreneurial, collaborative and open to reinvention.


That is why hosting this year’s forum proved so inspirational. It showed that by learning from each other and building partnerships, we can refashion the way business is conducted, and persuade governments at all levels, as well as other key stakeholders, that collaborative innovation can truly transform society.

Henk van Houten

Executive President & General Manager Philips Research

Dutch-born Henk van Houten joined Philips Research in 1985, where he investigated quantum transport phenomena in semiconductor nanostructures – work awarded with the Royal Dutch Shell prize.

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