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Why Philips Needs a CXO
A large part of my career was spent at Philips and as a Dutchman. I was, and still am, proud of this Global Dutch company. At one point it was the last large consumer electronics giant still standing outside of Asia. Great new innovations such as the compact cassette (enabling Sony’s Walkman) and the compact disc are just two examples of technologies that disrupted the markets.
However, a lot of Philips’ products used to be based on the principle of “If our scientists think it’s cool then our consumers are going to love it! “; or, in other words, technology push. To change this, Philips radically moved away from technology driven roadmaps where the next product is a better version of the previous one to a customer and user insight driven roadmap.
An insight driven product roadmap is based on validated needs that are often articulated without a specific product in mind. This is based on the principle that user and customer needs do not really change but only the solutions that meet them. Given the fast pace of innovation, different technologies can meet the same needs at different points in time.
One big consequence of this approach is that even a technology powerhouse such as Philips could no longer rely on developing all the necessary technologies in-house; instead, it has to monitor, scout and source the technologies it needs from 3rd parties (Open Innovation).
Currently, years after it wholeheartedly embraced open innovation and an insight driven roadmap, Philips introduced various products such as the Hue lights (possibly the most expensive light bulb money can buy) and others that are not technology marvels but do offer a consumer/user centric experience. In that sense Philips has become a bit like Apple; not the first to use a certain technology but one of the first to apply it in a way that meets a user’s need.
But Philips is not Apple. A quick look at the number of people that work for either company and the current market capitalisation confirms this. So what’s the difference? Quite simple, a customer and user experience is a journey with multiple touch points.
A company’s products are only one part of this journey but it is the way in which Apple offers additional services (itunes, app store, storage) in combination with a consistent and integrated experience across its devices that defines the customer/user experience. Apple offers the parts and the ‘sum of those parts’. Philips offers just a part.
For Philips to become an ‘Apple’, it needs to abandon the ‘part thinking’ and use its treasure chest of validated insights to design the overall experience over multiple products and add services where needed to glue these together. And that is not an easy step especially because it challenges the internal product silos and forces cohesive experience thinking across the whole organization.
For Philips to embrace “Experience Thinking”, a leadership role at the top is needed; Philips’ own Steve Jobs or, realistically, a Chief eXperience Officer with a mandate to change the organization structure. Can they do it? I think they can looking at the way they decisively embraced open innovation and insight driven product thinking. But what about the shareholders I hear some say? What about Apple’s shareholders? is my counter argument. I guess they are pretty happy at the moment and, as a Philips shareholder, so will I be if they decide to go this way and, as a Dutchman, I’d be proud if they pulled it off.
Oh yes, in case you are wondering, this is not my job application to become the first Philips CXO 🙂
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Interesting blog Leo, (as another ex-Philips guy)
I’m not convinced that user-driven insights are necessarily better than technology-driven insights (to pick winning innovation projects). There may be a case for both (disruptive or continuous innovation) or a combination/hybrid (like lean start-up thinking).
Interesting point on the CXO. I wonder how Apple will manage post Steve Jobs. Or was Steve just a modern CXO/CTO phenomena. There are people who can be CTOs and people who can be CXOs… but tough to find a guy (or gal) who can do both?