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What Philips have learned about innovation?

100 years of Philips Research: Five founding principles that still ring true today.

09 Sep 2014


These days, it's almost impossible to go one hour in a boardroom without the word "innovation"being mentioned at least once. But have you ever wondered how companies approached the concept 100 years ago? Did they know about the importance of multi-disciplinary teams, co-creation, balancing scientific curiosity and market focus, hiring and developing the right talent, and risk taking, in the spirit of "learn fast, fail cheap"?

To find out, we went back to 1914 to uncover some of the founding principles of Philips Research. This year marks the centenary of the institution that Frans van Houten, CEO of Royal Philips calls "the lifeblood of the company." Back then, its co-founder and first director, Dr. Gilles Holst, put together what he called the Ten Commandments for Industrial Research - tenets he hoped would help encourage his teams of scientists and engineers to push the boundaries of technical possibility in order to create the breakthrough innovations that make all the difference.

Perhaps surprisingly, many of the principles still ring true today. Here, we have a closer look at five of the most powerful ones  illustrated with some of the resulting landmark Philips innovations.

1: Lead the company into the future

An obvious one to start with, but perhaps not as obvious as it may initially seem. Holst was a renowned physicist in charge of an industrial research organization. He could have chosen to emphasize fundamental technology research alone. Instead, he urged his teams to be "guided by market possibilities" while also being inspired l by the latest state of science and technology. He gave his researchers independence in choice of subjects, while making sure that leaders and staff were thoroughly aware of their responsibility for the future of the company.

This is precisely what led to such a thrilling mix of scientific breakthroughs and commercially successful products. For example, Philips Research's explorations into vacuum electronics for lamps led amongst others to the invention of the new type of radio tube (so called penthode) and the TV camera tube (so called plumbicon). Similarly, it’s strong focus on electromagnetism and mechatronics paved the way for the electric shaver in the late 1930s and the invention of the compact cassette in the early 1960s, one of the company's most successful products, as well as applications in the first computers and video recorders.

Meanwhile, work on solid state electronics and integrated circuits heralded the revolutionary leap from the analog to the digital world. More recently, this know how was applied to Healthcare, creating the world’s first digital PET scanner and energy-resolved CT scanners launched at the 2013 radiology tradeshow in Chicago (RSNA).

Building upon its unique strengths in lighting, Philips has over the years brought complete new lighting technologies and products to the world, such as halogen, compact fluorescent, xenon, beamer light and energy-efficient LEDs. Recently, it launched a device that  treats lower back or neck pain using blue light.

2: Nurture talent and entrepreneurial behavior

Holst hired the best scientific talent, without paying too much attention to their previous experience, with the intention to transfer them later to the development organizations in the product divisions. Also today, lifelong learning ability, having a broad range of interests, and the talent to make unexpected connections is still a guiding principle in hiring.  Philips Research head, Henk van Houten asks his researchers to explore solutions to the big social and economic challenges we're all facing, such as aging populations, the energy question and the soaring cost of health care – whatever the technical solution might be.

But he also acknowledges that their day-to-day inspiration and passion to work hard comes from solving very specific problems that mean something personal to them. "In all our research projects – however technical the solution is – it's ultimately about people, and what makes them tick.  That's the secret of innovation that really matters."
At Philips Research, the enthusiasm of individuals has resulted in some unexpectedly creative solutions.  The Sonicare Airfloss originated out of a “Friday afternoon” experiment. Thanks to the entrepreneurial behavior and persistence of the scientist, a breakthrough product was created that provides an effective and easy to use alternative to dental flossing.

3: Partner up...

Even back in 1914, Holst knew that the lab needed to stay abreast of new technical developments, coming from outside.  So, at the time, he encouraged his teams to "take part in international scientific activities." Philips has been one of the pioneers of open innovation, realizing that in our fast-paced economy, innovation behind closed doors slows things down.
In the late 1970s, one particularly fruitful partnership with Sony and the music industry led to the creation of the compact disc, which paved the way for other optical storage formats like the DVD and Blu-ray disc. Today, Philips Research is working with a broad range of partners all over the world, ranging from other companies, hospitals, universities and governments to everyday consumers.

4: ...and don't forget your colleagues

Perhaps the one commandment that has survived over the years in its purest form is "create multi-disciplinary teams." All too often, researchers in large companies can end up working in silos, focusing on one specific business for years. But adaptive and diversified multinationals like Philips know how to tap into their rich and diverse pools of talent. By creating project teams that mix researchers with designers, market specialists, external experts and  end-users, the company helps to ensure its innovations are meaningful and have business impact.

Technologies and insights developed for one business can also be used in another, which can lead to unexpected and exciting new solutions. Philips has many of these examples. For instance, when Philips' applied its in-depth understanding of the emotional power of lighting to hospitals, the Ambient Experience business was born. Similarly, the AmbiLight TV (light atmosphere added to TV) is a great success. In healthcare, Philips researchers took the optical expertise acquired in developing the CD and DVD and used it to create the Photonic Needle, a yet to come to market innovation that has the potential to help surgeons improve biopsies by allowing them to detect cancerous tissue inside the body.

5: If in doubt, prefer anarchy

A controversial message to end on, undoubtedly. Holst's original rule in full was: "Steer a middle course between individualism and strict regimentation; base authority on real competence; in case of doubt prefer anarchy." Now, while this may sound like a car crash way to do business in many circumstances, in others it can lead to ground-breaking innovations.

Take Hue, the personal wireless lighting system launched in 2012 that created more buzz around Philips than almost any other new device that year. Hue only came about because someone took a gamble on a small team inspired by a far-fetched idea for a new digital lighting system. The team – including both marketers and researchers – was given the space and budget to run with that vision, unfettered by formal organizational structures. Once the system was ready, they launched it with almost no ad campaign, and opened the software up to the public.

The gamble paid off in spades. Hue was first of its kind to market, smashed its initial sales targets, was voted best product of 2012 by Forbes, and has scads of weird and wonderful apps made for it by enthusiastic programming fans. It’s fair to say that Hue put Philips firmly in the global spotlight for digital innovation in lighting.

To some extent, you cannot write the rules for how to breathe life into delicate ideas. And while some of Holst's words have undoubtedly dated, many of his sentiments are still echoed by Philips Research head Henk van Houten today, when he urges his scientists to find "the passion to create something that does not yet exist and to leave something that really matters."


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