Design Intervention

By: Jennifer ReingoldWed Dec 19, 2007 at 8:14 AM

At Philips, a place long known for big ideas and small numbers, can there be too much of a good thing?

Cash Crop: Philips's Ambilight TVs were introduced in 2004 and have roughly doubled the company's market share of LCD sales.

Philips's design-based brainstorming has led to some real product successes in the past, even if they came out differently than originally conceived. One exercise Philips Design put on in 2000, called "Nebula," looked at the experience of going to bed. It came up with a "smart sheet" that sensed what was going on in the bedroom and projected appropriate ceiling lighting. If you were trying to sleep, you might see clouds and stars; if you were in for a night of unbridled passion, the lighting got sportier. Philips never developed its libidinous linens, but the idea of using lighting to help people relax resurfaced in 2003 in the company's MRI and CT scanners, which project imagery on the ceiling to help people, particularly children, feel more at ease during their scans. In the first of six hospitals that have installed them, the need for sedation of nervous children has fallen by 30%. Now Philips is gaining share in both MRI and CT scanners, says Geels--and new uses of lighting are being explored throughout the company.

A similarly upbeat story is the Ambilight television, which originally stemmed from a 1994 design project called "Television at the Crossroads." Research showed that people wanted a more immersive, relaxing experience with their TVs; design reported this to the technical research groups, which developed a way to project the colors on the screen beyond it, creating a more cinematic feel and reducing eye strain. Philips designers then came up with two "wings" on the outside of the set to cast the light and lend it a sculptural element. Ambilight came to market in 2004 and already makes up 50% of Philips's LCD-TV sales, taking its market share in the past two years from 7% to an estimated 12% to 14%.

As part of "Sense and Simplicity," the design group has also been called in to rethink the way consumers experience each product. With the consumer- electronics division, the group created a common set of controls and displays that will eventually hold constant across some 80,000 products--a Herculean task in itself. Now it is working on a common look across all of its divisions. Even Philips's packaging and operating instructions have been harmonized in an effort to present a front unified by design.

Philips's market share for LCD-TVs in 2004, before the introduction of the Ambilight TV: 7% Share now: 12% to 14%

Given that visual and functional continuity are integral to strong brand identity, these initiatives make it easier for Philips's business side to sign on to the new design-driven approach. Still, for data-centric executives, Ragnetti says, "the set of skills required to really use design and innovation as value drivers are completely different from management skills." He can only hope more execs learn to think like Kevin Lewis, vice president of business development for consumer electronics. "Just having design is a minimal requirement to get off the shelf," Lewis says. "Yes, it's expensive, but if you don't spend it, forget it."

To avoid repeating the Vision of the Future problem of too much dreaming and not enough doing, Philips has to position itself at the intersection of innovation and accountability. It must change the design experience from a random collision of great ideas into a strategic, organized approach that both unleashes creativity and somehow tethers it to the real world. It must convince skeptics that "Sense and Simplicity" is more than just a breezy tag line and a series of free cocktail parties. And it must prove that the process actually leads to elegant, exciting, and--above all--successful new products.

With that in mind, Ragnetti established a new vetting process three years ago in which design, marketing, and technology evaluate each new product idea as a team at every stage of development--both to translate the big think for more-analytical types and to anchor that big think in reality.

Philips is also trying to better track the impact of design at the company, an acknowledgment of the Vision of the Future default. Now, design shares its broad-based research at every early meeting to ensure that each proposed product is backed up by a real "validated proposition," in Philips jargon. This means it's based not on a hypothesis about what people might desire but rather on hard research that shows what people actually desire. Since March, the company has been tracking the percentage of R&D funds spent on such propositions; products that are now "mission critical," meaning one to two years from the market, must be tied to research or they will not go forward. And thousands of managers have had to be retrained to understand these new metrics. The theory is that this clear linkage with the customer will lead to speedier product development and fewer products having to be abandoned or rethought in midstream. "The problem was not the number of ideas translated into products," says Ragnetti, "but the fact that we did not really follow up on those concepts."