Cash Crop: Philips's Ambilight TVs were introduced in 2004 and have roughly doubled the company's market share of LCD sales.
Masters of DesignIs all this working? We don't know: Philips won't release results, saying it's too early. The best example the company could provide of the new disciplined approach is its "Wardrobe Care Solution," which it insists is "a new revolution in wardrobe care." Like all new products, this $1,200 iron/steamer had to meet the Simplicity requirements: It had to be "designed around you," "easy to experience," and "advanced." Apparently it met all three, and went from concept to roll-out in two years. Still, that's a lot of iron.
Will Philips emerge as a shining example of an organization that fueled its renaissance with design, or as one that ultimately failed because it lost sight of its real objective? At a time when hundreds of companies are grappling with what it really means to use design as a true differentiator, Philips's gamble is a case study for businesses everywhere.
And there are at least a few encouraging signs. Philips's total sales from products introduced in the last year were 49% of total revenues in 2005, up from just 25% in 2003. In medical systems alone, an industry with long product cycles, some 70% of revenues came from products less than two years old--up 20 percentage points from the previous year. And despite disappointing LCD results in 2006's second quarter, from a less-than-expected World Cup boost, growth in Philips's medical systems and consumer electronics came in better than expected, at 9% and 10%, respectively.
Ragnetti resists being judged on the "basis of the next sensational iPod-like product." But, tired as we may be of hearing about it, it was the iPod that overhauled Apple, turning it from an innovative niche player into a corporate icon. "You have to have your head in the clouds and your feet on the ground," says Marzano. "But the feet and the head have to be connected." We couldn't have said it better.
*Prices derived from Philips's NYSE-traded ADRs
Jennifer Reingold (jreingold@fastcompany.com) is a Fast Company senior writer.
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Recent Comments | 8 Total
August 20, 2009 at 5:12am by Jesica Semon
I tend to see things going this way as well. I'm certain this won't stop at drug use and party behavior (which is actually a ridiculous qualifier as some of the best employees I've seen partied hard on the weekends). What happens when you're denied a job because of some political or religious views you espouse on blog that the HR person doesn't agree with? You know, the kind of information they aren't allowed to ask you in an interview setting. If it can't be asked in an interview they shouldn't be allowed to go looking for that info online. But, I guess you can always make your profiles private so only people you want to see them can.