Royal Philips: Designing Toward Profound Change

This case explores Royal Philips CEO Frans van Houten's bold use of design research to inform a critical strategic decision: Should Philips leave its storied lighting business behind in favor of complete focus on health technology and consumer lifestyle products? Philips sent teams of designers, engineers, and consultants into hospitals and clinics to interview patients and a range of providers, from clinicians to administrators and other staff. These teams generated a range of insights about how Philips products were experienced in the field that provoked many important questions. Could Philips improve its offerings by conceptualizing patient journeys through a health continuum? Could it forge new relationships with customers to create more value over time? What organizational changes would be required to support customer-facing innovations that drew on components from different Philips business units? Students discuss the merits of using this qualitative, design-based research to inform strategy in the face of traditional financial analyses that suggest no clear strategic choice.