Thinking Simple At Philips

A panel of outside experts is helping the electronics giant reinvent itself

Two years ago, British fashion designer Sara Berman got an unexpected call from Andrea Ragnetti, the chief marketing officer for Royal Philips Electronics (PHG ). Figuring the Dutch company wanted her to design some sort of wearable technology, she was prepared to politely decline the proposal. Instead, she spent an hour engaged in a freewheeling discussion on the meaning of simplicity, and by the end of the chat she had accepted Ragnetti's invitation to join Philips' Simplicity Advisory Board, a new panel of outside experts.

What does a fashion designer know about technology? Not much. But that's the point. To drive change following a radical restructuring, Philips reckoned it needed a fresh perspective from creative types with no ties to the company. So it formed the simplicity board, a group of specialists in health care, fashion, design, and architecture. "Philips was too inward-looking," Ragnetti says. "To really embed simplicity into the company's dna, we needed an element of vision."


The four-member board's mission: Help Philips focus on "sense and simplicity." That's what the company is calling a new branding initiative to underpin its transformation from a high-volume electronics maker into a design-led company concentrating on health, lifestyle, and technology. Berman--who heads a successful clothing label--is helping the company explore new opportunities in consumer products. Dr. Peggy J. Fritzsche, a radiology professor in California, advises Philips on its $8 billion medical-equipment business. Gary Chang, a leading architect in China, serves as a brand ambassador in the mainland. And John Maeda, a graphic designer and professor at Massachusetts Institute of Technology, is working to fine-tune the emotional appeal of the company's wares.

On a practical level, the board is helping Philips rethink what its customers want. For two years, members met for several days every month or two in cities such as Rome, Paris, or New York. Today they no longer meet as a group, but each is on call to help Philips create intuitive, easy-to-use products that meet specific needs. "In the past, companies just developed the technology and hoped someone would buy it," says Ragnetti. "Now we are starting from the point of discovering what exactly consumers want a product to do."


Philips has given the board members free rein to kick the tires. When the consumer electronics unit was ready to launch its Wireless Audio Center, a system for listening to different tunes in multiple rooms around the house, Maeda gave it a whirl. His verdict: Too much computer jargon such as "booting up, please wait." "His suggestions were mind-opening," says Geert van Kuyck, Philips' senior vice-president of global marketing. Maeda's input "made us ask questions we hadn't asked before."

The outside perspective came in handy when assessing Philips' fast-growing medical business. As a practicing radiologist, Fritzsche, noted that medical equipment is often too complex. Although the quality of images has grown dramatically, Fritzsche says the greater detail and quantity have increased the burden on radiologists. Offering so much data led to information overload instead of better diagnoses. With Fritzsche's insights, Philips is working to make its gear more intuitive, allowing doctors to spend more time with patients and less grappling with technology.

For Philips, the promise of simplicity isn't just about making products that are easier to use. The bigger challenge is rewiring the entire organization. The board's primary contribution, says Berman, is "using creative chaos to affect lasting change." That's trickier than it might sound. "Simplicity," says Maeda, "is actually a very complex topic."

By Kerry Capell

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