Innovation Process Consulting (Philips HealthTech)

This project was to consult with Philips HealthTech and provide the recommendation to accelerate their innovation process and bring quality into their innovation. It was for Philips Respironics – a company that deals with respiratory care and sleep apnea. Philips has been working in this domain since 2008 after the acquisition of Respironics – a Pittsburgh based company catering to sleep care and apnea. Since then Philips has come up with multiple products in this domain which includes dream stations and sleep systems. Philips wants to move from medical devices to the consumer health segments due to the pressure of reimbursements and profitability and trying to put HealthCare directly in the hands of consumers. SmartSleep is one such product. Its huge customer base is an added advantage. However, the company has been facing problems with its innovation process lately and that is where we came on board. Starting with the problem, the problem that the company was facing was three-pronged. They did not have enough ideas in their innovation process funnel, the revenue expectation was overestimated, and they wanted to know if they are at par with the industry benchmarks in terms of time to market, kill ratio of ideas, and other Key performance indicators i.e. KPIs. Our objective was to identify the key problems and provide feasible recommendations for value generation.

My Role
Innovation Consultant
3 Months
Skills Used and Nurtured
Technology consulting, Presentation to leadership, Qualitative research, innovation consulting
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The Challenge

  • The company historically did not bring customers from the very initial stage of their innovation.
  • The cultural change which we were about to suggest was very difficult for any organization specially for someone like the size of Philips.
  • I had to find multiple highly valued interviewees so that I can support my findings. Those connection and getting time on their calendars was a difficult task to accomplish.
  • The result was very qualitative and hence it took a lot of revisions to the final presentation to prove the value of the findings and make Philips believe that the suggested actions will work.

The Process

We took a step-wise approach. First, we tried to Understand Philips' innovation process. Second, we Identified comparable companies and managed to get 17 interviews with 6 different companies and 3 consultants overall, most of them being direct or onsite interviews. It was a challenging task in terms of reaching those people through our connections. We went through multiple literature research and identified the key drivers of innovation. Next we re-evaluated Philips’ current process against findings and went with few repeat interviews to gain more insights over the topic.

Post these researches we recommend Philips to create a customer centric culture and involve customer from the very beginning of their innovation process with the help of interviews and focus groups. Involving cross functional teams in the early idea filtering stage will help accelerate the process by a quite large extent. Conducting boot camps and trainings in the ideation stage will help the employees in filling the gap that existed in the process. This was an ambiguous problem related to fuzzy front end on an innovation process, and almost all the industry leaders that we talked with has one phrase for the financial projection “it depends”. Because no one is sure about the finances at the very beginning of the process and hence an innovation process cannot be judged on the basis of financial projections.

The exact findings and its comparison to current Philips’ investments and situation is confidential and hence cannot be shared here. However, the suggestion that we provided had a potential of raising the top line of the company by 40 million dollars per year.

With every great plan, there still are risks involved. The two major risks which we could identify were the cultural change of involving the customers from the very beginning and cost & time investment in their involvement and training. Going for a pilot run is what we suggested. Assigning one dedicated resource for the ideation phase and instilling customer involvement from the top of hierarchy will be the best strategy going forward.

The Impact

  • Post recommendation and successful implementation we expect that Philips HealthTech was supposed to reduce the duration of project by around 4 months.
  • Though the scope of the project did not need any quantification of results due to fuzzy nature of front end innovation process, we have approximately calculated the financial impact by acceleration. These recommendations will not only bring ideas with higher potential but also help save around 832K due to acceleration and has a revenue potential of 40 million.
  • Our recommendation will bring a cultural change to the organization and this change aligned perfectly with the strategic goals of Philips to move towards consumer health segment.
  • All our recommendation and findings were validated by client and marked as feasible. The head of advance innovation team at Philips, Bill Gaussa, affirmed that we were right on spot what the company is trying to do and they wanted to continue the project with us in the coming summer for its implementation.