Welcome! This week I’m discussing digital transformation and healthcare with Jeroen Tas, the Chief Innovation & Strategy Officer of Philips. Most of you are familiar with Philips, the $25 billion Dutch manufacturing conglomerate that makes everything from smart LED bulbs to MRI systems. Jeroen has been with the company for ten years, after impressive tenures at Citibank and Hewlett-Packard. He was kind enough to speak to me from his home in Amsterdam.
Tien: Jeroen, you’ve got a big role as Chief Innovation and Strategy Officer at a legendary $24 billion technology company, where it’s not an exaggeration to say you are shaping the future of healthcare. But first, while we may all be familiar with the brand, can you give us a snapshot of what Philips is working on today?
Jeroen: Sure. Philips was founded 130 years ago on the basic premise that technology could improve people’s lives. We started with lighting, and then we moved on to electronics and healthcare. The company is really about making people’s lives better and healthier. That’s why several years ago we decided to focus our core competency on health.
We basically have four areas we focus on: personal health, connected care, precision diagnosis and image-guided therapy. And all of these areas are getting increasingly tuned to the specific needs of the patients, and are also providing much better guidance for the health professionals.
Tien: When it comes to the healthcare industry, what would you say is the broader problem that Philips is trying to solve
Jeroen: Well, let me start with a personal story. When my daughter was 12 years old, she was diagnosed with type one diabetes. At that point, everything you do becomes a decision point related to the disease. You become your own care provider. And at that time, it was very difficult because all the different facets of the care system seemed to be operating in a silo. The care was not organized around people, around consumers.
Tien: I’d love to dive into that. We have all this innovation, we have all this expertise. How do we weave it all together and provide an integrated healthcare experience for the customer? Was that the mindset that you brought from your financial services background into the industry?
Jeroen: Sure. My formative years were actually when I ran the tech lab at Citibank in the mid-nineties. Citi was very much an early pioneer in online banking. We realized at the time that it wasn’t about putting branches in the right locations, it was really about understanding consumers and their financial needs.
Tien: I was probably one of your earliest customers. I’ve been with Citibank since 1990. I remember when the first online bill pay product was launched on DOS!
Jeroen: That’s great. The whole idea was to design your services around the needs of the customer. At the time Citibank had already invested heavily in data. So every night they basically would run analytics on 50 million customers and try to identify the propensity for new products, but also the risk of attrition. So it was all about using data to solve customer problems.
Tien: And that was part of your thinking when you moved to Philips ten years ago?
Jeroen: It was definitely part of my thinking when I started looking at our own product propositions and saying, “Of course our MRI needs to be a very high-quality machine with a set of features that are compelling, but it’s really about the value. And how do we help our customers actually accrue the value of that machine?” It’s not like a car you drive off the lot and then the value drops 20% and you start depreciating the asset. So it’s a completely different mindset.
Tien: You organize your value proposition around the customer — in the case of an MRI machine, that customer is a hospital administrator.
Jeroen: That’s right. We have another product that’s a smart toothbrush. We have an AI agent on the toothbrush that helps you guide your brushing. So the whole idea is that the device becomes smarter and smarter; it knows about you, and it gives you relevant information. Now, how do you deliver that information? It can be through a smart mirror. It can be through an app. It can also be shared directly with your dentist. But the customer outcome is the same — a healthy set of teeth.
Tien: All companies call themselves customer-focused, but in my experience, a lot of them are still just trying to sell as much inventory as quickly as possible. What advice would you have for an executive that’s trying to lead their company down this kind of journey?
Jeroen: First, create a compelling story about how you can dramatically improve outcomes and value. And then you work your way backwards from that. If you share it’s much easier to get access, as opposed to saying, “I need to own it, I need to maintain it. I need to support it. And I need to put up the capital to get it.” Moving to a true services approach to a business can really expand access, scale and outcomes at a much lower cost.
I’ve asked our R&D leaders that when they create something new, they should always articulate it in terms of customer value. And we’ve created a very simple framework for that. The first rule is that it has to improve health outcomes. It has to create a better experience for the consumer measurably. So it has to be more seamless, more tuned, et cetera. It has to be more efficient and you have to prove that it definitely creates more predictable, better outcomes for that patient. And then once it’s in the field, then we need to continue to improve it.
Tien: That’s great. Start with the customer, focus on value, and find ways to unlock your assets and your innovation. Because at its core, the subscription model is about shared values and better outcomes. And you just showed us that when you get this right, the entire business wins. Finally, what is Philips thinking in terms of how to democratize access to healthcare?
Jeroen: We want to provide better access to good healthcare for two and a half billion people by 2030, but 400 million of those are people who don’t have access to care right now. So that’s forcing us to think into extremely low-access ways of providing care, which of course means digital.
I met with the CEO of Dana-Farber, one of the best cancer centers in the US, and she told me that despite their reputation, their patient base is still largely in New England. And she said, “Well, I have some of the best oncologists in the world. What if we can codify our cancer care pathways and provide clinical services to any hospital in the world?” So we started thinking about the concept of having digital access to their expertise, their knowledge, their pathways, and their protocols. So that any hospital can provide basically world-class cancer care.
The other way to provide access to care, of course, is to get it on your phone. To talk to an AI that helps and guides you, and when necessary connects you with a care provider. So these are the kind of models that we believe will dramatically create broader access to quality care.
Tien: I for one, am really glad that you switched from financial services to healthcare and the impact that you’re having with Philips! Thanks for sharing your journey to usership, Jeroen.
Jeroen: Thanks Tien!