Anyone who blithely believes that the return on investment on design is self-evident needs to explain the decline of Philips. In the mid-Noughties, the electronics company boasted 650 designers on its books, more than Samsung at the time. Yet, since a high point in 2008, its stock value has halved. It was no surprise, then, when last year, on Sean Carney’s first day as Philips’s design chief, the CEO took him to one side and told him straight that he was less than convinced about the value of design.
Carney is a no-nonsense Brit, with an international corporate pedigree. Most notably, he served as design director at Electrolux in Sweden and Italy, and was group director of experience design at Hewlett Packard’s Imaging and Printing Group in San Diego before being hired away by Philips. Bringing the entrepreneurial spirit he experienced on the West Coast into the 120-year-old Dutch company is very much part of his mission.
His diagnosis of the situation at Philips was that design could improve the company’s standing if it were better integrated with the business. In his words, design was too far removed from “the heat of the battle.” So he gave his design teams the objective of “moving the needle” to help Philips win more business and improve its Net Promoter Score. He set about changing the CEO’s mind by connecting design to different parts of the business.
Carney, who leads 400-plus creatives within Philips, has encouraged his teams to forge new links with departments such as corporate strategy, technology research, new business development, and country sales organizations. As well as breaking out of the bureaucratic structures around design, which were, in his view, the root of the problem, he emphasizes the need for a more networked and expansive view of how design functions. ‘We’re moving from designing individual product experiences to designing wider ecosystems,’ he says. Under his leadership, Philips has gone from designing health-care devices to working alongside its business development teams to devise elements that span a hospital patient’s entire care cycle. His work with corporate strategy often revolves around thinking more widely about new revenue streams.
Another initiative has been to loosen the ties of the design HQ in Eindhoven over the seven regional design studios. Not only are they closer to regional preferences and trends but are also better plugged into specialist technology and industry clusters. Carney is giving them more autonomy and coaxing them to take the lead in more initiatives.
At an executional level, he has also relaxed Philips’s brand guidelines to be more sensitive to regional and category contexts. Effective design languages hit the sweet spot between engaging consumers, expressing brand values, and being aware of category conventions. He gave the example of Philips’s packaging, which was overly consistent across categories as diverse as health care and personal audio, to the extent that it didn’t always sit comfortably or credibly on certain shelves.Carney now has a story to tell that should soften his CEO’s scepticism. Two years after launch, the Philips Fidelio range of music docks recently displaced Bose from top spot in the European market. This feat was achieved in a category that both Apple and Sony have failed in (remember Apple’s iPod Hi-Fi?). It’s also safe to say that few consumers would have associated the Philips’ brand with audio credentials before the launch of the first model in 2010. However, the docks have picked up hi-fi and design awards, thanks to careful finishes and intuitive UI details. More importantly, it’s selling. And it may not be a one-hit wonder, having been joined recently by the retro L1 headphones, which have garnered good reviews. If Carney moves more needles in this direction, he’ll soon have a much bigger turnaround story to tell.
Sean Carney will give a keynote presentation at the Product Design and Innovation conference in London on May 29-30. For info on attending, click here.