One Part Resonance One Part Edge: How Philips Built a Better Business With a New Recipe For Validating Consumer Insights

Alex Batchelor, Federico Trovato

INTRODUCTION: AN ORGANIZATIONAL SHIFT IN A MAJOR ORGANIZATION

Philips was in trouble. For years it had prided itself on being first and foremost an engineering company. Indeed, every CEO in the history of the company had come from either the corporate research, lab research or research and development departments. However, the company that had developed so many of the twentieth century’s technological advances was beginning to realise that it was not connecting with the people it hoped would buy its products. Philips’ management recognized that a revolutionary change was needed in the way it structured itself; that it needed to put consumers at the heart of their business.

Philips was forced to take stock and redesign their entire organizational structure to ensure that everything they did resonated with their market. The business was spread across many different sectors and categories, but it needed a single unifying promise to express its new consumer-centric belief. They examined their four core competencies; healthy living, personal care, home living and interactive living, and arrived at ‘Sense and Simplicity’.