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How Philips’ “Radical Pivot” Made Them Innovation Leaders

October 13, 2017, 1:33 PM UTC
Philips, the 126-year-old Dutch conglomerate, is famous for everything from electric razors and light bulbs to semiconductors and television sets.
But Frans van Houten has been changing all that since he took the helm in 2010. Philips is now a healthcare technology company. Most of its $18 billion in revenues now come from products like MRI scanners to those ubiquitous electric toothbrushes.
Van Houten tells Fortune, “When I became CEO, I was really worried that we were in commoditized segments that were mature and no longer growing. So we made a radical pivot into health technology because that is one of the world’s unmet needs.”
The U.S. Is Philips’ single-largest market, accounting for more than a third of its global revenues. As the debate on repealing and replacing the so-called Obamacare system continues to intensify, especially after President Trump signed an executive order that will allow consumers to buy health insurance across state lines and expanding the use of health reimbursement plans or so-called HSA’s, Van Houten is still optimistic about strong growth prospects for Philips’ health care products in the U.S.
Ahead of that news announcement, Van Houten said, “Our strategy is focused on driving better outcomes for patients and higher productivity for hospitals. That is so much in demand and it is universally true whatever happens to the legislation in this country.”