What Philips Wants from Open Innovation

By Scott Kirsner |  June 18, 2013

The Dutch lighting and healthcare giant Royal Philips is embarking on “one of the first attempts by a large company to do open innovation,” in the words of Greg Sebasky, the chairman of Philips’ North America business. The initiative is called the Philips Innovation Fellows competition, and it will run through late October.

The motivation, Sebasky explains, was “to listen to a broader range of inventors and others, and not think that our 100,000 employees will think of everything.” U.S. residents are encouraged to post concepts or products to the crowdfunding site Indiegogo, focused on three themes that Philips has laid out:

  • Living Well: For instance, technology that helps people have a restful sleep or a sense of security at home.
  • Being Healthy: For example, new products or services that enable people to better monitor their family’s health, seek medical treatment, prevent illness and live a healthy lifestyle.
  • Enjoying Life: Ideas that would help provide greater happiness in people’s lives, including being an active part of one’s local community and living independently as one ages.

Submissions will be judged by a “steering committee” made up of Sebasky and three other Philips execs, along with representatives of Bloomberg Beta, the media company’s venture capital arm, and Ashoka, a non-profit. One criteria is whether the concept can gain the support of at least 100 financial backers on Indiegogo, a site similar to Kickstarter.

What does Philips hope to achieve with the Innovation Fellows program? Here’s Sebasky:

“My best case scenario is to identify an unmet need with a strong value proposition, preferably in the area of healthcare — an application or device that Philips is interested in taking forward, with some ownership or partial ownership — and helping the inventor realize his or her vision.” He says the ideal kind of product to emerge from the competition would be something that could benefit from Philips’ existing distribution channels.

Other goals, he says, include making Philips “more visible as an innovator, and improve our ability to attract the talent we need, because we’re trying to improve our employer brand as well as our consumer brand.” The company makes everything from the LED lights that illuminate the Paris Metro to electric toothbrushes to ultrasound imaging systems.

I asked Sebasky about the biggest internal conflict in getting the Innovation Fellows idea off the runway. Not surprisingly, it involved the lawyers. “The big questions were how do we think about intellectual property in an open innovation environment, and were we comfortable with having our employees mentor the winner of the competition. Eventually, we decided that we were, because we thought this would reach a lot of people and stimulate ideas.” In addition to receiving mentorship from Philips execs, the top winner of the competition will receive $60,000.