Interview Of The Week: Jeroen Tas

Jeroen Tas is Philips’ Chief Innovation & Strategy Officer, with responsibility for driving innovations in smart systems, software and services to improve people’s health, embedding artificial intelligence and the Internet of Things.

He previously led the company’s Connected Care and Informatics businesses and was CEO of Philips Healthcare, Informatics Solutions & Services, overseeing digital health and clinical informatics and was the Group Chief Information Officer, leading IT worldwide.

Before joining Philips Tas co-founded and served as President, COO and vice-chairman of the board for MphasiS, an IT and Business Process Outsourcing company, which was acquired by HP in 2006. From 2007–2008, he was Vice President and General Manager at EDS, responsible for its global competency centers. Tas also worked as head of Transaction Technology, Inc., Citigroup’s tech lab, where he was responsible for the innovation and development of Internet banking and self-service devices.

He recently spoke to The Innovator about Philips’ digital transformation and the digitalization of the health sector.

Q: What does your job entail?

JT: I’m responsible for R & D, innovation management, design, our clinical office, our enterprise platforms, our emerging businesses and ventures company strategy and sustainability.

Q: How does Philips approach innovation?

JT: We look at each of our businesses innovation in terms of technology but also clinical innovation, business innovation and experience innovation. We also look at the external ecosystem through three different avenues: partnerships, participating in startups as well as mergers and acquisitions. We have been and will continue to be pretty active in the acquisition space. We have four innovation hubs that bring all of those capabilities together. We do research, engineering, design and we have people working with startups in those hubs, which are located in Eindhoven, the Netherlands, Cambridge, Massachusetts in the US, Bangalore, India and in Shanghai, China. We also have innovation satellites in Hamburg, Germany, Haifa, Israel, and in Atlanta, Georgia in the US. Each of these hubs is responsible for geographic markets — Cambridge for North America, Eindhoven for Europe, India for Southeast Asia and Shanghai for Greater China. To help enable the ecosystem we have done four innovation initiatives. Each of these invite startups to participate in specific challenges. We fund some of the work and select the ones we want to continue working with. These are big jamborees with lots of energy and excitement around them.

Q: How is this approach changing Philips?

JT: The old Philips had a big wall around it with security guards. Now our innovation headquarters literally has a vibrant ecosystem surrounding it. We have turned it into a tech campus with some 200 companies, including chip companies ASML and NXP. The Bangalore center is more software focused. In China we just last week had what we call a Breakthrough Day, an event focused on working with start-ups on innovation. For us these innovation centers help us to take the pulse of what is going on and give direction to it. We get them to challenge us and come up with solutions that fit with our overall strategy or even disrupt it.

Q: What does Philips offer startups?

JT: The healthcare industry is not like consumer industry. It takes quite a long time to get a product out there and many of these health startups will get disappointed. If something works we can help startups with the regulatory aspects and making their propositions scalable. Many times they have a great innovation but they don’t know how to navigate the clinical process, to deal with IP protection, legal and regulatory issues, how to build a channel and how to support these products once they are in the field. These are areas where we have a lot of expertise and can share that with startups.

Q: Healthcare is increasingly becoming digital. And so is Philips. Can you talk about how this is changing your business models?

JT: We are working on new business models that turn our products into solutions and we are selling in a completely different way. We have, for example, developed an AI platform that we plan to link with radiology departments for them to create algorithms. We help them validate those algorithms and then put them into our portal so that any customer can use this as a service to improve diagnosis of disease. We are going to launch that pretty soon. We are looking at many other ways of packaging solutions. This is a completely new way to innovative that is clearly different from just selling another device.

Q: Can you give us some other examples?

JT: Cardiology is a good example. We sell everything from defibrillators to EKG equipment to informatics that cardiologists use to diagnose chronic heart failure. What we haven’t done is to integrate those things into packages that make sense to our customers. Now we are launching services that allow hospitals or clinics to basically get the services and create a cath lab to fit their needs (an examination room with diagnostic imaging equipment used to visualize the arteries of the heart and the chambers of the heart and treat any abnormality found). We operate the cath lab for them as a service instead of asking for an upfront payment of several million euros. To me that is true innovation: innovating your business model and creating a digital ecosystem. In this case it involves integrating interventional imaging systems with ultrasound , real time software for image guidance, EKGS and smart catheters to quantify and visualize the arteries from the inside. Or to turn all retrieved patient information in lifelike 3D image of the heart to better define a treatment strategy. All is meant to ensure better patient outcomes and more successful procedures.

Oncology is another example. What if you could take five hospitals and connect them so that there is a central operating hub that can team up on new ways of looking at cancer? How powerful would it be if you could bring different oncologists together with state-of-the-art equipment and have them collaborate on the cases and collectively select the right therapy? That is a very different sell than selling one more machine.

Q: How do you adapt your sales force?

JT: You have to create new business models and be ready to co-create your products with your customers and then figure out the way you configure the price and the contract. It also requires the setting up of a separate organization that deals with solutions. We still do transactional sales but now we also offer solutions. It is a work in progress. Where we are most advanced in this — and this comes as a surprise to most people — is in China. If you look at our last quarter this model is generating a lot of growth in China.

Q: Why China?

JT: In China we are competing with people that are still transactional sales guys. It is more out of necessity that we launched solutions there because it hard to compete on the box level. The biggest value we bring is end-to-end solutions. In China they are building heart and cancer centers and are looking at the informatics and data that will allow them to leapfrog. Our large customers are starting to look not just for the best imaging system but much more for interpretation of the images by leveraging data. Big investments are being made in AI to optimize disease detection, workflow and support of specialists. We are testing these concepts in different markets. We are exploring what markets give us the pull to prove that customers want it and are willing to pay for end-to-end solutions.

Q: Outside of China where is Philips seeing demand for solutions-as-a-service?

JT: We are doing some advanced AI work with big customers in India. In India there is a different set of problems, including access to care. Even if they double the amount of doctors and nurses there will not be enough healthcare providers so they are looking at models to really expand access to care through automation and lot of that will be AI enabled.

Q: What about in the West?

In the western world AI is being used to do a very precise diagnosis of a patient and to prescribe the right therapy. It allows radiologists to not only look at what you see in an image but also to automatically capture previous tests to know what is normal and what is not. Just like there are digital twins of devices there will be a digital twin of you as a person — a four dimensional model — that will allow healthcare providers to look at you over time. This will be really important in understanding the person and helping healthcare providers — and Philips –deliver better diagnosis and care.