— that’s why John Frank is transforming the business
Philips Sleep and Respiratory Care’s strength — innovation — gives it a competitive advantage, but that doesn’t mean the road ahead will be smooth sailing, says John Frank. The business group is undergoing a transformation from a medical device company to a service solutions-oriented business that is more consumer focused.
“The success that this company has had over the years as a medical device manufacturer is well established, but we also recognize that what made us really successful for the last 40 years of making products, great products, that, in itself, is not going to be enough to get to the next level of reaching patient populations,” says Frank, business leader of Sleep and Respiratory Care at Philips, who first joined Respironics Inc. in 1993.
Philips bought Respironics in 2008 as part of the Dutch multinational company’s move to focus on health technology and shift away from industrial areas like lighting and television. Today, Sleep and Respiratory Care at Philips has approximately 1,800 employees in the Pittsburgh area, and the business, part of Philips’ Connected Care reporting segment, has annual sales of more than $2 billion.
In addition to transforming its business operations, Sleep and Respiratory Care is undergoing a physical change, and a large team will be moving into Pittsburgh by early 2020. That is the result of a move two years ago, when the company leased space in Schenley Place for 200 employees with design, marketing, digital software and advanced research expertise.
“We thought those were the four core key elements to put together in that location to see if it does, in fact, spark our innovation, build our network and, frankly equally important, enhance our recruiting ability to get more people engaged in what Philips does,” he says.
The experience was so positive that the company decided to move its entire organization of developers, marketers and business people to the Bakery Square area. Manufacturing and distribution employees will stay in Westmoreland County.
Iterate your way to success
Sleep and Respiratory Care focuses on patients with sleep disorders or those who need better sleep, as well as those with chronic respiratory insufficiency who struggle to breathe and require assistance. Among other innovations,
the company developed and commercialized the continuous positive airway pressure, or CPAP device, for sleep apnea and portable oxygen concentrators, which weigh less than five pounds and generate oxygen within the device itself.
“It’s in our DNA. It’s what we do quite well, and our belief is innovation happens only when you stay deeply connected to your core values, and that is staying very close to the markets that you serve,” Frank says. “It’s easy to say, often difficult to do. But our success is based on having very deep, deep insights — following the patient’s journey, following the pain points that they go through.”
To ensure that innovation continues, the research and development team at Sleep and Respiratory Care is the largest group of associates in the business, says Frank, who played a key role on the development team for many years.
“They’re in the center of what we do,” he says. “And that innovation not only occurs in developing new technologies, it also happens by our development teams who innovate new services.”
But R&D effort alone won’t get you to a final product; you have to iterate your way to success.
Frank says the company breaks it down into two buckets. Quest experiences focus on pilots and early experiences. Once the company knows a product meets a need and that opportunity can be served, the potential product moves into a commercialization process to develop and finalize the technology. And because there are always more opportunities than resources, prioritizing the right innovations is important.