By Bernie Cahiles-Magkilat
Philips, the giant Dutch electronics and lighting company, represents some of the most iconic products in the country from light bulbs to transistor radios and other household gadgets
Along with the company evolutions over its 125-year history, Philips Light is reinvigorating its presence in the country. It is bringing a whole new technology of connecting light to the Internet of Things (IOT) and moving from product sales to systems and services.
Country Manager for the Philippines Jagannathan Srinivasan has found a country that matches his drive for challenge and excellence.
Aside from doing real business, he is committed to end another form of hunger in the Philippines: Light poverty.
Philips has been revolutionizing lighting for over 125 years. They pioneered the world changing development of electric light and LED, and are now leading the way in intelligent lighting systems. Their deep understanding of how lighting positively affects people, enables them to deliver innovations that unlock new business value to their customers. Philips Lighting offers rich lighting experiences that make people feel safe, comfortable, focused, energized, and entertained.
Philips Lighting leads the ongoing development of connected lighting systems and services. By leveraging the Internet of Things, they are transforming buildings, urban places and homes, increase energy efficiency, manage working environments in a more environment friendly way, make cities safer and more responsive and help heal and improve well-being.
On May 27, 2016, Philips Lighting successfully debuted at the stock market making it a sole business and enabling Royal Philips to focus on the fast-growing health technology market. After all, Philips began as a lighting company in 1981.
Philips Lighting has a strong position in the LED market and in 2016 reported sales of 7.1 billion euros.
The new publicly listed company has announced it is on the verge of reinventing the lighting industry as it moved from LED to connected lighting from a product sale to a systems and service sales in order to be present on the full cycle of the product.
In the Philippines, Philips Lighting established in 1956 its corporate presence at the Trade and Commerce Bldg. in Binondo, Manila – the premier business center during that era. It won the hearts of Filipinos and has become a household name for its products. It even used to have a light manufacturing operating until it decided to go somewhere else. The Philippines was fortunate to share half or 60 years of Philips journey in all stages of lighting evolution from incandescent to halogens, compact, to LEDs.
“Philips Light has done well in the Philippines,” admits Srinivasan even as he noted that Philips Light and the lighting industry have changed considerably.
“Change is not something new to us,” he says.
With its new structure, Philips Lighting is basically a one-year-old company.
Thus it can qualify as a start-up, but with already a rich heritage of 125 years of innovation. It has retained a vast amount of knowledge and have built competencies and skills in various fields of technological innovations.
Prior to his assignment, Srinivasan served as Chief of Staff of Philips Lighting (Amsterdam). When Philips became a public company, Srinivasan was offered three offshore positions: London, New York, and Manila.
Srinivasan could have chosen the glamour of London or New York, but he was not the kind who would settle for anything easy. He chose Manila.
“What did you do wrong, why are you being punished?” his friends would say.
He may not have this messianic complex, but really he feels he would be needed here and was challenged by the huge potential of this market.
He cited the vast recognition that this place needs massive infrastructure and the new administration has made known of its intention to invest in infrastructure that will contribute about 6 percent of GDP.
“This will put the Philippines at the brink of progress,” says Srinivasan citing the huge consumer market of 120 million Filipinos.
With economy growing the fastest in the region, the Philippines has not been getting a fair share of foreign investments. Any businessman should have put his money where his mouth is.
“One of the reasons I become interested in the Philippines is the huge potential of this market and my heart says we’re not tapping these opportunities. So, I would like to bring about growth to the business as we see the time is right to make an impact to the society and country,” he adds.
With all factors considered, Srinivasan had the strong urge to come to the Philippines for the very first time.
“I was very keen about getting here so I just enjoy the ride and not hold the truck. Here, I can make a difference,” he adds.
He was keen on the wide spectrum of market that his widest portfolio of Philips products can tap into. Some areas are not yet electrified where Philips solar and LED solutions can make a difference. There are big cities that could be transformed into smart cities by using IOT.
These opportunities also boosted his confidence to convince his wife he made the best choice.
“When we got here, it was a lovely place and we get nine extra months of summer because we don’t have much sun where we came from,” says Srinivasan, who moved here with his family in August last year.
“I got a feeling of things getting positive here,” he adds.
In just the few months that he was here, Srinivasan already met with some public officials and from the private sector who have the appetite for what they have.
“Mayors are willing to open doors and we have lots of discussions and what we can bring about. I think there is an open mindset that is indicative of a shift in appetite for progress,” he adds.
Since Philips is the only “A” brand left in the country, it can leverage on this opportunity to build further its image as the lone reliable partner.
He emphasized that Philips is beyond selling products in a box. They can configure systems with specific applications and services. They can enter into multi-year contractual commitments to take care of lighting installations.
“That is something we can bring about in a concept of circular economy,” he adds. As a service, Philips can manage the lighting assets of a hotel so there will be no waste and no additional capital on their part.
This way, a company’s capex will all go into its operating expenses. They will not invest heavily in capital but they get the latest in technology. Using the Philips LED lights can reduce significantly the cost of lighting of a company.
“Lighting is not core investment so a company can convert the capital requirement into operating expense, which is a win-win model for both the customer and Philips,” he adds.
If only there is an awareness and everybody is doing right, this could accelerate the adoption. Philips has a commitment to help in the climate change. In 2015, it called on the world, government, and business to do the same.
“That is only the lowest hanging fruit, but if combined with smart dynamic controls in the IOT, savings can go as high as high 80 percent. No industry can give you that kind of impact,” he points out. The use of LED lights though is still very small and the percentage of those connected to the smart IOT is less than one percent. A 9- watt bulb can have an equivalent illumination of a 75-watt bulb enabling an 80 percent energy savings.
Philips aims to be carbon neutral by 2020 meaning 100 percent of its energy consumption would be renewable energy (RE). It has been making steps where from 8 percent in 2008, its RE mix has gone up to 53 percent in 2015 already.
Last year, Philips they made a commitment in New York for its small tangible for three dream milestones: by 2020, every building is lit up only with LEDs; by 2025, every street is lighted with LEDs; and by 2030 all buildings must have switched to LED.
This call to action will be more significant in this country as the government ratifies the Paris Agreement on Climate Change.
Philips is diversifying all its business segments to balance its B2B and B2C business to stand on two strong legs.
“We are a people’s brand,” says Srinivasan. This makes it more compelling for them to cater more different consumer needs. By strengthening both legs, it is important that they will lead in the transformation for IOT and connectivity because IOT is not limited to smart cities but even to individual homes and small towns.
For instance, the Philips Hue is a connected lighting for homes. This is something that can work for the Philippine market. What it does is it gives one control over their household lighting. A lamp is connected to the Internet through the mobile phone to produce different colors that can be programmed to react to certain conditions.
“We created unique applications so we give individuals control of his environment. This maybe a small innovation, but very meaningful,” he adds. Applications are also set to control the intensity of the light depending on your mood.
Philips Lighting has started installing in Jakarta its city touch lighting solutions where city engineers use maps to access all data available to conserve energy. By being able to access data on all electric poles, he can influence and program it to be reacting to data and actual situation. During heavy traffic, the light can be raised to a certain level of brightness and at midnight it can be dimmed a little bit.
The application is programmed in such a way it can react as to what kind of response necessary. What used to be providing illumination has now transcended to be able to provide more service to people.
This technology is making a difference to the economy and to the street vendors because the streets have become safer.
“That is our promise and that is our mantra to bring light beyond illumination,” he says.
In Los Angeles, Philips is currently piloting a program wherein its lamp on a light pole can detect anomaly in the noise level, a spike in noise level like a gunshot can be detected sending a signal to authorities.
“With that kind of promise, residents get immense value and are happy and they feel safer in their neighborhood,” he adds.
“All of these are possible in the Philippines,” he adds as he shared Philips project with WWF in Lagonoy, a fishing village, where they provided a solar power central lighting. This project has enabled fishermen to do preliminary processing of their catch. The community is now thriving and commerce is getting better with some fishermen already starting to export their produce.
“What a big difference we can make and this has nothing to do yet with IOT, just the basic lighting,” he adds. But there are still several areas in the country without power.
“We should end light poverty, this is not a concept but we are basically taking this position,” stresses Srinivasan.
In fact, there are 1.2 billion people worldwide with no light so when life comes to a standstill they are using wood or candle.
“In this day and age, there is no reason why they have no access to light. So once again, we are taking upon ourselves to end light poverty in the world,” says Srinivasan.
Philips’ “Gift of Light Program” is one of the small steps but could bring big impact to the lives of people. Philips has been distributing to offgrid areas solar kits as part of its CSR.
Srinivasan, however, said that Philips can only do so much, it needs partners to really make a big dent on light poverty.
“We are at the forefront, but this cannot be done alone so if there are more local government units that are interested, the more government officials, we are happy to be involved,” he adds.
For the retail side, Srinivasan vowed to introduce new products that will benefit and delight consumers.
Philips always invests in R&D to come up with more impactful products to its customers. “We invest a significant 4.3 percent of total turnover of 7.1 billion euros in innovation,” he adds.
“So, it is not a surprise that we are able to offer to the world a cutting-edge technology,” he adds.
There used to be 3 big players in the lighting space. Now, there are 3,000 LED light producers from China. However, nothing beats the Philips quality.
“We are a competitive brand and there is a promise behind the brand that puts us in a significant advantage,” he adds.
Its products are imported from its plants from all over the world. Philips has always been a premium brand and can compete in terms of pricing. However, it does not engage in that sales strategy.
“Most of the time we are setting the trend in the market so competition follows on what we do. We have aggressive cost although we are conscious that whatever savings we have, we pass on to consumers,” he adds.
It has engaged architects, developers and light product specifiers to capture the growing real estate industry. He aspires that the project based business will become a significant engine of the company’s growth.
As business progresses, he hopes the Philippines to become a significant source of growth in the region.
Srinivasan has a very dynamic leadership style. One of his mentors once said that when you start a new team, try to stretch them as much as possible and set the pace so fast, raise the bar so high so that it becomes clear what they are capable of handling. Once the team has become mentally mapped, then that is the time to decide on new standards.
He has been doing this for the past 9 to 10 months. Obviously, there are people who are quick to embrace changes while others need more encouragement.
Srinivasan himself, a result-driven and customer centric with entrepreneurial mindset, has a consistent high performance track record.
As a student in India and as a scholar at the National University of Singapore, Srinivasan has learned to be a pretty straightforward manager, a culture he embraced from the Dutch.
“What you see is what you get, I don’t necessarily sugar coat a message. Make people get used to that, that it is not a preamble that flatters you,” he says. He realized also that his team here had to get used to his no nonsense kind of management.
He is also rallying his team to work together because greater things cannot be pulled off by individuals.
“So we are trying to pull it off together as a team. With a sense of purpose and vision we can get the best results because we have a shared purpose,” he adds.
He shared that when he painted a vision for growth and how to be the growth champions of the world, he intentionally opened it to a challenge and debate. He likes ideas to be tested by debating on it and the end of the day, they will work on the gameplan.
“Typically, the quality of the outcome is always there when the intensity is high,” he says noting that these debates are all about the business, nothing personal.
“No matter what I say, I play the devil’s advocate to encourage diversity and come up with diverse perspectives and bring a sound outcome not because the leaders dream of it but also that my team get used to the inside boardroom where such exchanges take place,” says Srinivasan.
The Asian culture does not normally engage in this kind of debates, but these are healthy business debates. At the beginning, he finds it draining but later on his team has started voicing out their views that are different from him.
“And I like it because when there are different views to support and counter my stand because that is a better way to spend energy by getting people to talk,” he says.
The first three months might be difficult, but he pursued this kind of conversation because he has a mindset that he was assigned here not to make friends necessarily but put the business on the right track and in the process make friends.
“Now I am happy to see people are increasingly opening up and understand that these debates are useful for our business intentions and that for me is proof that my team is getting into a maturity level that is helping the progress,” says the mechanical engineer who once worked in a Singapore shipyard.
Srinivasan joined Philips in 2000 and during the interview he said he was going to leave the company in three years, but the company makes it very compelling for him to stay on. His first job was as a satellite support engineer in a factory in Singapore then moved on to production. The diverse culture at Philips got him hooked up.
So far, the nicest memories in the country were trips to Sagada and Bicol where he found the countryside awesome. Though he finds the Filipinos’ English perfect, he still intends to learn the local language to engage the very friendly locals.
But that is not the goal, the goal is to end light poverty in this country. He should be winning in this battle.