Speaker 1:
From the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, welcome Inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision, and business. For over 230 years, the NYSE has been the beating heart of global growth. Each week, we bring you inspiring stories of innovators, job creators, and the movers and shakers of capitalism here at the NYSE and ICE's exchanges around the world. Now, let's go Inside the ICE House. Here's your host, Kristen Scholer.
Kristen Scholer:
The healthcare industry has undergone significant change over the past several decades, shifting from a primarily reactive focus to a more proactive patient-centered approach, driven by advancements in medical technology and improve access to healthcare. Artificial intelligence is playing a transformative role in this evolution by enabling healthcare providers to make more accurate diagnoses, personalize treatments, and streamline operations. AI tools are being deployed to automate repetitive tasks, detect anomalies in imaging studies, reduce X-ray dose, and better integrate medical data.
Kristen Scholer:
Philips, NYSE ticker symbol PHG, is emerging as a leader in AI-driven healthcare by combining its extensive expertise in medical devices and health technology with cutting-edge solutions. Philips' AI-powered tools support clinicians by providing actionable insights, improving patient outcomes, and enhancing operational efficiencies. At the helm of Philips is today's guest, CEO Roy Jakobs. Taking over the role in October of 2022, Roy has spent the first two years of his tenure focusing on growth, innovation, and execution. With the company since 2010, overseeing multiple aspects of the business, Roy's career path has informed his current leadership, helping him better understand healthcare around the world. Inside the ICE House here at the New York Stock Exchange, Roy joins me to discuss how he and Philips' leadership are driving company growth. We'll detail the impact AI is having on healthcare, how Philips is working to continuously improve products and services, and how partnerships throughout the industry are benefiting the company's future. Our conversation with Roy Jakobs, CEO of Philips, is coming up right after this.
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Kristen Scholer:
Welcome back. Remember to subscribe wherever you listen and rate and review us on Apple Podcasts. You can also find full video episodes of the Inside the ICE House podcast on tv.nyse.com and on the NYSE YouTube channel. Our guest today, Roy Jakobs, is President and CEO of Philips, NYSE ticker symbol PHG. Roy has led Philips since October of 2022, but has been with the company since 2010 overseeing various business units throughout Philips locations in Amsterdam, Dubai, and Shanghai. Prior to his time with Philips, Roy spent five years at Elsevier and over seven years at Shell. Roy, thank you so much for joining us Inside the ICE House.
Roy Jakobs:
Thank you.
Kristen Scholer:
We'll get started here. A few months ago, you marked two years at the helm of Philips, a company with over 130 years of history and certainly a brand that has evolved and reorganized into one focused on healthcare. While everyday consumers often associate Philips with popular brands like Sonicare and Norelco, the company's impact extends far beyond toothbrushes and grooming tools. How would you describe Philips and the company's focus beyond those customer-facing brands?
Roy Jakobs:
We are very excited about the future and the value we can create towards delivering impact for improving health and well-being of people. That's our purpose that we are very passionate about. But we have been translating that also in a vision for delivering better care for more people, and that actually spans across the consumer side, keeping people also healthy, as well as helping them when they are in need of care in a healthcare system. That has been also the majority of the recent developments and innovations that we are providing for. So we have a number of platforms that we nowadays offer. We are very active in monitoring patients, in imaging patients, in helping interventions, minimally invasive interventions, and then actually tying it together with an enterprise informatics suite because the digitalization of care is very crucial towards delivering better care.
Roy Jakobs:
Next to then the consumer franchise that we still hold onto because we also believe it's important that we bring more care into the home. So having actually a very strong presence still into the home helps us also to understand how you change behavior, influence behavior, and support consumers in the home as well as supporting the whole clinical practice in the hospital.
Kristen Scholer:
Frederick and Gerard Philips, father and son duo, founded Philips & Co in 1891, driven by the opportunities created by the mass adoption of electricity. Their journey began with a production of affordable and reliable electric incandescent light bulbs. Now, more than 130 years later, how do you ensure that Philips continues to embody that same ambition that defined its founders in the late 19th century?
Roy Jakobs:
Yeah, so we're looking at making impact in the world. So when we look at what we are best at, is using technology and advancements in technology to innovate around big society challenges. At the early start of Philips, it was about bringing light to the people. Now it's about bringing the best care to people. And healthcare actually is one of the major challenges that we have to deal with as society and also in the US and across the world to make sure that we can take care of a growing patient population with actually less staff that has to take care of these patients. Whilst at the same time, we also still have big opportunity to ensure that actually we prevent people from being sick and if they get the care, then how we can make it as least as intrusive and as effective as possible for them.
Kristen Scholer:
Philips is powered by approximately 70,000 employees across more than 100 countries, each contributing unique backgrounds and experiences. With such diverse perspectives and the varied environments in which Philips operates, how have you over the past two years fostered a unified company culture and aligned teams worldwide towards a shared vision?
Roy Jakobs:
A great question. I'm very passionate about the people that work at Philips because ultimately the people make the difference. How we rally them is that actually people join Philips because we really have this combination of a deep technological and innovation culture with having this desire to have an impact on the world. So our purpose is very important, so as I mentioned, improving people's health and well-being drives us all. Then actually, how can we action that with delivering better and more care?
Roy Jakobs:
I've been also advocating a culture which focuses on delivering impact with care as a purpose within the company. That actually is really resonating well because we all want to make impact when we are working at a workplace. That actually is what gives a lot of satisfaction. If you can see a patient that actually gets the best scan, the best help with a therapy or intervention, and a child that needs to go through a procedure that might not be a great experience, how can we actually help that child to take an image in an environment that is more welcoming, shortening the time that they need to go through a scan, and making sure that the reports that come out are as quickly as possible produced so that they don't need to do the re-scan? So those are kind of activities that our teams and our people really rally around.
Roy Jakobs:
Whilst healthcare is very global in nature, diseases are nature, the application delivery is always very local. So actually, having this global footprint, having the diversity in our teams is super important because actually that gives us the right insights that we then can put into our innovations to deliver healthcare in a meaningful manner locally. Because healthcare delivery in the US has a specific conditions, where you work very closely with the clinical teams that you are supporting, with the ecosystem of startups and technology providers like we are doing with AWS and with Mayo, and then actually also work with administration because it's also very important that we have a systemic approach to changing healthcare.
Roy Jakobs:
When I talk about how we deliver impact at scale, it's about how we in a systemic way can change the healthcare practice. It starts with understanding what the clinical practice needs, and from that, looking at technology that can help support that practice in a better way, which we do from an innovation perspective. But you also need the financial incentives that support adoption of new technology and innovation, and you need to have the regulatory framework so that together we can all rally around how we serve that patient better.
Kristen Scholer:
I want to talk a bit about your career journey here, Roy. With roles at Shell, Elsevier, and of course now Philips, it's taken you across the globe, including to Portugal, Belgium, Amsterdam, Dubai, and Shanghai. How have your experiences in these diverse regions enhanced your understanding of global healthcare and the various strategies, philosophies, and methods used to deliver care in different parts of the world?
Roy Jakobs:
I think what's really helpful in being able to live in different parts of the world is that you get a real deep insight of the difference of perspective, and it's very normal that you reason from what you know. So when you're living in the US, you will reason from your US environment that you operate in every day. And that's your reality, that's what normal looks like. But if you're in Dubai or if you're in China or if you're in Europe, that reality is different. There are some common themes that you can pull out, but as I said, delivery is always local.
Roy Jakobs:
Give an example, if you're living in the Middle East, you need to be culturally aware of certain differences that exist that you need to bring into the healthcare practice so that you ensure that you have respect for the local environment and actually bring that back in how you treat. If you go to China, you need to be very much aware of the China speed of development of things because they move at a very, very high pace. So if you want to be successful there, you need to adapt to that pace. If you're in the US, you have some of the most advanced healthcare systems to work with, very demanding in what they want from you, so you need to really be able to be at par, because if you want to serve Mayo, they have, of course, big needs in terms of how you do that. And the same as with Kaiser or the same as with any other big system that you have in the US.
Roy Jakobs:
So I think having had the privilege of living across different parts in the world just have given me that insight of different perspectives, but also the respect for actually accepting that people look at things in a different way. So I always say you can have different viewpoints, but you should always respect different viewpoints, and that's something that I also got to learn personally when you travel around through so many different countries.
Kristen Scholer:
So from the beginning of your career, Roy, to today, the healthcare industry has undergone significant transformation. And before diving into the initiatives and objectives under your leadership, how have you observed the industry evolve over the past decade, and what key trends do you see driving its continued evolution?
Roy Jakobs:
I think healthcare practice has been undergoing a lot of change and will continue to have to go through a lot of change. There are a few reasons for it. The first and most important one is, as I started off with, there is this strong increase of demand for healthcare. That means that the current way of working is just not up to that increase. So we need to change the way of working. We need to change the clinical practice that on one hand still improves the outcomes because we want to fight cancer in a better way, we want to treat a stroke patient earlier, we want to actually have the cardiac diagnosis before the cardiac arrest happens. So the very clear objective in getting to better quality outcomes, and at the same time we also need to work on how can we provide more care to more people with this growing need of healthcare with less staff.
Roy Jakobs:
That's actually where then technology can and has to play a role to think through how do we get to better stroke treatment. We are tangibly working with the best clinical practices, but then also our technology, and that can be hardware and software, to actually make this a reality. Let me give you an example of what we're doing now in the Alzheimer treatment. That is a very popular recent theme. It's quite exciting that we can treat Alzheimer now with new medicine, but actually that requires much more imaging and imaging of the highest level, and for that you need to go to an MR scanner. But an MR scanner traditionally needed helium to operate. Because of helium, it was quite expensive. You also need to locate it in the basement of a hospital. Also, given the complexity of the scanning, it took and it takes quite a while before one scan is taken, can be 30, 45 minutes for one patient, and then actually thereafter you need to do reporting on a lot of data. So that actually takes some time.
Roy Jakobs:
So if you take that use case and what now is coming, so we have a new drug for Alzheimer that actually is very transformative in healthcare, but you need to think of all the steps before to be able to support that. So what we have been working on is, A, how can you come up with an MRI technology that has less helium, less cost, less energy uses on one hand. Because it doesn't have helium, you set MR free, so you don't have to put it in the basement because of the crunch pipe and the helium usage because of the dangers that it has. You can now use it anywhere in hospital. You can take it outside of the hospital close to patients, even close to elderly homes so that actually you can scan them where they are, so it's much better patient experience.
Roy Jakobs:
Then we used a smart speed algorithm to triple the scan time, and therefore you can scan double the amount of patients with less time in the MR. So that actually helps to absorb the load need that actually that new imaging has. But then we also have a partnership with an algorithm company that specialize in developing a specific algorithm for the reporting and interpretation of these Alzheimer images. And actually, with one click you get a report that actually gives you the supporting evidence whether or not to proceed with the medicine and the treatment. So that shows that along the workflow we are really innovating, we are collaborating with different players in the ecosystem to really advance care and to actually make sure that we can treat Alzheimer patients in a much better way now, along with then also the process that they have to go through in getting the better treatments and the better outcomes.
Kristen Scholer:
You became CEO in 2022. You launched a three-year plan when you did centered on organic growth, innovation, and enhanced execution across the company. Starting with a focus on organic growth, what key drivers and areas have you identified as critical to achieving success in that segment?
Roy Jakobs:
Yeah, so we are very excited about the portfolio that we have. As you see, because what you need to treat patients or to diagnose patients is something that we have in our portfolio. So our strategy is about how can we actually make the most out of the platforms that we have, which are starting with measurement of the patient, because you need to know early if something is evolving or you need to get a closer look on the patient. Then secondly, imaging helps you to really get a better diagnosis of what the stages of the patient. So there's a lot of future potential in that, and we are driving that with a lot of our technology advancements. And then also we are very excited and passionate about minimally invasive therapies. That actually is a field that's still growing in application, it's finding new ways how we can treat patients. It has a big patient impact because if you can help a cardiac patient not having to have an open heart surgery, but actually a few hours of intervention then they can leave hospital is a massive impact on the healthcare system in totality but also a very complex procedure. So also you need very complex technology to support it.
Roy Jakobs:
And then the enterprise informatics part of the portfolio, which has become ever more important because the digital side of healthcare is growing exponentially. We need to really tie the data together from patients, make the data flow so that actually you can put insights on top with AI, and then really revolutionize certain practices. So we believe we have a very strong portfolio at hand, and we are growing the potential of it. 70% is in high margin areas and high growth, 30% has more margin potential, so we are working at it in a differentiated way. And then how we provide the value is by innovating. And there I change to patient and people-centric innovation, so bringing innovation closer to the practice. Because if you want to serve healthcare well, you really need to work with the daily practice in the field.
Roy Jakobs:
So actually we're doing a lot of these, and Mayo was that example that I earlier referenced, but we do many of those clinical collaborations across the world where we actually really listen to the problems that they have, look at the workflows that they're going through, and then think through what different type of technology, whether hardware or software or AI, can actually help to solve those problems. The third pillar of the strategy was all about execution to scale the innovations, because what we also see as a need currently in healthcare is not about the technology that you can use to improve something, can you use it at scale? Can you make it intuitive and easy to use and to roll out over many systems?
Roy Jakobs:
Because, for example, in the US you see consolidation of healthcare systems. So many systems that we work with don't have one hospital to take care of, they have 50 hospitals to take care of. Now, if you have 50 hospitals to take care of, it requires a complete different infrastructure. So that makes that you want to standardize in part that infrastructure so it's easy to rotate stuff, so it's easier to operate, that you can get scale advantages. And then you get into big technology partnerships like we also have with NYU Langone, where we really have been working on monitoring on one side, on imaging on another side. And latest development is we are fully digitizing pathology with that healthcare system, because they want to put the data together, real-time data, imaging data, pathology data, genomics data. That gives a full new insight around the treatment potential, and we are supporting that in a major way.
Roy Jakobs:
So the innovation remains very, very key with the scalability. And for scalability, of course, then patient safety and quality is paramount, so that I raise very much to our first priority. Then supply chain reliability is another key theme. In COVID, we learned how vulnerable certain supply chains were, so we have been really strengthening the resilience of the supply chain, regionalizing it, making sure we de-risk components so that actually we can have delivery systems that work for the different customers in different parts of the world.
Roy Jakobs:
And the last point is also about simplification of the organization. Philips is a big organization. As you know, it's a long-standing organization. That also means that over time you gain complexity in dealing with more than 120 countries of the world and all these innovations. We still need to keep it simple, so I've been also rolling out a very strong drive to actually look at what we can do simpler. On one hand that's doing less activities, so leaning out, becoming more agile, also becoming more competitive, because with complexity you also carry costs and we are in a very cost competitive environment, so we need to continue to work that. But also it frees up oxygen in the organization for people to work on what they really like to be working on, which is not many steps in the process or approvals. No, it's about how we can actually make these innovations work and scale for customers.
Kristen Scholer:
That was really fascinating, Roy. I know the second focus of your plan, and we talked about this a little bit earlier, is patient and people-centric innovation at scale, a shift from the previous model, which was more corporate and technology led. How does this transformation ensure that Philips is better addressing the needs of those who use its products, ultimately improving the point of care for clinicians and patients?
Roy Jakobs:
Yeah, the real insight was, and I think we had a technology approach that actually was fit for purpose, but we were a different type of company. When we had still many different segments we were active in, whether it's lighting, whether it's consumer, whether it's chips, whether it's healthcare, then we had a bigger corporate technology practice that was working on breakthrough technologies that you then could land and find applications for us in these different segments. We have now really focused on two core segments, is healthcare in its fullest, as well as still consumer. For those, you need to be very close to their problems, and therefore I've been pushing innovation closer to the customer into the businesses, less of a corporate program around it. We still have some corporate investment around breakthrough technology development so we don't lose that in full, but the majority of what we do, 90%, is about how we empower our businesses to support their segments and customers in the best possible way. Because the monitoring developments and the measurement developments are different from the interventional therapy developments and devices that you're kind of working on.
Roy Jakobs:
So we empower those businesses to really drive the right innovation sets for their segments. But we also still make sure that when we deal with a hospital system that wants the total suite of solutions, of course, we also make it happen for them in an integrated manner, but that's all very close to the practice and very close with our customers. So that's where we have been driving the patient and people-centric innovation.
Roy Jakobs:
Maybe the last point, we spend around 1.7, 1.8 billion on innovation every year. That's a sizable amount. Half of that is in traditional hardware. Half of that is already now in software and AI, and that's also a fast-growing piece. That piece has a much faster development cycle than the hardware side. Hardware breakthroughs in medtech normally five to seven years for the next magnet, for the next kind of interventional therapy, for the next big monitoring platform. But if you look at the software evolution, the AI development, you can do that in a quarter, in two quarters. So you release cycle of innovation is also much faster. So again, that was another argument to kind of say, "We need to bring innovation closer to the practice."
Kristen Scholer:
Well, I know AI is at the forefront, obviously, and driving innovation really across industries. Philips, obviously no exception there. How is the company integrating AI into its products and services? I'd like to learn more about that. And how has it contributed to improving patient outcomes and enabling more direct efficient treatments by the medical professionals?
Roy Jakobs:
Yeah, it's a big question because AI is, of course, a very exciting topic. AI, of course, has many different ways and forms. And actually, we have not been using AI only recently, we have been using AI for quite a while. Yes, maybe in the old days this was more pure automation, deep learning, now is generative AI. So it is an evolution in application of what you can do with AI baseball [inaudible 00:25:03], so the national language models that we currently have in the practice.
Roy Jakobs:
But we have been seeing, and I think that's why it's so exciting in healthcare, that we are already applying a lot of AI in the products that we have now. So this is not a future promise, this actually is current delivery of value. There's no single product of Philips that does not have any way or form of AI in it. That's even in our consumer franchise where actually we use AI to predict when you need to change your brush hat on your Sonicare toothbrush. But on the other hand, it's also the most complex algorithms that really help to support the diagnosis of a cancer cell that you see evolving in somebody's body. So actually, there's a wide array of application areas. And I think that's also very important for AI that you're very specific about what does it need to do.
Roy Jakobs:
Because AI can do a lot, but you need to steer it well. You need to develop and test it well, and you need to really look at the return of it. Because AI is not a cheap technology, so there needs to be a real clear use case for it. And that's what we have been looking at.d I can take you through a few use cases to show you the power of AI already here and now.
Roy Jakobs:
So if I go to monitoring, we do monitoring in homes of cardiac rhythm failures. We have developed a very specific algorithm that actually helps to diagnose faster and more accurate whether there is a heart rhythm failure in somebody that actually is using our mobile device or patch when they are in their home setting. When we then pull that in, we can process the data and actually can ask the patient if they need it to send a report to the cardiologist. Cardiologists can then actually in an early phase start already to treat the patient so that indeed we prevent deterioration thereafter.
Roy Jakobs:
If you're then monitored in hospital, we have algorithms in our monitors that actually predict events from happening within 24 or 48 hours. So we have derived from all the years of experience and all the datasets that we have studied, we can predict from patient deterioration what our next event is going to happen. And again, from a patient perspective, you really want to prevent that next deterioration because those are very harmful events. Secondly, from a healthcare system of course, those causes stress into the system and also the cost, so actually you really want to use the best your abilities to deal with that. So that's a few examples in the monitoring space.
Roy Jakobs:
Now, then you have the imaging space, where was already was mentioning what we are doing in some of the MR developments where actually you can speed up the scan time. So now we have with smart speed algorithm you can triple the scan time of an MR. You can help actually positioning the patient first time right with a camera and algorithm that actually helps to prevent that a scan has to be retaken, because practice was showing on average a scan is being retaken two to three times because patients are not well-positioned or patients move in a scanner. So we have developed two types of algorithms. One was first time right positioning. Secondly, if they still move in the scanner, we have AI that actually adjusts for the movements so that you can still really use the image.
Roy Jakobs:
Then when the report needs to be made, we have AI that actually really helps to diagnose faster. And that can be from simple prioritization, saying, "Okay, these are the most urgent cases that you put up front in the queue for the radiologist to read," up to really identifying what maybe sometimes human eyes cannot identify and actually pinpointing to where your radiologist should focus his time on. So I think that also helps us to deliver a lot of value in the daily practice here and now.
Roy Jakobs:
The other point of AI is how can you really reduce cost, because it's not only about better care, it's also about how can you take tasks out of the workflow. There we are very much focused on how can we take some of the routine tasks out of the workflow that actually can be replaced by AI that actually lower the cost but also give time back to the caregivers. That can be in reporting, so we have now at the imaging show a clear example of where actually you speak towards the algorithm and the algorithms actually makes the report for you that you then just have to sign off on. But it uses all the adequate terms, including the reimbursement codes, so that actually you don't have to spend a lot of time on it as a radiologist. And we know they're spending a lot of time on it.
Roy Jakobs:
The same is for a nurse. A nurse actually spends on average 15 to 20 minutes on admin tasks an hour. That's a massive amount. And they don't want to spend the time on the admin, they want to spend the time on the patient. So we're also looking at how we can derive direct reporting out of our monitors. So actually it's pre-populated reports that then a nurse can sign off on. So those are a few of the examples of algorithm applications that are here and now available that either help to deliver better care or more care at more affordable costs.
Kristen Scholer:
I want to talk about the third focus too, Roy, of Philip's three-year strategic plan. It does involve improving execution across the business. How have you restructured and reorganized Philips' business units to drive these improvements, particularly in areas like patient safety, supply chain resilience, and operational agility?
Roy Jakobs:
Yeah, great and very important question, because ultimately innovation is really exciting, but the true value creation comes through executing it well. That's where I put a lot of emphasis on how we can do that also better within Philips. First priority I've clearly said is patient safety and quality. That starts with the culture of patient safety and quality where the patient safety and the quality always is the first priority of what we look at. That means that you need to understand the use case very well. You kind of get closer to the practice to really see what the innovations do, how they are working, and how you can make sure that they're designed for the best and most robust quality delivery.
Roy Jakobs:
Then you look at, okay, if I manufacture and deliver and service, how do I get that reliability up of the total value chain? So we have been working very strongly on the different parts of the value chain. It starts with where do you source the components from, and actually, do you have dual source components? Do you de-risk the components? Because the COVID crisis learned us that we became too dependent on certain single source components.
Roy Jakobs:
Secondly, you need to create designs that also are simple. If you have too many components, if you have too much complexity in the designs, actually you build complexity into products and solutions. So how can we actually make our design simpler and also design them in an integral manner? So when we design for product, you from the get-go have not only the R&D, not only the marketeer that knows the need, but also the procurement head, the quality and safety engineer, the regulatory specialist to gather at the table to really think through integrally what we need to deliver.
Roy Jakobs:
And then an important part of the supply chain was also how do we regionalize. And nowadays world shows every day more that actually you really need to be agile in how you can cater to different supply setups that are required. Some countries like China asked that you do mostly in country. We need to have 90% local for local they call it. And that is what we established. So we have local innovation, local manufacturing, local distribution marketing in China for China of China products. Same for other countries. You need to make sure that in North America we can source from North America or from the bigger Americas region so that we have proximity also of low cost countries like Costa Rica or Panama and Mexico to really also develop a robust supply chain in the Americas. The same we do in Europe, where we have certain plans in Central Europe but also in Eastern Europe. So it creates flexibility in your supply chain.
Roy Jakobs:
The last part is also how do you then organize your organization in the most effective way. And there I changed from, we had a triple matrix company towards one where accountability is clear with the business. So I said, "Okay, we have businesses that drive the monitoring, the imaging, the interventional, the consumer side." They get end-to-end accountability and P&L so that we can look clearly to one kind of team that actually is responsible for all steps to satisfy the customer. And that's what we have been at in terms of bringing more and more of the activities under that business leadership with clear accountability. That actually makes it simpler, that makes it faster, and that actually also brings that proximity again to the customers into perspective. So that has been one way of really making sure that we organize with a clear setup and a successful way for rallying around our customers and patients in an effective way.
Roy Jakobs:
And the last point that was also important is then also lean out, because we also had to do it in a more competitive way. So actually, we have been producing 10,000 roles year to date as part of the plan. And that's very painful on one hand because that also affects people that have been passionately working for Philips for many, many years. But at the same time, this was needed and necessary to keep us competitive in a world where competition is heating up from all parts of the world and we need to make sure that we stay lean and fit to be competitive as well. So that has been an important part of the focus of making the organization work.
Roy Jakobs:
And then it's not only about the setup, and maybe that's the last piece, it's then also about the culture that you drive. Culture for me is, simply said, how we work at Philips. So the culture that I want to work with at Philips is that we are all obsessed with driving impact with care. So we always need to think about what is the impact of the activity that we do so that we spend our time wisely on the most important activities, but also we do it in the right way, and that's what the care part shows. We need to do it in the patient safe and quality manner, in a compliant manner, taking care of our employees, but also of the climate and the environment that we work in. So a broader responsibility society to also take care of.
Roy Jakobs:
And that also really excites our teams. If I look to one of the areas that I really am proud of in terms of what we achieved in those two years is that we are significantly improving our employee engagement in that time that I started whilst we have been going through massive transformation. So it shows that if you have the right focus and the clear compass, if you show that you can help your employees to take a more and bigger role, that actually you also get then response to it whilst they need to change. And that's something that is really important because we need that energy, we need that excitement, we need that passionate workforce that actually puts forward its best every day to deliver better more care.
Kristen Scholer:
I want to ask you, since you became CEO, Philips has formed partnerships with some of the nation's biggest medical centers, including an eight-year collaboration with NYU Langone Health here in Manhattan. How will this partnership support NYU Langone clinicians enabling them to develop better care plans and enhance diagnostic confidence?
Roy Jakobs:
Yeah, great question. We are very proud to support NYU Langone in their strives for living better care. And they're a very forward-thinking institute that actually have a lot of great practices. We have been working very closely with them, had a great response also during COVID with them in the most dire needs. But we also see how they're pushing the practice, and one of the areas that they're very passionate about is how they can use data in a more meaningful manner to actually deliver better care. So we have been starting to work on that with monitoring, where actually we have been their monitoring partner for long. And actually, you get massive amount of real-time data that you can really can work better into the daily practice. And that in a tangible way means that you can early act on patient deterioration. You can earlier detect if you need to move them to a different part of the healthcare system, but also, if you then start to add other datasets, how you can enrich total treatment.
Roy Jakobs:
That's actually the venue that we have been going on with NYU Langone, where the latest really exciting development is that pathology is one of the areas where you have huge shortage of staff and increased demand of reading the slides, but it was still quite a very labor-intensive manual process. You cannot put AI on slides, so we went on a digital pathology track where we digitize the slides and the data, then actually enable the system to work at scale with these data and also combine these data with other datasets so that they can derive better patient insights.
Roy Jakobs:
That actually, I think, is where healthcare is going. The information that we can pull out of the relevant datasets really will enable better care delivery in a different way. And that's something that we're doing with multiple systems. And I think this is a great example of a system that is leading the way in that perspective. We are seeing it in other parts of the world as well. We are doing it with the Singapore government at a nationwide level where they're also using our monitoring imaging data and their digitizing pathology, then they put genomics data on top so they get to a national approach of how they can take care from, in essence, cradle to grave in a better way.
Kristen Scholer:
As we near the end of our conversation, Roy, this has been so informative, and as we look ahead to 2025, what goals and objectives is Philips prioritizing as we get ready to start the new year?
Roy Jakobs:
So for us, we remain really excited and engaged around our purpose and our vision of delivering better and more care. That is what drives us every day, and that's also what we remain focused on. That means that we need to do that in an environment and in world where you see different speeds of growth currently happening. You see the US for example, very strong. You see Europe, which has relatively slower growth. You see China struggling. All countries need healthcare, but they're operating at different pace and we need to pace ourselves to that pace of the market. But we need to be very close to ensure that actually we are best positioned to actually help the local healthcare systems, and that's what we keep on driving at.
Roy Jakobs:
So the compass of the plan remains very much intact: delivering better and more care through a focus strategy where we want to be the leader in monitoring imaging, interventional enterprise informatics, and in the home and really focusing on the best execution of our innovations. So actually, we deliver reliable support to our customers, but also push the boundaries together in very close proximity. By doing that and also ensuring that we expand our margin, as we have been doing since the beginning of the plan, we strengthen our cash position like we have been doing since the beginning of the plan. And we also address some of the challenges that we started, which we have made a lot of progress on in patient safety and quality, for example, that we keep razor-focused on, that we will not stop on, but that actually have become part of the integral practice of delivering care whilst we really focus back on innovation and the strides that AI, for example, can help further in supporting our customers in their daily practice.
Kristen Scholer:
As you, Roy, and the Philips leadership team plan for the company's long-term future, how are you ensuring that it maintains its current success and continues to be a leader in the healthcare industry a decade from now?
Roy Jakobs:
I think what the world is teaching us every day that agility is at the forefront of staying current. That means that we need to stay very close to our customers in the first place, whether it's consumers or the clinical practice. Secondly, we need to stay very close to the context that we operate in. So what are the societal trends? What are the political trends? What are the growth environments that we operate in? And we need to keep pushing the boundaries of technology and innovation. We are an innovation company. That means that we have responsibility to ensure that we show the power of technology but in a way that it can be applied in meaningful manner, meaning that it's not adding burden, but it actually takes burden out of the system, that is not adding cost, but actually it makes healthcare more affordable and actually that we make sure that we provide better access, more care to more people in a better way. That's what we are very passionate about and that's also what will ensure that we will remain meaningful now and into the future.
Kristen Scholer:
This has been such an informative conversation, Roy. Thank you. I appreciate it. And Roy, thank you so much for joining us Inside the ICE House.
Roy Jakobs:
Thank you for having me. It was a great chat and really looking forward and wish you already a great 2025.
Speaker 1:
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Speaker 1:
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