Diane Brady Forbes Staff Assistant Managing Editor Following Jan 11, 2024, 01:56am EST Click to save this article. You’ll be asked to sign into your Forbes account. Got it Share to Facebook Share to Twitter Share to Linkedin Named CEO amid a costly product recall and challenges in China, Roy Jakobs spent his first year bringing the healthtech company back to health By Diane Brady , Forbes Staff W hen Roy Jakobs became president and CEO of Royal Philips—or Koninklijke Philips N.
V. as it’s known in the Netherlands, there wasn’t much cause to celebrate. The Dutch conglomerate had posted losses after a massive recall of breathing devices and other challenges dampened sales and investor enthusiasm.
That prompted Jakobs to cut thousands of jobs soon after stepping up in October of 2022. He approved a deal to settle economic loss claims related to the recall for about $429 million the following year. While Jakobs continues to deal with a decline in orders and other challenges, including a recall last month of some 150 MRI scanners at risk of exploding, he’s had success in turning the 133-year-old company around.
Comparable sales for Royal Philips were up 11% in the third quarter to €4. 5 billion, or roughly $5 billion, and the company made €224 million in income from operations after losing more than €1. 5 billion a year earlier.
Having cut jobs and streamlined the organization, he’s focused on accelerating the company’s growth in tech, from informatics and image-guided therapy to personal care. He’s excited by the potential of AI to not only improve his products but also expand access to more people, especially in underserved areas. Then again, few shifts are easy in healthcare.
“We need to think about systemic change in healthcare but it’s a complex ecosystem of different players,” says Jakobs. To change it requires not just new technologies, he argues, but also clinical practices that are willing to adopt those technologies, the financing to support them, and a regulatory framework that promotes protection, innovation and access. “I don’t think we get better in the world by forcing people to take sides” Roy Jakobs When it comes to other challenges like geopolitical tensions and sluggish demand in the all-important market of China, Jakobs takes the long view.
“In 2022, more than 60% of global IP came out of China,” he says. “The economy is under pressure. But they were the manufacturing hub of the world and want to now become the innovation hub of the world so they’re massively shifting into that.
” As a global player in manufacturing life-saving equipment, he says companies like Philips have to cater to customers across a range of geographies and regimes. “I don’t think we get better in the world by forcing people to take sides,” he says. “Diversity and inclusion are massively enriching.
Within a company, you need those different perspectives. ” The first principle, of course, is to do no harm. For more on how Jakobs is dealing with the a tough global environment, product challenges and the potential perils of too much democracy in his own company, click on the video above.
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URL: https://www.forbes.com/sites/dianebrady/2024/01/11/philips-ceo-is-feeling-better-about-his-company/
