Philips: Philanthropy by Design

How Philips, working with nonprofits, is tackling the low-tech needs of the world's poor

By Kerry Capell and Nandini Lakshman

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Philips designed an improved chula stove used in rural India NAMAS BHOJANI

For decades, Nirmala Shivdas Kshirsagar prepared family meals on a chula, a wood-burning oven made from mud. The stove cost little to operate, but the 45-year-old village schoolteacher paid a price: Unruly flames frequently burned Kshirsagar's hands and feet, and smoke filled her three-room home, making breathing difficult and leaving a sooty mess on the kitchen's mud-plastered walls. It's a common problem: The U.N. estimates that smoke inhalation from indoor wood stoves kills 1.6 million people worldwide each year.

So when an Indian development organization last year asked if Kshirsagar wanted to try an improved chula developed in conjunction with the Amsterdam-based electronics giant, Royal Philips Electronics (PHG), she agreed. One year later, Kshirsagar says she loves the stove. She's breathing more easily, and her spartan home is cleaner. "The chula is so much safer and I don't burn my feet," says Kshirsagar, who lives 130 miles south of Mumbai in the village of Sewree.

Conventional chulas use a single length of pipe as a chimney and can only be cleaned by climbing up on the roof. The model designed by Philips has a three-part chimney that can be dismantled and cleaned, making it easier to keep it clear. And cooking pots fit snugly into a hole above the fire, which helps direct the smoke up the chimney and keeps it from seeping into the room. Fuel—wood or manure—is relatively inexpensive, about $5 a month. That's key for Kshirsagar: With her husband out of work, she supports her family of five on the $90 a month she earns from teaching.

Sewree and places like it don't typically hit the radar of multinationals. And low-tech products such as the chula are far removed from the sophisticated medical gear, high-end home entertainment systems, and nifty gadgets that Philips is known for. But the chula and a handful of similar projects are a key part of Philips' effort to help its designers gain insights into the growth regions of the future. That they boost the company's reputation for social responsibility and give it a foothold in new markets doesn't hurt, either. "We must create a design strategy that will improve the quality of life in both the developed and developing world," says Stefano Marzano, chief executive of Philips Design.

The chula and projects like it are still relatively small-scale. But they are emblematic of Philips' effort to transform itself from a high-volume electronics maker into a design-led health, lifestyle, and technology company. With innovations easily copied and competition from low-cost Asian producers fierce, Philips understands it is no longer enough to crank out great products. What it's aiming for is social innovation, or engaging with nontraditional partners to develop culturally relevant solutions. And it is here that design is helping bridge the gap between technology and people. "There is no single player that can address the major global challenges society faces today," says Josephine Green, senior director for trends and strategy at Philips. "Instead, you need to bring together numerous partners, including the users themselves, to co-create social innovation."

For Philips, the success of projects like the chula isn't measured in profits. Indeed, Marzano refers to such initiatives as "philanthropy by design." But by developing sustainable solutions, the company can deepen its knowledge of robust emerging markets and experiment with new business models. "Emerging-market economies are collectively rich but individually poor," says Rama Bijapurkar, a market strategy consultant based in Mumbai. In India, she says, the estimated 600 million people who earn less than $2 per day account for one-third of India's economy. "If companies do not address them, they cannot take full advantage of these markets."

"NO HIDDEN AGENDA"

Philips designers regularly get feedback from Kshirsagar and the 450 or so other families using the chula. "You can't just use the traditional transactional model of, 'You sell and they pay,' "