Innovator Interview: Tony

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1. Tony Tomazic Director of Consumer Innovations Humana the innovator’s interview The Innovator’s Interview highlights unique innovations from a wide range of…
  • 1. Tony Tomazic Director of Consumer Innovations Humana the innovator’s interview The Innovator’s Interview highlights unique innovations from a wide range of industries, and is an opportunity for futurethink and some of today’s leading innovations to share insights and ideas. April 2010 Anticipate. Innovate. Activate. | Future Think LLC © 2005–10 Reproduction prohibited | New York NY
  • 2. the innovator’s interview 2 Tony Tomazic the background This Innovator Interview series highlights leading innovators at Fortune 500 companies. In contrast to past interviews, focusing on a single innovation, this series examines the state of innovation at global organizations. We spoke with both innovation leaders and practitioners, within varying business units and organizational structures, across a broad range of industries both for–profit and not–for–profit. The interviews offer a unique insider’s view into the world of innovation—what makes it work, what holds organizations back, and what critical advice new innovators need to know to be more successful with innovation overall. the interview futurethink had the pleasure of speaking with Tony Tomazic, Director of Consumer Innovations for Humana Inc., one of the nation’s largest publicly traded health and supplemental benefits companies. In his leadership role in the Humana Innovation Center, Mr. Tomazic focuses on developing and implementing programs to engage consumers in their health and promote well-being. Why does this insurance company want to make you healthier and happier? And how are they building their business by encouraging politicians to ride bikes and schoolchildren to play games? Read on for Mr. Tomazic’s insights on building a successful innovation program and finding opportunities in adjacent and open innovation. What is the role of the Humana Innovation Center? Our responsibilities are to deliver solutions around designated areas of focus that will help to propel Humana into new spaces, new adjacencies, and new advantages in our core business. My job is to lead consumers towards healthier lifestyles by engaging them in their health – by connecting people with their personal motivations, interests, and causes, in order to encourage healthier behavior. I also believe that personal health is closely aligned with environmental health. Sustainability, health, and the convergence of those two spaces are areas that I’m focused on right now. What kind of innovation opportunities do you see in combining sustainability and health? We see the bike as a real icon of the convergence of personal and environmental health. Our Freewheelin bicycle sharing program, which we introduced in 2007, was inspired by models in Paris and elsewhere in Europe. We started by creating a bike sharing initiative for our own employees in Louisville, Kentucky. Each employee got a card with a magnetic stripe. Anticipate. Innovate. Activate. They’d swipe the card at a bike kiosk and the kiosk would communicate via cellular technology back to the server, validate their membership | Future Think LLC © 2005–10 Reproduction prohibited | New York NY
  • 3. the innovator’s interview 3 Tony Tomazic and open the magnetic bike lock. Employees could take a bike out and return it to any one of three kiosks in downtown Louisville. We found that our employee population really enjoyed the program. “If we want to substantially About 20 percent of them indicated that the bike program was their modify the core business and sole form of exercise. revolutionize our industry, We shared our results with the Denver mayor. He was impressed and told us, “You should introduce something like that for my city, which is the right way to do that incredibly bike friendly. And you should come out here for a party I’m having this summer called the Democratic National Convention.” is by approaching it from We ended up bringing a thousand bikes to the 2008 Democratic a very business-oriented, National Convention in Denver – and a thousand bikes to the 2008 Republican National Convention in Minneapolis-Saint Paul, Minnesota. disciplined standpoint.” We didn’t charge for the use of the bikes, but we issued Freewheelin ID cards after collecting driver’s license and credit card information just to make sure that people brought the bikes back at the end of the day. We had an incredible turnout and nearly 42,000 miles were put on the bikes across eight days. Interestingly, we were able to determine that it was primarily local residents who were using the bikes to avoid traffic. As a result, we were able to establish a business case for bike sharing by demonstrating that there was a real market for bike-sharing in both of these large communities. That business case allowed us to launch a standalone business out of Humana called B-cycle, which has a separate P&L, and in which we have a controlling interest. Its purpose is to sell bike sharing systems to communities and to campuses nationwide. Their flagship installation is taking place in Denver in spring 2010. Very interesting. So, what are the main criteria you use when choosing new ideas to move forward with? Our process includes vetting ideas both from an ROI standpoint and from a value standpoint. The word “value” is highly subjective, of course, and we have been very liberal with the interpretation of value versus ROI in years past. We have considered that the benefits of building brand and increasing consumer awareness and preference were as important as the potential for profit. That approach certainly opened doors for us. B-cycle is an example – that’s a profitable business for bike sharing that wouldn’t have been developed otherwise. However, at this point in our maturity, we are taking a much harder look at the potential for revenue as one of the main drivers. If we want to substantially modify the core business and revolutionize our industry, the right way to do that is by approaching it from a very business- oriented, disciplined standpoint. Has your approach to innovation evolved in other ways over the years? Absolutely. Our Innovation Center has changed its role to meet the needs of the organization. Ten years ago, we were thinking about what we could do besides deliver insurance solutions. The innovation question was: What can an insurance company do to benefit the bottom line besides delivering its core products? Anticipate. Innovate. Activate. | Future Think LLC © 2005–10 Reproduction prohibited | New York NY
  • 4. the innovator’s interview 4 Tony Tomazic What came out of the Innovation Center at that time were clinical programs that helped patients with disease management. For example, we launched our popular personal nurse initiative, in which specially- “Any innovative company trained nurses provide guidance to members dealing with serious conditions like diabetes and high blood pressure. Very rapidly, these must develop processes for programs became so essential to our profitability, and so important to understanding and responding our customer base that they were brought into the operational arm of the business. to consumer needs in a very Later, the Innovation Center moved on to focus on the consumer focused way. Otherwise, communications aspect of the business. We set out to make those cryptic and confusing “explanation of benefits” communications they’re just inventors, they’re from your health insurer more consumer-friendly and useful. We took the model of a 401(k) statement and created what we called not necessarily innovators.” the “Smart Summary” statement. It included everything from your spending, to your deductibles, to your discounts. It had photos of the prescriptions that you received; what the actual pills looked like - and recommendations for in-network versus out-of-network, and suggestions for generic versus branded medications. We even put in coupons so people could save money on health-related products that we thought they’d be buying. The Smart Summary statement was very successful, and it wound up being so big that it needed to become part of the operational business. And so, it moved out and we regrouped our Innovation Center again. So today, we’re taking a look at what’s next. What can we do to steer the company toward delivery of lifelong well-being? What does that mean in the eyes of the consumer, and what permission do we have to operate in that space? And how do you go about understanding that consumer perspective? Any innovative company must develop processes for understanding and responding to consumer needs in a very focused way. Otherwise, they’re just inventors, they’re not necessarily innovators. We’ve kept the consumer very close. Our goal is to meet both expressed and unexpressed needs. People don’t really enjoy thinking about healthcare or insurance. And honestly, most people don’t necessarily think about their health until problems arise. However, we discovered that you can find ways to motivate people to get healthier, by building new habits around the things that they already like to do. This approach was inspired by an eye-opening piece of research where we found that people with chronic disease conditions consider themselves to be healthier simply when they get to do the things that they enjoy. Even if you’re diagnosed with a chronic condition, if you’re able to play golf on Sundays, or play bridge with your book club, or play on the floor with your grandchildren, you consider yourself to be healthier. And that’s a very, very powerful motivator. You’ve mentioned that seeking new adjacencies is key to Humana’s innovation strategy. How do you approach this? We know our core business space and we’ve sketched boundaries Anticipate. Innovate. Activate. around it to identify adjacent opportunities linked to consumer needs. | Future Think LLC © 2005–10 Reproduction prohibited Those adjacencies drive potential solutions and they open the door to | New York NY potential partner relationships - that’s where we’re operating.
  • 5. the innovator’s interview 5 Tony Tomazic We have an interest right now in driving behavioral change in individuals by positively influencing their lifestyle choices. This is not our core business, but a healthier population obviously benefits our “We’ve seen the greatest core business, it benefits our customers, and benefits the insurance industry as a whole. results from engaging people We’re championing a direction for Humana as a health company rather in doing the things that than as a health insurance company or even a healthcare company. The focus is on fostering true well-being, which can be translated into many they already love to do and aspects of an individual’s life – physical, mental, social and financial. trying to make those things Our ability to look for adjacencies will be defined largely by how the healthier. If you approach it consumer perceives “well-being” in this broader sense. Philosophically, we’ve found that trying to influence behavior change is a tall order even from the other direction by if people are motivated. trying to induce new behavior We’ve seen the greatest results from engaging people in doing the things that they already love to do - and trying to make those things that’s “good for you,” that’s healthier. If you approach it from the other direction by trying to induce new behavior that’s “good for you,” it’s going to be a harder sell. I think going to be a harder sell.” that the health industry at large would probably benefit from adopting a similar philosophy. How do you go about making daily life activities healthier for your members? One approach is through health entertainment. For, example, we developed a program called the Horsepower Challenge, which we originally piloted in local schools in Louisville, Kentucky. Now, Louisville, Kentucky is the home of the Kentucky Derby so you have to understand that our love of horses goes pretty deep. About six weeks before the Kentucky Derby, we rolled out a game challenge to 100 middle school kids in five different schools. We gave them all wireless pedometers, with no display on them, to wear around the school and collect a baseline of their behavior. And then, a week later, we told them that they were in a competition with all the other schools in the area (some of these were cross-town rivals), in a race around the world. Each student was represented by a cartoon horse avatar and could earn virtual currency by increasing their step count every day. There was a wireless router at the entrance of the school that read their steps from their pedometers on a daily basis. As the students earned steps, they earned currency that they could use to buy accessories and accoutrements for their horse avatars. The kids loved playing the game and it motivated them to come up with all kinds of creative ways to earn more steps per day. Computer science instructors were letting the kids walk in place at their computer terminals. Kids self organized in one case and went from second place to first place by taking a shorter lunch break and doing laps around the school track. During this pilot of only about four weeks, these 100 kids took enough steps to go from Louisville, Kentucky to Anchorage, Alaska and back Anticipate. Innovate. Activate. again. Even better, they went home and walked with their families as | Future Think LLC © 2005–10 Reproduction prohibited | New York NY
  • 6. the innovator’s interview 6 Tony Tomazic well. We saw quantitative data that these kids actually increased the activity of their larger family unit as well. We started from the idea that kids like playing games already, and then created a game that was all about the kind of activity that we wanted them to undertake. It was a huge success, even as a pilot, and now we sell Horsepower Challenge to organizations. It’s the type of program that can be adapted readily, wherever you can find the natural competition that comes from team relationships – whether it’s major sports affiliations or local teams or businesses – and leverage it to motivate behavior change. Humana has a reputation for leveraging open innovation practices. What’s your approach? We actively pursue and facilitate open discussion with likeminded innovators. We focus on exploration for exploration’s sake without requiring every discussion to be a commitment to a new strategy. Our website at serves as a platform for connecting with other innovators. In fact, I want to invite all of your readers with similar philosophies for steering people towards greater health and well-being, to join the conversation. We’re always interested in talking to likeminded individuals and businesses. We can be reached through, via e-mail at or through Twitter: @CrumpleItUp. We also just had our inaugural session of the Humana Innovation Advisory Board. Our senior VP invited corporate leaders from disparate industries to visit and collaborate with us on innovative thought leadership in the space of health and well-being. These approaches to open innovation are not new, but I think they are really starting to take off. People are becoming more comfortable with talking about their business openly – not airing their dirty laundry per se, but talking about their pain points. Doing that in a very frank environment with no expectations about results leads to some fascinating discussion. Along those lines, what do you suppose makes an individual good at innovation? Ideally, I’d say a good innovator should be able to wear four hats equally well: project manager, creative consultant, entrepreneur, and advertising/ PR person. That creative spark has to come from somewhere, but you also have to have the ability to drive an idea forward and see it through a marketing lens. Otherwise, you’ll never get traction. If you don’t have all four of those skill sets, you have to get a network of people to back you up or hire or partner to get them from outside. To be good at innovation, you also have to understand that you can’t cling to the notion that your success as an innovator is going to rely on the success of one particular idea. Your success as an innovator is going to depend on how well you execute your work, but ultimately it may not be that particular idea that succeeds. And you need to be prepared for that. Anticipate. Innovate. Activate. | Future Think LLC © 2005–10 Reproduction prohibited | New York NY
  • 7. the innovator’s interview 7 Tony Tomazic What do you think is the single biggest challenge to making innovation happen? I don’t believe that innovation can easily emerge without an environment “A good innovator should be to support it. Look at startup companies: they make innovation part of able to wear four hats well: their identity. They must embrace that disruptive and creative potential of innovation in order to be able to change the status quo. As a company Project Manager, Creative gets bigger, it’s harder to maintain that kind of environment. Consultant, Entrepreneur, Everybody wants to improve their bottom line, but it’s not lip service that’s going to get you there. You actually have to be willing embrace innovative and Advertising/PR person.” ideas when they emerge and that’s not always going to be comfortable. What do you think the role of an innovation team or innovation office should be? I believe that the key is to create a collaborative relationship between the innovation team and the rest of the organization so that innovation becomes infused in all business areas. Then you can leverage innovation specialists and their expertise to help other departments bring great concepts to life. I think that’s probably the best success model you’re going to find in a large corporate environment. There is some danger in placing the responsibility for innovation in a single department. That structure can lead to difficulty establishing a pipeline between innovation and the rest of the business. Business segment leaders have their own responsibility for strategy and budgets and deliverables. Getting them to accept new things to manage with the same resources – without a measure of ownership of those new innovations from the beginning – is going to be a challenge. However, if you can make innovation team members available to those business owners to support them, and innovation support is that team’s responsibility, then the things that you collaborate on together become jointly owned. What would you say is the number one indicator of a healthy innovation program? In a healthy innovation program, you see the best ideas move forward at the expense of those ideas that objectively don’t stack up. When pet projects survive and bad ideas continue to get funding, there’s a problem. Healthy innovation requires people to see that their ideas are not their children, even though it may feel like it sometimes. You must be willing to shelve hard work and change direction if success lies elsewhere. If the Humana CEO were to come to you tomorrow requesting a progress report on innovation, what three metrics would you report on and why? I’d give him an update on: 1) The number of concepts that are currently in our prototyping pipeline; 2) The value of our innovation products this year; and 3) A picture of our current budget snapshot. I think that that would be enough for him to understand our progress Anticipate. Innovate. Activate. and whether or not things were on track. | Future Think LLC © 2005–10 Reproduction prohibited | New York NY
  • 8. the innovator’s interview 8 Tony Tomazic I do think that those key innovation metrics change over time. I don’t believe that you can cling to the same metrics any more than you can limit yourself to the same innovation pr
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