Here is an innovation interview with Tony Tomazic of Humana (Director of Consumer Innovations) about innovation and insights at Humana.

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.
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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
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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.
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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.
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Those adjacencies drive potential solutions and they open the door to |
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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.
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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 www.crumpleitup.com 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 www.crumpleitup.com, via e-mail at crumpleitup@gmail.com
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.
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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.
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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 practices over time.
What are some ‘quick win’ suggestions you’d give to other innovators
who are trying to get momentum around innovation?
If I was starting a new program and trying to get some early traction
within an organization that hadn’t experienced innovative practice
before, I would seek out a business owner with some pain points in
their responsibility area, get a cost figure associated with those pain
points, and then partner with the business owner to find solutions and
demonstrate how innovation can benefit the organization.
What other advice would you offer to organizations trying to build
innovation efforts, especially given our current economic environment?
You have to keep your faith. You have to be a believer in what you’re
doing if you’re going to ask anyone else to believe.
You also have to make sure that you have the experience and the know-
how to ask yourself the hard questions. If the idea stands up to your
own scrutiny, then you ought to be able to stand up for the idea. And if
you can pick it apart, then it’s probably not strong enough to back up;
you need to return to the drawing board.
There will always be people willing to naysay or play the devil’s advocate
– and there ought to be. There is value in being challenged. The
challenges can make the idea better than it was. You must be able to
shape it, craft it and sharpen it. But, if you don’t have someone who
believes in the potential of what the idea could be, then it’s just not
going to take off.
Here’s the dilemma: You have to be practical and keep your eye on
what your business actually is. At the same time, you can’t be too
practical. If you put the blinders on too tight, then you’re going to miss
opportunities to step outside the status quo. You’re never going to jump
the curb if you stay in your own lane.
Anticipate. Innovate. Activate.
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9. the innovator’s interview 9
Tony Tomazic
What can you learn from Tony Tomazic and Humana’s approach to innovation?
• Adjacent Innovation: Do you look for innovation opportunities in markets adjacent to your core
business space? How can you look beyond traditional business boundaries?
• Open Innovation: Do you actively seek out discussion and collaboration with likeminded innovators?
How can you open up your processes?
• Embracing Change: Has your innovation program evolved to meet changing business needs? How
can you become more nimble?
• Changing Behavior: Could you drive results through influencing behavior? How can you motivate
customers or employees to make a shift?
To learn more about the research, tools and training you need to better innovate, visit us at getfuturethink.com.
Anticipate. Innovate. Activate.
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