E55: Jody Holtzman, SVP of Market Innovation at AARP – Interview

September 8, 2016


This interview is with the SVP of Market Innovation at AARP, Jody Holtzman. Some people wouldn’t expect AARP to be innovative, but they are. Jody has a fascinating role at AARP. He thinks about and implements innovative programs to help people ages 50 and over, now and in the future. That’s a tall order and a very meaningful mission.

I invited Jody on the show to tell us more about his views on innovation and what he’s doing at AARP. I think you’ll be surprised how innovative AARP really is.

Here are some other things we talk about:

-What innovations are you most excited about? Why?
-Can you tell us about the Longevity Economy?
-What’s your role as head of innovation at AARP? Do you work on innovation internally and externally with third parties?
-How do you work with startups?


David Kruse: Hey everyone. Welcome to another episode of Flyover Labs and today we are lucky enough to have Jody Holtzman with us. And Jody is the Senior Vice President of Marketing Innovation at AARP. So essentially Jody is thinking about technology and innovation and how these can help people ages 50 and over now and in the future. So that’s sounds like a pretty big tall order to me. So I invited Steve on the show to tell us more about his views on innovation and what he is doing at AARP. And I think we’ll all be surprised how innovative AARP really is. So Jody, thanks for joining us today.

Jody Holtzman: Well, my pleasure.

David Kruse: And so before we start talking about what you are doing at AARP, could you give us a little bit about your background, so we get to know you better?

Jody Holtzman: Sure. Well I’ve been at AARP for just 11 years this month. And actually was originally brought in to create the first Competitive Inelegance Group at AARP. Then I ran the research group, and then about six years ago I created this job whose goal it is to spark innovation in the market that will benefit people over 50. I came to AARP after a 20 year career in strategy consulting of various types. I was the Director of Strategy at PWC and Coopers & Lybrand before that. I was the VP of Consulting at FutureBrand. I was a Futurist with the Nesbitt group going back to the days of John Naisbitt and Megatrends. So a very eclectic career given that I’ve ended up in the field of aging, but it’s kind of tied together, both broad trend work as well as this background and skill set with regard to strategy.

David Kruse: Yes. It sounds like you have an ideal background for what you are doing now. What attracted you to AARP?

Jody Holtzman: Well, there’s a couple of things. One, just the practical was I was consulting at the time and I was really just getting tired of the consulting slot, and – but I was looking for opportunities where I was going to learn, opportunities to work with a great brand and increasingly, you know opportunities to work with companies that had a purpose and a mission, that really had the potential to change the world for the better. And all of that seemed to come together with AARP and I never before that would have thought about pursuing a career you know around aging specifically, but it was fortuitous and you know it’s been a great ride.

David Kruse: And I’m curious, you have a great background in strategy and you are called a futurist. I want to be called a futurist sometime; that’s a pretty sweet title. But from your background, those 20 years, what was one or two things that you’ve learned that have really helped you with what you are doing now. And maybe it’s hard to distill one or two things, but yeah, I’m curious if there is any lessons there?

Jody Holtzman: Yes, well I think there is several things that came out of that experience. You know one is to understand that organizations are presented with opportunities that are – that have both an external and an internal aspect to them. So the external is about the market landscape and all the factors that shape it and you as an organization having something unique and differentiated that allows you to gain advantage in that market, and that could be technology, it could be an understanding of the customer, it could be that you identified a problem and a solution that’s unique; many, many different opportunities. Internally the opportunity is to really grow and develop new competencies and skill set and capacity. That perhaps was not on the radar. And the companies that are in both cases are able to leverage those opportunities are the ones that are going to succeed. You know strategy is about three questions; what are you going to sell? Who are you going to sell it too? And why should anybody buy it from you and not the other guy? And the third question is really the most important and it’s really a dynamic question and that involves three different players, right. Why should anybody, the customer buy from you versus the other guy the competition? And you need to understand, you have to grasp the potential to use the lens of the customer to understand your competition and yourself and you have to use the lens of the competition to understand your customer and yourself. And within that the key is what is it that’s differentiated? What makes you stand apart with regard to the value that you deliver to the customer? Because at the end of the day there is only one asset that a company has that’s really of any importance and that’s the customer.

David Kruse: True, that’s quite helpful and so let’s talk a little bit about AARP and maybe expand on what you just talked about there, because that was interesting. But could you just give a brief overview – well, you guys do a lot, but if you can give a brief overview on AARP and kind of your roles ahead on innovation there?

Jody Holtzman: Sure. Well AARP was started in 1958 by a social entrepreneur name Ethel Percy Andrus. She was the first woman high school principal in the State of California going back to 1935 I believe. And after she retired she saw kind of the challenges that retired people had and remember, this is while there was social security, these are the days before Medicare and Medicate. So people did not have easy access to health insurance. And so she started the organization really with a focus on trying to make available to older people health insurance. And she approached every carrier that was out there, and with the exception of one that she eventually found, everybody turned her down. And what happened was that as it often happens in new markets or emerging markets, it takes somebody who is willing to bear the risk to also see the potential for the game and what happened was not only did she find somebody to make health insurance available to older people, but she proved that the market was quiet, you know quite worthy. And once that happened, others started you know jumping into the market and then after the creation of Medicare or other opportunities with Medicare, supplemental health insurance and others. In any case AARP evolved to become a non-profit organization that looks after the interest of people over 50 and the mission of the organization is to improve the quality of life for all as we age. Now government has a role to play in the benefits that once gets through social security, Medicare, Medicaid, non-profit organizations like AARP and many, many others have a role to play in improving the quality of life. But the private sector also has a role to play, and that we buy products and services to make our quality of life better. The challenge that I saw when we created this function, this group of ours, this market innovation group, was that the private sector in many ways really did not understand the potential that people over 50 presented for them individual and broadly. And so it was our job, to figure out how do we build market awareness? How do we build an ecosystem that would nurture innovative companies that deserve this audience? How could we put a spot light on technology that we thought was putting a spot light on that we wanted people to know about? And how could we put the customer, the consumer at the center of innovation? So as a membership organization AARP has 38 million members. There is roughly about 110 million, 105 million to 110 million people in the United States over 50 and 38 million of them are members of AARP. And so that right there shows you some of the potential and what you really have is this challenge and that the basic narrative around older people is one focused on cost and financial burden. My sound bite is that its only in Washington we are serving the needs of over 100 million people; it’s called an unaffordable cost and financial burden, and the private sector serving the needs of over 100 million people is called an opportunity. And depending on which door you walk through and the conversation you have, whether it’s a conversation based on opportunity or its conversation based on unaffordable cost and financial burden, it’s a completely different conversation and it’s the opportunity conversation that does not happen enough and it’s the opportunity conversation that we are trying to generate.

David Kruse: Interesting. That’s a great overview, thank you. And so I’m curious to know, you talked about the – you were talking about your strategy background and knowing your competitor. So from that perspective that you just described, you know who would be even be your competitor? I mean it sounds, from my perspective it sounds like more of you, which is great. So you are trying to work with a variety of companies, whether its startups or larger organizations to awareness to this older population. Yeah, so do you think you have competitors?

Jody Holtzman: Well you know AARP had many competitors. We don’t have a competitor that is a mirror image of AARP. But competition is not about mirror image, competition is about substitutes and if you go back and you read Michael Porter’s earliest work and looking at his theory of the Five Forces and what not, it’s about substitutes. So if you use that lens, we compete with all sorts of substitutes. We compete with for people’s time to volunteer, we compete for eyeballs on our – in our pubs and our website, we compete for donations to our foundation which serves the interest of low income people over 50. We compete for you purchasing an insurance product that has the AARP brand on it or you buy the competitors’ insurance product that has their brand on it. We also compete with the decision not to, the decision to join or not to join. So you have to have an expansive view of what competition is to really understand the competitive landscape. There are players out there that compete in some ways and in others they don’t, but it’s a market that is growing so significantly that it really is also right for Co-opetition. So if you go back to Barry Nalebuff’s original book Co-opetition, conditions in which it works is when you have growing markets, because then you can even keep your own share of the market and still you know grow significantly if the underlying market is growing. So again, it all depends on how you look at it.

David Kruse: Very true and so when you think about and work on innovation, do you work on projects internally or externally. And can you – and if it’s both, kind of give examples of how you are working on innovation all these years?

Jody Holtzman: Yes, we do both. On the one hand we are trying to spark innovation externally. But we are also as an organization trying to be more innovative and to develop a culture for innovation, which for any large established organization is a challenge, because you’ve already grown up, you have grown up with a particular culture, certain ways of doing things, processes, etcetera, and the fact is that large organizations require processes that a startup doesn’t. There is just so much more at risk, you have to be very often more risk averse and finding that balance where you can de-risk averse to protect the assets that you have and at the same time spark innovation internally and allow risk taking, that’s a very difficult balance, and every larger organization for profit, non-profit has that challenge and it goes back to you know the descriptions or diagnosis that goes back to Clay Christensen and the innovators dilemma. And that dilemma is you know how do you protect your cash cows and at the same time invest in what are currently small markets but are likely to become the big markets. So that’s always a challenge. So when we are focused externally, that is our – as I said that’s our primary focus, but we are also looking for those opportunities to bring startups internally, to bring new ways of thinking, to bring them back internally. So my groups success is both dependant on external opportunities as well as internal.

David Kruse: And how do you bring in a start up internally just by partnering with them and giving them resources and access to maybe members or how are those…?

Jody Holtzman: Well its – yeah so we are the point now where we are still not every good at it, and what the progress is, is that we are now aware that we have to be comfortable at it. And so we’ve, if you talk to startups what’s it like to work with AARP, you will not get you know for the most part a positive readout and its going to take us some time to figure it out. But what it requires is for us to start to think about what do we have to do to be a partner of choice and how do we take friction out of the relationship? How do we enable startups to get through what is really a maze of departments and I mean we are a large organization right. How do you insure that a startup has a sharper whose job it is to hold their hand and decide and you know when and under what circumstances to make introductions in different departments and to be there when you know, when there is a need? So we are still working on all this, but as I said a breakthrough, you know historical breakthrough is that we are at a point now where the organization realizes that for the most part if AARP is going to make available to our members increasingly innovative products and services, that much of that innovation is going to come from the outside and therefore we have to figure out the ways to work with the innovators.

David Kruse: Interesting, and I bet you had a bit of hand in that since you’ve been part of, Head of the Innovation team for six years. That’s not easy to turn a ship around like that or change direction a little bit.

Jody Holtzman: No, it isn’t and you know I addition to me there are many others who also see that need starting with our CEO who’s been in the role for about a year and a half or so, almost 2 years actually. And so having that support from the top is important, but are we finished turning the ship around, not quite yet.

David Kruse: Fair enough. And I’m curious for like an internal project, do you have an example of a project that started just as a basic idea and then slowly gained momentum and you actually rolled it out, you know even if it’s in a smaller market and then if you do, kind of like your thought process along the way, how to nurture that idea and eventually bring it to market.

Jody Holtzman: Well, we are starting to experiment with a couple of things. One is, we’ve got several pilots going with existing startup companies in the Caregiving space and the Telehealth space and we are trying to see how interested are our members and the products and services that these types of companies provide. At the same time we are starting to do co-creation with our members and will be doing more of it with other start-ups or entrepreneurs who you know seem to have a carnal of an idea that we think is a good one, but that’s you know still TBD, but it’s on the agenda. We are now, we recently created a workspace we call The Hatchery which is like an innovation lab and our just hiring somebody new SVP to run that, who has an incubator background and experience creating products and services with this outside entities, that’s going to be taking off this month, so a lot of activity going on. I would say are there huge successes, no they are pretty small, but they are demonstrable right, and so identifying ways to bring our members in to The Hatchery to participate in co-creation activities, that’s all new and has to a degree that its going forward has been success. But that we are going to have to figure out ways to do even more of that.

David Kruse: Yeah, I mean you have such a wonderful, almost ecosystem to tests out new ideas. I mean you can’t, I guess over expose or sell your members, but at the same time 38 million members is a – that’s a pretty good testing platform for a new ideas, and of course you are not going to approach all of them, but yeah, you got such good resources for startups or for your incubator.

Jody Holtzman: Well, right, exactly and I mean one of the great successes we’ve had is a demo day that we do, we’ve done it five times. It’s called Health Innovation at 50 Plus, Live Pitch and we’ve had over 800 companies apply over the five events. But we only put 10 on stage at a time, so we’ve only had 50 finalist and our demo day though is different than others right. In addition to willing to step back, what we have in common with other demo days, is we have a panel of judges who are comprised on venture capitalist, entrepreneurs get on stage, give there pitch and the venture capitalists judge. But we do something in addition to that by bringing in AARP members as part of the audience and we give them wireless voting devices and after the entrepreneurs have pitched to the VCs, they also get voted on by the consumer and so we at the end of the day have a judges winner and a consumer choice winner. And in the process the entrepreneurs are getting real time market feedback from the consumer. And what we have been told is that feedback is really invaluable, because the company really don’t have enough time or money to conduct that kind of research.

David Kruse: Interesting, and how do you decide to work with a particular startup? I mean I’m sure there is many startups that would be interested, any particular approach by – well 800 with at least with this pitch completion, but in the end how do you go through and figure out, let’s give this company a shot and…

Jody Holtzman: Well yeah, the companies that you know we are currently doing pilots with are companies that have – they are really not quite growth stage companies, they are still early stage, but they are that point where they’ve raised at least one if not two rounds of investment; they have started to you know generated revenue; they have started to prove their concept or their product, they started to obtain some traction in the market place and just like as an investor the team has to be good, the CEO has to be good and so there is a due diligence process and it’s also we get to see so many that we, you know the good ones stand out. I mean that’s just always the case.

David Kruse: Yeah, well that makes sense, okay. And I’m curious, what innovations or technologies are you especially excited about. And there is probably a lot, because you are an innovation guy but if you had to pick two or three is there …

Jody Holtzman: Yeah, so I mean there are a lot of great companies that are out there, that are already you know doing things. Companies like CareLink, which is an online market for finding a family caregiver. Others in that space are Hometeam or Honor. You know there are certainly companies in the Telehealth space like Teladoc and others and each of those companies are kind of focused on a specific use case in a problem set and finding a point solution for that. I actually think though that the future of all of this and it will be relevant for people across the age continuum, not limited to just older people, that the future is really going to be opened up by the application of underlying technologies like voice recognition and voice command. So when I see products like the Amazon Echo and Elisa, that’s where I see you know the really the great potential, because that is going to – once everything gets to voice command, it really takes the friction out of so much. Once you get to a point where you don’t have to do something to sync a device with your computer, it just does it automatically, which is totally possible today, but for some reason, for a business reason because it’s too expenses or whatever it doesn’t happen. When more of that happens and again it takes the friction out of things. When design is such that you know in the best of the human center design tradition that the more challenged users are the ones who are in the forefront of the syncing of those designing those products, you are going to end up with products that are easier to use across the age continuum, right. Having a something with a black background and a 2.0 font black type phase and a tiny black button is nether good for an older person or for a younger person. So I think the key to the future is a combination of both human centered design and also underlying technologies that literally makes things plug and play and remove the friction out of the user experience.

David Kruse: You know the Amazon Echo, that’s an interesting you brought up. I mean do you have example of how a senior might be enabled or empowered or might be helped by kind of new application feature using Amazon Echo. I’m kind of putting you on the sport here but, yeah can you think of anything.

Jody Holtzman: Yeah, listen I need to just – somebody is knocking on my door.

David Kruse: No, that’s fine, no problem.

Jody Holtzman: Well, they seemed to move on. Anyway yeah, I mean to me the starting point always is StarTrack and so when somebody can just you know call into the air and say computer, get my daughter on the screen or my doctor or my nurse or my friend down the block, you know that is just going to allow a level of connectedness that is just more tedious and difficult you know at this point. When you can also just you know say into the air, you know start the stove and make sure that it shut off when it reaches a certain temperature or starts to boil or whatever or after a certain amount of time, again you know all of the – what you are going to see is this combination of underlying technologies like voice recognition combined with the internet of things, combined with the internet of healthy things with remote monitoring of vital sign, remote monitoring of the environment to make sure that you know falls are prevented, things like that as well as enabling you know the connectedness with friends, community and family.

David Kruse: Interesting. I like that vision, especially since it starts with StarTrack, that’s an important, I like it.

Jody Holtzman: Well – you know when the first Bluetooth communicator was ever shown.

David Kruse: No, when?

Jody Holtzman: 1965, on the deck on the enterprise, lieutenant Uhura was the communications officer and she – they didn’t call it Bluetooth, they didn’t call it wireless, but that’s what it was. And she had this gismo that was in her ear and visually very obvious and that was the communicator.

David Kruse: Wow, interesting. Interesting. All right well, I did not know that. So I think we are getting to the end of the interview unfortunately. I got one more question that sometimes I like to ask guests and I’m curious, because you’ve had a pretty interesting career and it essentially is what have you learnt from your mistakes in the past or is there one mistake or type of failure. I mean of course failures, it’s how you look at it, but is there a good lesson that you have for the audience that you have learnt from the past.

Jody Holtzman: Yeah, I would say that, you know I’ve certainly had my share of failures like everybody else. I would say two things I’ve learned: one is you know ask forgiveness not permission, and the other is to also not wait to be asked. Identify a problem, and take the rein. Most people do not have an idea of what a solution looks like for a problem that they’ve never experienced and if you have a perspective on that, it’s really incumbent on you to just experiment and to just put a stake in the ground and then start to see what the reactions are. And hopefully you do that repeatedly you are going to win more times than you lose and every time you do loose you are going to make better mistakes the next time.

David Kruse: And that’s a good way to end it, and that’s why as you said earlier, its why appreciating innovation at AARP is so important because you can embrace that failure I suppose instead of being scared that you are going to be yelled at for taking a little risk and not having things work out.

Jody Holtzman: Exactly.

David Kruse: Great. Well, like I said, this is a great way to end and Jody, I really appreciate your time and you’ve got some great experience and I love what you’re doing, making the lives better for older folks and which will be me before I know it and so I really appreciate it and thanks everyone for listening to another episode of Flyover Labs and everyone have a good day and thanks again Jody.

Jody Holtzman: Thanks very much. Take care.