Source: Business Week, Innovation, November 11, 2009, 11:50AM EST text size: TT

 

LifeTuner: How AARP Came to Serve Twentysomethings

Diane Ty spent years at the over-50 organization developing a Web community for younger Americans. After much strategizing, AARP has launched LifeTuner

By Jessie Scanlon

On Oct. 27, AARP, an organization founded to promote the needs of 50-and-older Americans, turned youthful, unveiling a financial planning Web site and online community designed for 25-to-34-year-olds. Visitors to the free LifeTuner site can post questions, find advice from financial experts, and use tools to manage their credit-card debt or plan for retirement.

More than just a surprising offering from a well-known organization, LifeTuner shows that innovation is even possible within a cautious, tradition-bound group that itself is more than a half-century old. The key is to sell innovative projects internally, getting the right people on-board early, and navigating around potential roadblocks. That's what Diane Ty, AARP senior vice-president for strategic market development and a former American Express (AXP) executive, did as she led LifeTuner from concept to launch.

Taking LifeTuner as a guide, here's a look at how to navigate the organizational tides that too often sink innovative projects.

Ty, who will only say that she is fortysomething, joined AARP as a consultant in 2004. The following summer she was part of the association's "innovation strike force," a five-member team charged with reviewing social trends and advising the board of the 40-million-member group about future initiatives. "We talked about what, if anything, we could do for people under 50," says Ty, but "Project Prepare," as the team called the effort at the time, didn't make it into the top three priorities presented to the board by the strike force.

Needed: direct access to AARP's CEO

The notion got a second chance at the end of 2006, after Andy Stern, president of the Service Employees International Union (SEIU), expressed interest in working with the AARP on an initiative aimed at young workers. (The two organizations have common interests in health care and financial security.) The SEIU ended up creating its own nonprofit, Qvisory.org, but Ty says "the discussions helped move things along inside of AARP."

She knew that for the project to be successful, she needed to report directly to then-CEO William Novelli, cutting out the layers of management that can stymie an innovative project. "So that's when I joined the staff as senior vice-president," Ty says. Next she assembled a cross-functional team, bringing in people from strategic planning, health care, economic security, and other groups within AARP that she knew would provide the necessary sounding boards and buy-ins for the project.

Beyond that, says Ty, she tried to "fly under the radar." As the project evolved, she reached out individually to colleagues whose interests aligned with LifeTuner in one way or another. Over lunch, for instance, she told the woman behind Create the Good, AARP's campaign to encourage members to volunteer, about how financial planning professionals were offering free advice on LifeTuner.

It took Ty 18 months to build her case to the 23-member board, but in December 2007, she won them over—even getting votes from members who had argued for a stricter focus on the issues of its 50-and-older members and who perceived the problems of twentysomethings as a distraction. Ty's case for LifeTuner included quantitative data from a member survey that showed, among other things, that 69% of AARP's members were still supporting adult children—proving that LifeTuner did address members' need.

Barry Rand, who took over as CEO last April, says Ty's data made his decision to stick with the LifeTuner project "very easy." "We are first and foremost a member-driven organization," he says, "and this project fulfilled a real need."

Hiring freeze led Ty to outsource

Ty also drew on ethnographic research, including video of young adults using a LifeTuner prototype. (Robert Fabricant, creative vice-president of creative at Frog Design, also stresses the power of ethnographies: "I've never walked into a boardroom, thrown down a story with a powerful anecdote, and not had the executives latch onto it," he says.)

Even after winning board approval, Ty faced hurdles. For starters, a hiring freeze prevented her from staffing up the project. After crunching numbers, Ty was able to prove that by outsourcing the project, she could cut costs by 12.5% in 2008 and a further 5% in 2009. In July 2008, she hired First 30 Services, a San Francisco-based consultancy focused on startups; First 30 hired all the subcontractors, scaling the project team up and down as needed.

Outsourcing did more than save money: It freed Ty's team from AARP's sometimes cumbersome development processes, its "meetings culture," office politics, and the ideas that over the years become deeply rooted within organizations as to how things must be done. Ty attended the meetings and ran interference.

More than three years after Ty took on the project, LifeTuner finally launched. "In the first two days, we exceeded all of our traffic expectations," says Ty, adding that daily traffic since Oct. 27 has been exceeding the total traffic over the six month-period between its soft launch in early May and the public launch last month. (AARP won't reveal specific traffic numbers, nor will it say how much it invested in the LifeTuner project.) It's still early for LifeTuner and Ty knows that if AARP underfunds the site, it might not thrive. But for an organization in which innovation has struggled to take root, LifeTuner's debut is a significant achievement.

What can executives learn from AARP's LifeTuner?

Cut out the middle man. Side step as much hierarchy as possible. For Ty, reporting directly to the CEO immediately increased LifeTuner's chance of survival.

Fly under the radar. Limited resources or differing ideas about what an organization should be focusing on can lead coworkers to sabotage a project. Sometimes the fewer people who know about a project, the safer it is.

Build support. Your core team needs to include voices from across the organization, both to win allies and to avoid potential problems down the road. In addition, work informally with people from other teams when you see overlapping interests.

Work remotely. Many an innovative project has been downed by the politics, bureaucracy, and culture of an organization, as the predecessor to Lockheed Martin (LMT) knew when it created its renowned Skunk Works in 1943.

Jessie Scanlon is the senior writer for Innovation & Design at BusinessWeek, where she covers the intersection of design and business

Source: Business Week, Innovation, November 11, 2009, 11:50AM EST text size: TT