How AARP is Pivoting Innovation in 2020 and Investing in Startups

By Kaitlin Milliken |  June 26, 2020

At InnoLead’s recent online event for nonprofits, Andy Miller of AARP discussed how his team helps foster an innovative culture that permeates the organization. He also offered insight into how the team has pivoted its innovation priorities, and the ways it is co-creating products with startups.

Formerly the American Association of Retired Persons, AARP is a nonprofit interest group that focuses on aging. Some of the organization’s activities include lobbying for issues affecting older adults, running retiree-centric charities, and providing discounts for association members. In 2018, the organization brought in $1.6 billion in annual revenue, making it one of the biggest nonprofits in the US by that marker.

Miller is the Senior Vice President of Innovation and Product Development at AARP Innovation Labs. His team creates new revenue-generating, social mission-focused offerings both by working on projects internally and in collaboration with startups.

How Training Can Build an Innovative Culture

When Miller started at AARP, he says, the organization offered human-centered design courses to employees. According to Miller, “just about every employee had gone through” the training program. The organization also offered a curriculum called iCivics that focused on civic engagement.

To further create an innovative culture, Miller says his team started AARP’s Champions Program. Of the organization’s 2400 employees, 10 percent have gone through this program. “The champions have received additional levels of training. And they’re also back in their units,” Miller says. “They act as an extension of the Innovation Lab.” With limited resources, the innovation team is not able to host design thinking sessions regularly throughout the company. But the champions, Miller says, can guide those sessions.

“[The program] infuses that empowerment — that cultural mind shift — and how innovation should work throughout the organization,” Miller says.

Pivoting Innovation at AARP

AARP’s lab, the Hatchery, is located in Washington, DC. The 10,000-square-foot space was created to see if AARP could create its own products and services, Miller says.

“We imagined a 20-something person team…really healthy, sizable budget, and we were trying to look at ROI just like everyone else,” Miller says. “Turns out that while we’re really good in the product group of going from an idea to an MVP to revenue, we were really, really bad as an organization of taking that thing we built, and nurturing it into a business, and scaling it.”

In order to play to the team’s strengths, Miller says the team is pivoting their focus. Instead of building new products, the team will double down on investments in the startup world. “So…almost every startup [that works with us]…will get a $25,000 investment right up front from us,” Miller says.

According to Miller, the team will also use investment paperwork that is very startup-friendly. There will also be two tracks startups can follow. The first track, he says, focuses on mentorship, and helping startups validate their ideas.

“The other path is the twist… We’re going to call this the startup co-creation path,” Miller says. In this model, AARP’s innovation team will help build new products with startups. The startups will then own the product, and AARP will make a larger investment in the company as a long-term bet.