4

THE THREE PROCESSES OF INNOVATING

CREATION, INTEGRATION, REFRAMING

So far in this book, I’ve explained why your organization needs to operate simultaneously in two ways—as an execution engine and as an innovating engine. The execution engine serves your existing customers with products and services that meet their current needs as best as possible, while the innovating engine prepares you to serve the emerging needs of those customers as well as the needs of customers you do not yet know. The execution engine is about your company’s present, while the innovating engine is about its future. And while these two engines do different things and operate in different ways, they should not be made up of separate teams unconnected to one another. In fact, everyone in your organization should contribute to the work of both engines. This is the best way to ensure that both the execution engine and the innovating engine will have access to the finest talents, ideas, energies, and other resources your organization has to offer.

In addition, I’ve shown that one key distinction between the execution engine and the innovating engine is the point-of-view characteristic of each. In most organizations, the execution engine tends to have an inside-out, company-centric perspective, focused on managing internal processes as efficiently, accurately, and profitably as possible. Your innovating engine should purposefully adopt a different perspective, one that is outside-in and customer-centric. Only by deeply understanding the interests, needs, dissatisfactions, and wishes of customers—both those you currently serve and those who could become your customers in the future—can you imagine the kinds of innovations that will create new value for those customers as well as for your organization.

Now, having laid this groundwork for understanding how you need to think about innovation, let’s delve more deeply into the practical steps involved in building a great innovating engine and making it run as powerfully and productively as possible.

As mentioned in the Introduction, your company’s innovating engine is driven by three key processes: creation, integration, and reframing (see Figure 4.1).

FIGURE 4.1 The Three Key Processes of Innovating

Creation is the process by which the organization continuously generates new ideas. And while we most commonly think about innovation in terms of new products, the new ideas that companies need to survive and thrive involve everything they do—not just product design but also customer service, logistics and fulfillment, financial management, human resource (HR) development, information technology, and much more. Consider, for example, the way BASF has developed the capability to innovate not just through inventing new products and services but by modifying the ways it sells those products and services to customers and even adopting new business models that create fresh streams of value both for customers and BASF.

This means that the process of creation can and should take place continually in every department and at every level of your organization. However, many companies find that their frontline employees play the most important role in directly generating new ideas. This is natural, since in most organizations the frontline workers are the ones who have the most direct contact with customers (and noncustomers) and therefore find it easiest to adopt a customer-centric perspective. Frontline workers also have the most hands-on, day-to-day connection with the organization’s main processes, from product manufacturing to customer service. So while everyone in your organization should be encouraged to generate new ideas, frontline workers tend to be the most prolific fountains of such ideas. For this reason, I refer to them as frontline innovators.

The second process driving the innovating engine is integration. It’s not enough to have a stream of innovative ideas flowing from your employees. Those ideas also need to be evaluated, selected, supported, developed, and channeled through a system that converts the best new ideas into business initiatives to be carried out by the execution engine. I’ve described how this works at W. L. Gore, where ideas generated by employees during their Dabble Time are tested by a three-stage review process called “Real, Win, Worth.” Ideas that win approval through this process may become the basis of new businesses that attract new customers to Gore and support the organization’s long-term growth.

The integration process is also about bringing together all the disparate parts of the organization to help keep the innovating engine humming. For practical reasons, the execution engine tends to operate in siloed fashion, with various departments handling different tasks quite separately from one another. Innovating works best when silos are broken down so that ideas can flow freely among people with diverse backgrounds, skills, and perspectives. Companies that excel at innovating create ways to form multidisciplinary networks that span the entire organization and even include people and groups from outside the organization. This, too, is an element of the integration process.

As with all three innovating processes, integration involves employees from the top to the bottom of the organization. But midlevel managers have an especially crucial role to play in integration. They work directly with frontline employees, guiding and evaluating their work, and therefore have an enormous influence on the degree to which frontline innovators are encouraged and rewarded for innovating. They also have the opportunity to make connections with managers from other departments, which means they can help to facilitate the formation of organizational networks that support innovating. Because these middle managers help to encourage and direct the innovative work of the employees they supervise, I often refer to them as midlevel coaches.

The third process of innovation is reframing. This process is about taking a fresh look at your organization, its mission, its customer base, its characteristic activities, its strength and weaknesses, and its competitive strategy. It’s about asking probing questions about all these features that define the organization: Why have we made the choices we have? Are these choices serving us and our customers well? How are changes in our business environment impacting the value of those choices? What kinds of innovations should we be considering that might help us provide greater value for an evolving world?

Asking questions like these is outside the role of the execution engine. When operating in execution mode, our job is to carry out the existing work of the organization as well as we possibly can, not to challenge or question the decisions that define that work. But probing questions are essential to the work of the innovating engine. The answers you come up with may lead you to fundamentally reframe your organization’s future plans and even its basic identity—in which case, your organization itself may end up being reframed.

Reframing is a valuable activity for everyone in your company to participate in, but it’s especially central to the work of your top management. These senior leaders should be continually looking over the horizon, trying to anticipate changes in the world to which your company may need to respond. Then they should empower and encourage employees throughout the organization to keep the innovating engine humming so that you’ll be prepared to face the future.

Triggering Innovation in a Slow-Growing Commodity Business

To understand more about how the three processes of innovating work and interact, let’s look at a real-life example.

One of the companies I’ve worked with for years is Kordsa, part of the Sabancı Group, a giant Turkish industrial conglomerate. Güler Sabancı, who has been called “Turkey’s business superwoman” and is regularly listed among the world’s most powerful female leaders, is chair and managing director of this empire. When I presented the Blue Ocean innovation techniques to her and a select group of her top executives back in 2009, she immediately grasped their significance. At her request, I ended up training managers from eight Sabancı companies, including the leaders of Kordsa. With 4,500 employees and 12 plants located in countries from Indonesia and Thailand to Brazil and the United States, Kordsa is the world’s largest maker of yarn and fabrics used in the manufacture of tires and other industrial products.¹

The innovation challenge faced by Kordsa was one that many companies will find familiar. In the words of Mehmet Pekarun, then the company’s CEO, “We were operating a mature business in an industry where the basic nature of the product—fabrics used primarily in automobile tires—had scarcely changed in decades. For this reason, many people in our organization wondered, ‘Why should we bother with innovation?’”

But from his vantage point, Pekarun could see how a stagnant innovating engine was preventing the company from growing. Pekarun had joined the firm in 2006 after working for several years in Erie, Pennsylvania, as a manager for GE’s transportation systems division. His stint at GE—then one of the world’s most progressive, best-managed, and most innovative corporations—had been an invaluable period of education for Pekarun. He was well prepared to take on the challenge of discovering new avenues of growth for Kordsa.

At the time, an important element of Kordsa’s business was a joint venture with Dupont, the global chemical company. Kordsa’s management had looked to this joint venture as an entry point for the company into the worldwide tire industry. But this dream had not really materialized, and now the deal with Dupont was coming to an end.

Pekarun was charged with defining a way forward. As he studied Kordsa’s circumstances, he realized the company faced two primary challenges. First, the conclusion of the joint venture with Dupont meant that Kordsa would no longer have access to the innovative capabilities generated by Dupont’s research and development (R&D) operations. Instead, it would have to rely for innovative ideas on its own R&D department, which at the time was small and lackluster.

Second, the lack of a partnership with a big global company would leave Kordsa stuck between its two largest groups of stakeholders: the giant tire makers like Michelin, Goodyear, and Continental, which were Kordsa’s chief customers, and the petrochemical companies, which were Kordsa’s chief suppliers. Under pricing pressure from both of these powerful sources, Kordsa had little strategic freedom. Company leaders had become accustomed to squeezing out growth simply through buying capacity—that is, making acquisitions of smaller materials manufacturers—rather than through innovation.

This was an inherently limited strategy that would be unlikely to give Kordsa a chance to break out of its business niche. It was up to Pekarun to find a solution.

In order to develop some upside growth potential for Kordsa, Pekarun decided to launch an innovation program. The goal was to fill the technology void left by the departure of Dupont and then to use the innovations Kordsa might create as the basis for reframing the business. Pekarun wanted to transform Kordsa from a provider of commodity materials—one among many, competing almost exclusively on price—into a unique provider of services and solutions, and a valuable innovation partner to its customers.

Fortunately, Sabancı Holding’s chairwoman Güler Sabancı was supportive of Pekarun’s ideas. She helped to organize a meeting at which a number of outside consultants offered ideas about how to launch a powerful innovating engine at Kordsa. The result of this consultants’ “beauty contest” was that I was selected to help develop Kordsa’s innovation program.

In addition, CEO Pekarun decided to name an executive who could serve as a dedicated change agent to spearhead the innovation program. While searching for a person to fill this role, Pekarun heard about Cenk Alper, who was then a manager at Bekhaert, a Belgium-based company that specialized in manufacturing steel wire and related products. Alper was both deeply knowledgeable about technology innovation and highly customer-centric in his thinking—just the combination that Kordsa needed.

When Pekarun and Alper met, they immediately clicked. Alper joined Kordsa, and the two men became a highly effective team that would jointly drive the company’s transformation in the years to come.

Under their direction, Kordsa began by investing in a new internal technology center. This provided a hub where the company’s small R&D operation could be modernized, expanded, and improved. In its earliest stages, this new innovation center was dedicated to experimenting with new production techniques that shaved percentage points off Kordsa’s cost structure—for example, by reducing the amount of energy consumed during the manufacturing of tire fabrics. The Kordsa engineers studied methods used in other industries in search of process improvements they could adopt—for example, the use of air-expanded foam rather than water-based materials for coating the undersides of fabrics, borrowed from the carpet industry, and the use of infrared heating rather than convection furnaces, borrowed from industrial bakers.

As these and other process improvements gave Kordsa a competitive price edge over rival suppliers, the company began to gain a reputation as an industry leader.

To build on this reputation, Alper began spending time with leaders from Kordsa’s biggest customers, including such international tire manufacturers as Goodyear, Bridgestone, and Continental. From these conversations, he gleaned insights into the problems Kordsa’s customers faced, the unmet needs they hadn’t previously expressed, and the ways Kordsa might be able to make their operations easier, cheaper, and more efficient. Alper also began hiring retired executives from the biggest tire makers to serve as consultants to Kordsa—“People who could speak the customers’ language,” as Alper explains. These “translators” became another source of customer insights, helping to generate additional ideas about things Kordsa could do to create more value for tire makers.

To convert these raw ideas into practical concepts, Kordsa began developing new product prototyping capabilities. This wasn’t without controversy. One of the first tools the company needed was a trial spinning line, which could be used to produce new fabric yarns and test their strength, flexibility, and adhesion level. This would require a million-dollar investment, and Alper’s request for these funds met some resistance from the company’s board. Why spend so much money on a machine that wouldn’t even be producing materials for sale to customers? But Alper pushed back, explaining that this was an investment in Kordsa’s future. With support from Pekarun, Alper got the funding, and he and his team continued building the R&D capacity that the company really needed.

Within a few years, Kordsa would be operating a state-of-the-art experimental lab that customers themselves could visit, bringing their ideas and watching as Kordsa’s engineers worked to implement and test them. Tire manufacturers began to come to Kordsa’s engineers with questions about their own internal processes: “We are spending a lot of money on certain stages in the manufacturing process. Is there any way you can help us become more efficient?” Kordsa’s scientists started working with customers to cocreate solutions to such challenges.

Little by little, Kordsa transformed itself from a provider of commodity goods—one among many—into a unique provider of services and solutions, and a valuable innovation partner to its customers. One example is a new type of tire cord fabric, branded as Capmax, that eliminates several time-consuming and costly stages in the tire manufacturing process, saving customers money as well as material usage.

This change opened up powerful new growth opportunities for Kordsa. Rather than having to rely on company acquisitions to expand its revenue base, Kordsa now began creating a steady stream of new product and service offerings that it could sell to its existing customers. Gradually Kordsa became more and more important as a supplier to its biggest customers, and claimed a steadily increasing fraction of their spending on materials, components, and services. Michelin raised Kordsa’s company ranking from “low-tier supplier” to “strategic supplier,” reflecting its enhanced value to the tire maker, and soon other giant tire companies followed suit.

Furthermore, new customers that had never considered Kordsa as a potential supplier also began to pop up on the company’s radar, providing still more growth opportunities. These included customers in industries outside of the tire business where reinforced composite materials like the ones Kordsa makes are widely used—for example, construction, aerospace, and electronics. Kordsa found that its technological breakthroughs could be applied to a range of industries, and it opened a new revenue stream based on licensing them to other companies.

Today, Kordsa is considered one of the most innovative companies in Turkey. It’s ranked number three in R&D capabilities among all Turkish corporations and has won numerous awards for innovation from groups like the Turkish Export Council and the national Sustainability Council.

Cenk Alper succeeded Pekarun as CEO of Kordsa. Pekarun rose to become a member of the executive committee of the entire Sabancı Group, and his area of responsibility was broadened to include several other companies within Sabancı’s Industrials group, including such varied businesses as men’s and women’s apparel, corrugated packaging materials, and automotive technology. In each case, he instituted a program centered on innovation, with top-down initiatives designed to support the creation of breakthrough ideas on the front lines of the organization and the development and spread of those ideas with the help of midlevel managers. Within five years, the roster of products offered by Sabancı’s Industrials group had increased fivefold, and sales for the group had increased by 70 percent.

In April 2017, a former project engineer named Ali Çalişkan, who had held a variety of important technical roles at Kordsa, was elevated to the position of CEO, replacing Alper. Çalişkan’s rise was an extension of another innovation-centric policy that Pekarun had pioneered at Kordsa—namely, putting people with deep roots in technological innovation in key leadership roles. Alper, the Kordsa executive who had helped to transform the company, is now the CEO of Sabancı Holding.

Looking back on Kordsa’s recent history, Pekarun summarizes the company’s transformation this way: “It’s fascinating to realize the upside you may have in a mature industry once you get closer to your customers!”

How the Three Processes of Innovating Combined to Transform Kordsa

Now let’s take a step back and analyze how the three processes of creation, integration, and reframing worked within Kordsa to turn it into one of Turkey’s most innovative companies.

Kordsa’s leadership encouraged the process of creation by providing workers at all levels of the organization with the tools, resources, and—perhaps most important—the permission they needed to innovate.

After I was hired to serve as Kordsa’s consulting expert on innovation, I helped set up training programs that introduced everyone in the company to the Blue Ocean tools for analyzing their business and identifying potential opportunities for innovative growth. Alper and his team then conducted a survey of the organization that identified bright spots where innovation was already happening in a small way, and they made sure that these initiatives were publicly recognized, encouraged, and rewarded.

They also analyzed the entire industry landscape to find “adjacent businesses” where Kordsa was not currently active but where there was the potential for innovation-driven expansion. They hired experts in technical areas where they discovered Kordsa needed to improve its level of knowledge, such as polymer technologies. And they made sure that every business unit within the company had at least one Blue Ocean innovation project to work on, so that the concept of innovating would become widespread in the organization.

All these actions helped fuel an explosion of new innovating ideas as the company’s frontline employees, middle managers, and top-level executives all began to think about innovation as part of their daily work.

In the years since Alper began activating Kordsa’s innovating engine, the embedding of the creation process throughout the organization has advanced still further. In the mid-2010s, Kordsa instituted a new program it referred to as total productive maintenance (TPM). Its goal is what Alper describes as “the democratization of innovation.” Taught to workers at every Kordsa facility, TPM gives every employee the power to design and implement processes that improve their own jobs while creating extra value for Kordsa and its customers.

The result is a constant stream of innovations, some big, some small. Three modest yet illustrative examples:

A clever frontline worker developed a simplified method of changing the oil filter on an assembly-line machine that cuts the time for the task from half an hour to five minutes.

To solve the problem of rolls of packaged fabric moving around while being transported by truck, a worker who rode in the back of the truck came up with the idea of installing airbags to stabilize the load, thereby preventing damage and saving significant expense.

An ingenious human resources employee improved the employee on-boarding and training process by proposing that every new worker be assigned a “buddy.” The buddy serves as a guide and mentor for the new employee’s first year on the job, answering questions and helping the new team member learn the Kordsa culture. Once implemented, this new system reduced the stress on company HR managers and trainers, and even led to the creation of a number of lasting friendships. In fact, Kordsa now calls the program “Buddies Forever.”

As you can see, embedding the creation process into every corner of Kordsa has led to a remarkable outpouring of many kinds of innovations—not just new product ideas but new process and management ideas that keep making Kordsa a better place to work.

To promote the second innovation process—integration—Alper and his team created a number of organizational systems to transform the raw ideas that bubble up from Kordsa’s employees into business opportunities that can be acted upon by the company’s execution engine. Kordsa employs what’s called a stage-gate system to organize its innovation activity. This is a project management method in which an innovative concept—for example, a new product idea—is developed through a prescribed series of steps or stages, linked to one another through a sequence of gates. Movement through the gates is controlled by a leadership committee that determines whether or not the concept has met the criteria to make it eligible for the next stage. For example, one gate early in the process requires the building of a convincing business case for the concept; another requires testing and validation of the concept through usage by actual customers; and so on. To protect a promising innovative concept from excessive economic pressures that could squelch it in its early phases, the Kordsa stage-gate system “positively discriminates” in favor of new businesses by exempting them from the corporation’s usual profit requirements for their first five years. This gives the fledgling businesses a chance to grow to scale while any flaws in the profit model are being identified and eliminated.

Continuing the integration process, the entire Sabancı Industrials Group of companies also introduced activities that helped spread innovative practices and facilitated connections among innovators across the group. For example, innovation topics were integrated into the group’s quarterly meetings. The general manager from one of Sabancı’s industrial divisions would bring members of a product team to the meeting to present one of their newest innovation initiatives and respond to comments and questions from colleagues from the other companies.

This practice produced a number of benefits. It promoted the spread of innovative ideas and behaviors from one business unit to another; it established personal connections among innovation-minded employees, which often led to productive meetings and conversations in the future; and it incentivized and rewarded team members for their innovative activities by giving them a prominent internal platform for their work. In some cases, the individual companies’ general managers themselves had not been strongly supportive of their team members’ innovative projects. By shining a spotlight on those projects in the group’s quarterly meetings, the Sabancı group publicly encouraged the team members without doing anything to embarrass or alienate their general managers. This helped spread the entrepreneurial spirit from one business unit to another.

Corporate leaders also employed their personal communication resources to further spread the “innovation contagion.” They created a private list of managers within the Industrials group under three headings depending on their attitude toward the innovation initiative—some listed as supporters, some as opponents, and some as undecided. They then implemented a communications strategy for each group, designing emails, memos, presentations, speeches, and other forms of messaging to move each group in the right direction—encouraging and energizing the supporters, responding to the concerns of the opponents, and intriguing and attracting the undecided. To further support the necessary cultural shift, CEO Alper made time in his schedule to personally lead the training sessions in which new employees would learn to use the Blue Ocean innovating tools.

Through these and other steps, the leadership team pushed the corporate culture of Kordsa to become more welcoming to innovation, helping to turn isolated pockets of innovation into a widespread pattern of behavior that everyone understood was normal and necessary. These were all key elements of the integration process.

Finally, Alper spearheaded the reframing process for Kordsa. Through words and actions, he taught people throughout the organization, from the managers who reported directly to him to the engineers in the labs and the workers on the factory floors, to think of Kordsa not just as a materials supplier but as a creator of solutions for customers. In effect, Kordsa was reframing its very identity so as to put innovation at its core.

This wasn’t an easy task. It involved a number of cultural shifts, some obvious, others more subtle. At first, some managers from departments such as operations and sales pushed back against the new emphasis on innovation. In their work, they routinely faced tough demands for operational efficiency, cost-cutting, and high profit margins—why should the people in R&D be allowed to spend money without having to guarantee results? But of course innovation is all about trying things that are really new—which means that guarantees are impossible.

“We needed to allow people to fail,” Alper recalls:

That meant creating a protective environment for experimentation. I had support for doing that from Mehmet and the board. But at the same time, we raised our overall expectations. We made it clear that innovation was our route to growth, and that we wanted our scientists, engineers, and other workers to be focused on creating new ideas with value-building potential.

We used every tool at our disposal to reinforce the credibility of our R&D efforts. For example, the Turkish government created a regulation saying that any lab that had at least 50 researchers and met some other criteria could become a certified R&D center. We made sure to meet those requirements, which gave us some prestige and relieved some of the pressure on our organization.

Soon, when Kordsa began to receive awards from independent groups for the quality of our innovations, that helped a lot. It began to transform our brand into one that stood for innovation, and people throughout the company began to realize the value of innovation. They started to take pride in Kordsa’s innovative capabilities.

The reframing process that Alper led has now created a new identity for Kordsa. No longer simply a maker of fabrics for auto tires—an undifferentiated supplier of a commodity product—Kordsa has become “The Reinforcer,” a technology innovator that can create an ever-expanding range of specialized materials to meet the needs of companies in a wide range of industries, from tires to construction, electronics to aerospace.

Innovation hasn’t merely given Kordsa more things to do—it has reframed the company itself.

Today, Alper has risen to the role of CEO of the entire Sabancı group. He has dedicated himself to spreading the culture of innovation and a host of innovating processes throughout the group, to businesses in sectors as varied as concrete, energy, and financial services. He guided the launch of a $30 million corporate venture capital fund that seeks out innovating businesses to invest in, looking particularly for companies engaged in creating new digital and materials technologies that are expected to bring additional value to the current operations of the Sabancı group.

Alper himself teaches a class in innovating methodologies to cross-business groups of midlevel managers. It’s a symbolic gesture that leaves no doubt as to the commitment of top leadership to the mission of innovation.

Historic Nonprofit Innovates to Meet New Challenges

Like for-profit businesses, nonprofit organizations must be willing to engage in the reframing needed to remain hospitable to innovation. Consider the YMCA. Founded in London in 1844 under the name of the Young Men’s Christian Association by a department store worker named George Williams, the YMCA was brought to the United States in 1851 by a retired sea captain from Boston named Thomas Valentine Sullivan. Today, the venerable community institution is familiar to most Americans as the place where kids go to shoot hoops or swim a few laps in the pool. But there’s much more to the YMCA than this. Over the decades, the Y (as most people now call it) has gone through a series of reframings, repeatedly innovating its service model in response to new social challenges.

In its original incarnation under the direction of George Williams, the Y was a center of study and prayer designed to help young people develop sound moral and intellectual values despite being surrounded by the temptations of the city of London. The core of that mission—helping people develop their own resources and so enjoy more productive, satisfying lives—has remained constant. But new ways of pursuing that mission have continually emerged.

In 1856, in response to the growth of America’s immigrant population, the Y in Cincinnati, Ohio, offered the nation’s first-known program to teach English as a second language—in this case, for German speakers. During the 1860s, YMCA facilities in American cities began offering safe, affordable housing for young people who had moved from the countryside in search of work. Amenities such as gymnasiums and auditoriums were soon added, and in 1881 a Y staffer in Boston coined the term “bodybuilding” and began leading some of the first exercise classes ever taught. Thus, the YMCA became known as a place where people could maintain their physical fitness despite the restrictions of life in the big city.

Program developers at the Y continued to innovate. In 1891, a YMCA training school in Springfield, Massachusetts, was in search of a lively indoor game for young people to play in winter. Tasked with meeting the challenge, a physical education teacher named James Naismith nailed a couple of peach baskets on opposite walls of a gym and invented basketball. It has since become the world’s second most popular sport (trailing only soccer). Once again, the Y had used its innovative capacity to respond to customer needs.

The Y also developed programs specifically designed to meet the needs of particular customer groups. In 1853, Anthony Brown, a formerly enslaved man, founded the first YMCA for African Americans. To this day, the Y has a robust array of programs that cater to the interests of Black Americans, including, for example, Black Achievers, a mentoring program launched at the Harlem branch of the Y in 1971 that has since been expanded to include all kids from minority backgrounds.

In 1903, the Y created an “industrial” department to serve the needs of blue-collar workers like miners, lumberjacks, and railroad workers, and later added programs aimed at refugees needing help to adjust to life in America. During World War II, YMCA staff even worked secretly to provide clubs and activities for Japanese-American youth who were being held in US government internment camps.

All of these innovations were crucial to keeping the Y vibrant and relevant to emerging generations of Americans. But perhaps the most dramatic reframing in the history of the YMCA has taken place within the past decade.

In 2010, the leaders of the Y realized that demographic changes in the United States were once again creating new social needs that their organization could help to meet. As the baby-boom generation moved into its retirement years—the largest and wealthiest such cohort in American history—older Americans with enhanced life expectancies found themselves with more free time for self-development than their parents or grandparents before them. As a result, the fastest-growing segment of YMCA membership was not youngsters or even families with children but rather older adults. And while many of these aging boomers were financially well-off, large numbers of them were suffering from chronic health conditions that prevented them from taking full advantage of the leisure and recreational activities the Y offered. These chronic conditions—diabetes, heart failure, pulmonary disease, and obesity—were often poorly diagnosed and treated because of another challenge of American life: the country’s dysfunctional healthcare system, which had left millions of people without easy or affordable access to medical treatment.

In these converging social trends, the Y’s executive leadership recognized a new opportunity for innovation. The Y began working with medical experts to develop a first-of-its-kind community-based program of intensive lifestyle interventions—diet, exercise, and counseling—to help older people avoid or reduce the impact of the chronic conditions that afflicted millions of their peers. Among other initiatives, the YMCA participated in research by a trio of experts—pediatrician Aaron Carroll, social psychologist David Marrero, and physician Ron Ackermann—to test whether such interventions, facilitated through face-to-face goal-setting meetings, could have a meaningful impact on rates of diabetes in older adults.

The study, conducted at the Indianapolis YMCA, included more than 3,200 patients and produced dramatic results. One group of participants, who were treated only with medication (metformin, which can lower blood sugar), experienced a 31 percent reduction in the risk of developing diabetes. But the group that participated in a 16-hour lifestyle intervention program enjoyed a 58 percent reduction in their risk—and for those aged 70 or above, the reduction was 71 percent. “The trial was ended early,” Dr. Carroll explains, “because the results were so compelling.”²

This study confirmed that the concept of using lifestyle interventions to combat diabetes was potentially valid. Now the creation process had to be complemented by the integration process, so that the YMCA’s execution engine could take the new program and begin carrying it out using the resources of the entire organization.

The biggest challenge was finding a way to translate the experimental protocols into a program the Y could implement. As Dr. Carroll notes, “There was no real-world, widespread mechanism to start the intensive intervention the prevention program required. At $1,475 a patient, it was just too expensive and impractical to run in physician offices.” But the community-based facilities of the Y offered a viable alternative. Dr. Carroll describes what happened next: “As the behavioral expert, Mr. Marrero worked with the Y to reshape all 16 core intervention lessons and several maintenance lessons into a group-based format led by instructors who were Y employees. The [cost of the] new intervention was about $205 per person, a fraction of the original cost.”

Healthcare experts endorsed the value of the Y’s program. Soon the federal government offered to help. Further research had shown that the program could reduce new cases of diabetes by as much as 70 percent, potentially saving America’s beleaguered healthcare system billions in long-term costs. In 2009, the Affordable Care Act—sometimes referred to as Obamacare—appropriated funds to the federal Centers for Disease Control and Prevention (CDC) to support the implementation of the National Diabetes Prevention Program by the Y and other community groups.

Meanwhile, in December 2010, as the Diabetes Prevention Program was being rolled out, the Y hired Dr. Matt Longjohn, an expert in chronic disease prevention, as the first physician executive in the organization’s 160-year history. The launch of the diabetes program and the hiring of Dr. Longjohn represent crucial steps in the Y’s latest self-reframing initiative. Dr. Longjohn declared, “We hope that 20 to 50 years from now people will look at this moment and say that’s when the Y got involved in community health.”³

To implement the diabetes program, YMCA facilities around the country hire health coaches from local communities, focusing on populations that are at greatest risk, such as people of color. This makes the program more accessible and relatable to those who need it most. The Y also offers versions of the program designed for those who are visually impaired as well as those who are most comfortable using languages other than English.⁴ In these ways, the Y is practicing one of the most important principles of effective innovating—keeping a sharp focus on the specific, real-world needs of customers (and relevant noncustomers) and being guided by those preferences as it designs its services.

By 2015, more than 1,300 YMCA locations in 43 states and 186 cities around the country were offering the Diabetes Prevention Program. By 2020, over 64,000 YMCA members had participated in the program, and many more had taken part in parallel programs offered by other community groups based on the Y’s original research.

What’s more, it seems clear that the program has been generating real benefits. In May 2019, the CDC announced that new diabetes cases had experienced their first-ever decade of decline, falling to 1.3 million in 2017 after peaking at 1.7 million in 2008. “While the causes of the plateau and decrease remain unclear,” the CDC said, “researchers suggest that they may be driven in part by increased awareness of—and emphasis on—type 2 diabetes prevention, changes in diet and physical activity, and changes in diabetes diagnostic and screening practices.”⁵

The YMCA offers a vivid illustration of how even a venerable nonprofit organization can implement the three processes of innovating as a way of meeting social needs in an ever-changing world. Transforming a local “gym and swim” center into an access point for lifesaving health interventions represents the essence of reframing.