E-book: 'What is Innovation from an Advertising Agency?' "What is Innovation in the Modern Age?" (3)

The 'DENTSU DESIGN TALK' series, compiling talk sessions between Dentsu Inc. creators and leading creators, intellectuals, and executives, has been published by Book Walker Inc.'s compact e- book label, [Kadokawa Minute Books].

We present a glimpse of the first session released on January 30, 2014: "What is Innovation from an Advertising Agency?" featuring Mr. Dai Tamura, former Hakuhodo executive and co-representative of Re:public, and Mr. Kenji Shiroto, Special Advisor at Dentsu Inc.

 

<Understand, Create, Realize>

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Shirato: At the University of Tokyo i.school, a school for innovation, what kind of approach do you actually take to tackle these difficult problems?

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Tamura: I take an ethnographic approach, but the ideas advocating "how to create innovation" are diverse, and there's no single definitive answer. The University of Tokyo i.school is the mechanism for learning these approaches. Participants are selected from all students enrolled in the University of Tokyo's 15 graduate schools—young people brimming with creativity and motivation.

What exactly do you do?

As one example, in a workshop I led last year, we met weekly for ten days. For the first seven days, we focused solely on research and analysis. This approach is unheard of in conventional design or creative education.

At the University of Tokyo i.school, we ensure all workshop programs include three essential steps: "1. Understand, 2. Create, 3. Realize." However, the emphasis shifts depending on the program. Existing design schools often start directly with "2. Create," leaving research largely up to the individual and rarely incorporating it into the formal curriculum. In a program where we spent seven days on research, we focused on the first step: "1. Understand." Since the theme of this workshop was thinking about the future of games, we started from scratch, rethinking the very concept of games by asking questions like "What is a game, fundamentally?", "Who is a gamer?", and "What motivates gamers to play?" Through this process, we aim to shed our stereotypes and preconceptions about games, derive new visions of games and gamers, and then attempt to reshape the very concept of games from there.

Another defining feature of the University of Tokyo i.school is its deliberate placement of programs outside the university campus. Partnering companies include Hakuhodo, the Silicon Valley-based design firm IDEO, and ziba, a Portland, USA-based design firm gaining global recognition for its work in experience design. Among universities, we collaborate with the Royal College of Art in the UK; Aalto University in Finland, a 21st-century innovation university championed by the Finnish government; the Industrial Design Department at KAIST in South Korea, a leader in this field ahead of Japan; the Rotman School of Management at the University of Toronto, known for teaching design in business schools; and the well-known d.school at Stanford University. We collaborate with these external partners, bringing their programs here or sending ours there, and launching joint programs to work together.

This year (2011), the University of Tokyo i.school has seven sponsors. While rare within the University of Tokyo, we have successfully achieved 100% external funding for our operations. We also invite employees from our sponsor companies to participate in workshops alongside our students, which benefits both the students and the companies.

Working professionals are better at bringing ideas to fruition, while students offer more flexible and innovative thinking. We advance teamwork by effectively blending the roles and strengths of both groups. In this sense too, we feel that deliberately placing the program externally is functioning positively. Another characteristic of the University of Tokyo i.school is its ability to effectively curate and integrate these three resources at its core.

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＜Research is not the same as investigation＞

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Shirato: Regarding the term "research," I think it would be helpful if Mr. Tamura could share his own definition. The seven-day research period you mentioned earlier differs from the quantitative research done in daily work to verify facts, doesn't it?

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Tamura: What I often say is that the research I'm talking about is "something you can't outsource." Research is fundamentally an activity to focus your decision-making—to determine "this is the direction we should take," "this is what we should do." But this is actually quite difficult.

In so-called marketing research, the ideal is often said to be isolating just the survey part, making it possible for anyone to reach the same conclusion. In other words, research that guarantees a high degree of probability from the start – ensuring that whoever makes the decision arrives at the same conclusion – is what's considered important research in a corporate employee context. But the research I envision is a process for arriving at new criteria for judgment—things like "Isn't this important?" or "We won't change the world unless we do this"—regarding things no one has noticed before or where consensus hasn't yet formed. It might not feel very research-like, but groundbreaking hypothesis formation in scientific and technological research almost always emerges from such a process.

In other words, it might be easier to understand if you think of it as research as the "royal road of inquiry." For me, research isn't just about gathering data. It's the introductory process that helps decision-makers shake off their preconceptions, solidify their convictions, and move toward action.

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＜Innovation is about creating unprecedented habits＞

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Tamura: Why is design education trending now, and why are design and innovation often equated? I believe it's fundamentally because design itself is the activity of creating something new. And I think the crucial outcome generated through design is ideas. However, the relationship between ideas and innovation is quite complex. As mentioned earlier, our definition of innovation is "the widespread adoption of an idea that brings about irreversible change in human behavior, habits, or values." What I want to discuss here is whether innovation occurs simply because the idea itself is good.

A particular case study made me think deeply about this. It was around 2003 when the US design firm IDEO decided to close its Tokyo branch and scale back its operations in Japan. While they were agonizing over how to handle relationships with key Japanese clients, I happened to meet with IDEO members, and we ended up collaborating on a project in Japan.

What impressed me most from what the IDEO members shared was their story of co-creating a new service for Bank of America, a major U.S. bank. It was called "Keep the Change," a service that combined two bank accounts onto a single debit card.

One was a checking account, and the other was a savings account. For example, if you made a $44.37 purchase using this debit card, $45 would first be deducted from the checking account. Then, the 63 cents in change would be deposited into the savings account.

This service was recognized as the most outstanding innovation at a design award by a global business magazine. It also achieved significant business success. Within less than a year of its introduction, it attracted 700,000 checking accounts and 1 million savings accounts, making it one of the most successful cases in the recent retail finance market.

However, viewed cynically, one could argue this service merely replaced physical coin savings with an electronic alternative—essentially turning a piggy bank into a service. The idea itself seemed commonplace. So initially, I didn't quite understand why this was considered groundbreaking innovation. This led me to wonder: if a great idea isn't innovation itself, what is the relationship between the two? When I posed this question to the IDEO team, they shared some fascinating insights.

Before launching this project, they spent about six months conducting research similar to what was done at the University of Tokyo i.school. This research focused specifically on individuals with middle-to-lower income levels, particularly women with families. What they discovered was a surprising fact: the common trait among those struggling financially wasn't the size of their individual purchases, but the sheer number of times they spent money. I had assumed that making large purchases was what drained my money. But when we make big purchases, we're usually quite aware of the impact and make a conscious decision, right? In contrast, the IDEO team identified the money spent without much thought as the real reason savings didn't accumulate.

So, we wondered: Could we create a system where spending money simultaneously helps you save? This would ultimately help people who previously couldn't save money form the habit of saving. In other words, it fits our definition of innovation: "Creating habits that didn't exist before." If that is innovation, then this was innovation itself.

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The Kadokawa Minutebook e-book is available for purchase below