IQ News: Tool Time

You have your prototypes, models and simulations and now, advises IQ's Michael Schrage, in an excerpt from his new book, it's time you learned to use them. Jay Chiat strongly believed in drawing clients into collaborations by inviting them into "tissue-filled" rooms outlining themes and concepts for advertising campaigns. It's not that Chiat didn't trust the creativity of his world-class people; he also understood the sociology of world-class clients. They don't want their brand advertising to become a fait accompli; they want to be--they need to be--involved in the process of creation. Great advertising is less the product of truly creative individuals than truly creative relationships. But what are the media to manage those relationships? In the first and final analysis, brilliant ideas in advertising, by themselves, are meaningless. The representations of brilliant ideas, however, are priceless. The tissues, the comps, the roughs that capture the ongoing process of creative iteration are, in the broadest sense of the term, the media that give truly innovative agencies the chance to create with and for their clients. And now, just as videotape and non-linear editing transformed how television ads are mocked up and modeled, the Internet has transformed how clients and agencies alike prototype tomorrow's ad campaigns. These new media may no longer require that agencies pull clients into tissued conference rooms, but new technology is evoking--and provoking--new creative relationships between clients and customers. Managing the media that manage those relationships is becoming a mission-critical core competence for any agency that hopes to compete on the basis of creativity. There's a reason why interactive services firms such as Agency.com, Scient and Razorfish have made bold inroads into traditional marketing budgets. Much of their success can be attributed to their willingness and ability to rapid-prototype both the advertising products and processes their clients declare important. In this excerpt of Michael Schrage's forthcoming book, Serious Play: How the World's Best Companies Simulate to Innovate (Harvard Business School Press), he explores several design challenges that confront tomorrow's cultures of prototyping. He argues that companies that want to compete on the basis of creativity and innovation need to fundamentally upgrade and enhance their modeling, prototyping and simulation cultures. "If we don't want our personal computers to become a commodity then we can't prototype it like a commodity," says one former IBM PC designer. "Unique products come from unique processes; commodity products come from commodity processes." You are welcome to agree or disagree; but there should be no doubt that this design philosophy better reflects internal values than market imperatives. Much as an investment portfolio betrays personal perceptions of risk and reward, prototype portfolios reveal the values and priorities the internal corporate marketplace holds dear. Prototypes, models and simulations thus become essential tools for managing organizational introspection. This is where their value can have the biggest impact of the enterprise. This perspective also explains why so many organizations are so dissatisfied with the returns on their prototyping portfolios. They're looking for value through the wrong end of the telescope. They honestly believe that understanding The Problem is more important than understanding themselves. This is a perfectly understandable misunderstanding. Alas, history teaches that there is no clear link between external understanding and self-awareness. Organizations typically find their models reveal the gaps between what firms claim they want to accomplish and what they are actually prepared to do. In the real world, these models, prototypes and simulations quickly become the tools and technologies of trade-offs. Should the process be optimized around minimizing costs or maximizing output? ... Which features must be sacrificed to bring costs down 20%? What is the warranty exposure for adding this capability? Does this functional upgrade justify an average 7% degradation in overall performance?... Form or function? ... Design for Manufacture or Design for Maintenance? Should we ship 85% finished to hit the market 90 days early? Or wait ten weeks to get quality up to 98%? Essentially, the purpose of a prototype is to either create a choice or to discover ones that didn't exist before. Models, simulations and prototypes are machine tools for producing choice. The best prototypes, models and simulations produce the most useful and important choices. They define the contexts for trade-offs. Modeling media are typically more cost-effective than marketplaces for discovering what trade-offs need to be explored. Sometimes, the answers are self-evident. Not infrequently, those self-evident answers are blithely ignored. But make no mistake: these trade-offs--and the negotiations and budget battles that surround them--determine how organizations manage themselves and their innovations. Indeed, these models, prototypes and simulations are a surrogate marketplace where economic value gets created and traded. More starkly, the value here isn't so much in the models themselves, but in the interactions--the conversations, the arguments, the consultations, the collaborations--they invite. Prototypes and simulations force both individuals and institutions to confront the tyranny of trade-offs. That confrontation forces people to seriously play with the difficult choices they must ultimately make. Confrontations over trade-offs are always stories about how people interact. Models, prototypes and simulations become characters in these narratives of organizational change. We need to pay close attention to how those characters behave and how people play with those characters. The design challenge becomes "What kind of interactions do we want to create?" rather than "What kinds of models, prototypes and simulations should we be building?" That question strikes at the heart of strategic introspection. This is the challenge for Disney's designers as much as it is for the innovation communities at a GE Capital, an America Online or a DaimlerChrysler. These models, prototypes and simulations aren't ends in themselves; they are means to an end. They define how firms play with possible realities. They are how successful organizations get real. Consequently, the design focus--the value emphasis--must be on the quantity and quality of human interactions that modeling media can support. Who should be working together? What should they be talking about? Who should see the model next? What is the internal market for value-creation? How is the value created in that market mapped onto the external marketplace? In these microeconomies of enterprise innovation, changing the prototype changes interactions; changing interactions leads to changes in the prototype. Properly managed, this becomes a virtuous value cycle. Mismanaged, the result is a vicious downward spiral of pathological inefficiencies. What emerges from this discussion is a simple but powerful insight into innovation management: The value of models, simulations and prototypes emerges from how productively people interact around iterations of representations over time. Or, more simply, the value of prototyping and simulation comes from how people behave around versions of models. By changing any or all of these variables - the people - the interactions - the versions/iterations - the medium of the model/representations - the time an organization can incrementally--or dramatically--transform how it creates value. [In changing] the medium of representation from a 2D sketch to a 3D Solid Model CAD an engineering/manufacturing collaboration is transformed. Insist that industrial designers create five versions of a prototype in six weeks instead of two iterations in four weeks and the marketing dialogue expands. Any organization committed to a "speed-to-market" philosophy inherently commits to practicing "rapid prototyping" if it has any hopes for success. Professionally facilitate an interaction with external customers and suppliers represented at a product prototype review. Contrast that behavior to a review where only internal managers are present. Change representations, iterations and time, we can change the nature of interactions; change the mix of people, we can change the number of versions and models. Changing the culture of simulation and prototyping always changes the culture of innovation. You can't have a culture of innovation without a culture of prototyping and simulation. What quickly becomes apparent is that the standard notion of "innovation processes" driving the prototype development is often a misleading management fiction. When organizations with effective innovation cultures are examined, empirical observation confirms just the opposite: changes in prototypes and simulations drive the innovation process. Leaders from the CEO on down must step back and ask: Do we get more value from better managing our innovation process to get a prototype? Or from better using the prototype to manage our innovation process? Organizations that don't appreciate that distinction understand neither their processes nor their prototypes. Managers can learn far more about their company's innovation culture by studying its simulation and prototyping artifacts than by analyzing its espoused innovation processes. Forget traditional management theory. In practice, these modeling media consistently turn the conventional wisdom of innovation management inside out. Reprinted by permission of Harvard Business School Press. Excerpt of Serious Play: How the World's Best Companies Simulate to Innovate by Michael Schrage. ©1999 by the President and Fellows of Harvard College; All Rights Reserved. RemarQ Looks to mySimon For Value Community and commerce site RemarQ today announced a distribution deal with Santa Clara, Calif.-based comparison shopping service mySimon, in which RemarQ will refer users to mySimon to find the best deals. "There's a natural blend there because so many people go to discussion forums to do the research they need to make informed purchase decisions," said Phil Carpenter, director of corporate marketing for RemarQ. "Given mySimon's focus on scouring the Web for great values, it was a perfect fit." RemarQ, based in San Jose, Calif., has evolved from its roots as a Web interface for Internet newsgroups to an e-commerce enabler. This week it began offering advertisers the opportunity to buy keywords within discussions and to add links to their sites below messages. The relationship with mySimon will provide links to related categories or search results pages on the site. Neither company would disclose the terms of the deal, except to note that they would share revenue from sales. "Discussion sites are looking for a way to monetize traffic," said Josh Goldman, president and CEO of mySimon, "and we've been approached by many companies. We're impressed with [RemarQ's] philosophy." Evidently, he was equally impressed with that of RemarQ's chief competitor, Deja.com of New York, which has the same business model and a similar distribution arrangement with mySimon. Carpenter said RemarQ wanted to partner with "the strongest on the block," despite the Deja.com alliance. RemarQ also announced beefed-up search capability, which includes the ability to limit a search within a particular news group. Individual discussions are rated with stars (one to four), and users can choose to be notified when a particular discussion has new messages by setting up personal MyRemarQ pages. The partnership with mySimon does not include any cross-promotion, Carpenter said, but the shopping service will be featured throughout the RemarQ site. "From the commerce perspective," he added, "we're making it even easier for prospective buyers to get the unvarnished truth. The better the results are, the happier people will be with the service." --Susan Kuchinskas Tough Buy: Fact or Fiction? Is it really harder to interpret the media opportunities in cyberspace? Or are on-line media gurus just bellyaching when they say that their jobs can be more complex than those of their traditional media counterparts? In our ongoing search for truth and justice, the IQ staff rifled two months worth of IQ News, looking for trends, site launches and new ad opportunities that an online media executive would feel the need to know about. Here's a sampling of what we found: July 19: 24/7 Media said it would launch a nationwide ad sales force exclusively for the convergence of TV and the Internet; PC Games publisher eGames unveiled a proprietary ad-serving technology; and Enliven announced features that would allow advertisers to serve dynamic ad content and access consumer databases in real time. July 26: Foofoo.com is announced, a site that merges content from tony mags with tony e-tailers; and Opt-in marketer emaildirect announced a new performance-based pricing scheme for its Value-mail service. August 9: Initiatives were announced by DoubleClick and AdKnowledge that provide new data to gauge return on investment--part of an ongoing trend among media shops to provide more and better data mining technology; also, LaunchPad Technologies was reinvented as EntryPoint, a site that offers, among other things, the option of a competitor's credit card popping up when a user selects his/her card. September 13: PointClick.com says it will pay users cash to surf its advertiser-laden site; and Spinway.com previewed proprietary technology offering full-motion video at dial-up. September 20: Global Music One announced music-playing postcards, sent via e-mail; Internet-only action sports company Nirve launched its Web site; and StarMedia Network, targeting the Spanish- and Portugese markets, unveiled Periscopio.com, a Spanish-language portal. Hey. Online buyers. Bellyache away.

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IQ News: Tool Time

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