Dan Wieden was never big on extrinsic forms of validation like Agency of the Year citations, apparently. So when the agency co-founder and global executive creative director stood before his entire staff in 2007 and issued a plain directive�he wanted Wieden + Kennedy to be Digital Agency of the Year by 2010 � all assembled pricked up their ears."It was out of character," says W+K Portland executive creative director Mark Fitzloff. "He never really had that much respect for industry accolades. So I personally took it to mean, 'OK, I'm serious now.' Because he just doesn't do that."

The team at Wieden + Kennedy Portland didn't fulfill its founder's directive to the letter�but in the end maybe went one better. Creativity considers all agency types in its agency of the year selection process- digital, full service and everything in between� so only one top agency emerges from that multi-disciplinary pile. But no agency can win now without demonstrating a "digital" mindset in its work, and an overall fitness to thrive in a digital world. Wieden simply represented the best all-round agency, one that happened to distinguish itself by having the best "digital" campaign of the year.

It speaks well of just how the agency has evolved that it's more and more difficult to parse its work along digital and non digital lines; there are just a lot of great, relevant ideas that came to life in different forms across different media. The agency's work in 2010 embodied the best qualities of each medium, but didn't feel wedded to traditional notions of those media.

As it's always been inclined to do, the agency made some of the industry's best spots � its "Human Chain" for Nike and "The Man Your Man Could Smell Like" for Old Spice ad were among the most awarded of the year. But in many cases, the TV spots felt like the starting point for a wider cultural conversation.

For Nike, the agency was tasked with cleaning up two of the sports world biggest messes� the revelations of Tiger Woods' breathtakingly easygoing attitude towards marriage and LeBron James' badly mishandled move from Cleveland to Miami. Neither of the resulting spots � "Earl and Tiger," which featured a black and white study of the athlete's face against a recording of his late father's voice, and "Rise," in which a petulant James asks, repeatedly, What Should I Do? - seemed to allay public antipathy, but boy did they both generate attention, talk, parodies and untold millions in media value.

The agency followed up its landmark 2009 Livestrong campaign with a new iteration of the award-winning Chalkbot, the social media-powered mobile contraption that translated Tweeted messages directly onto the Tour de France course. Chalkbot was awarded the Cyber Grand Prix in Cannes in 2010, with the integrated Livestrong taking a Integrated Grand Prix and both wins signaling the death of W+K's analog-only rep.

For Levi's, the agency created one of the most interesting and controversial brand initiatives of recent years with the Ready to Work campaign that saw the brand and agency partner with distressed rust belt town, Braddock, PA and its (real) maverick mayor John Fetterman.

The shop's work for Target was so on the mark that W+K was appointed lead agency, an unprecedented move from the marketer. Last year the agency created a fresh yet familiar identity for the retailer and a multi-pronged campaign that included everything from spots that sent up the season finale of Lost to a Christmas initiative that saw the agency commission modern seasonal songs from up and coming artists, with the tracks available for sale through Target.com.

The agency went way beyond Old Spice for P&G, with a corporate campaign (a first for the marketer) for the Olympics that positioned the packaged goods giant as the "Proud Sponsor of Moms." Spots during the games that thanked the selfless mothers of Olympians put lumps in throats, but the agency went further, creating the ThankYouMom.com site, and an on-site initiative which saw P&G flying all Team U.S.A. moms to Vancouver and setting up a "family home" at the games.

And then, of course, there was the Old Spice "Response" campaign, the universally lauded and envied social media phenomenon that featured Isaiah Mustafa, The Man Your Man Could Smell Like, speaking directly to web commenters both famous and anonymous. The campaign combined core W+K competencies � great storytelling, a flair for execution and a sense of current culture- with the kind of modern grasp of media behavior that comes with fresh eyes and new skill sets. Like all of W+K's best work of last year, it embodied the agency's character, yet it surprised.

Given the enormous success of that campaign, the choice of W+K Portland doesn't feel particularly original this year, but it does feel overdue, and earned. Below, a look at how Dan Wieden and other agency leaders thought about W+K's digital imperative, and how they went about evolving the shop for a new creative era.

When cornerstone client Nike moved its running business to Crispin Porter + Bogusky in 2007 for reasons directly related to the agencies' relative digital acumen, W+K became the industry's favorite cautionary tale of creative calcification. Inarguably, the shop had an monster legacy of spot storytelling, and its culture of traditional ad excellence did act as a kind of ironic roadblock to evolving for a changing media landscape.

But it should be remembered that, from the start, W+K also had a streak of originality and innovation that was a significant part of the shop's M.O. and that made the shop's narratives seem consistently fresh. Many of the wider network's efforts over the past 10 years demonstrated an understanding of how to engage audiences beyond the ad. The agency was an early innovator in branded content, creating the MTV show Nike Battlegrounds in 2003 and the well-received Nike site whatever.com in 1999. The New York office created one of the earliest and best brand-backed alternate reality games with "Beta 7" for Sega. More recently, the agency won kudos for its integrated campaign for the film Coraline, and, pre-Mustafa, the Swaggerize Me site for Old Spice.

But all acknowledge that there were false starts, failures and just a general lag in evolving the creative culture, process and output to remain the creative beacon the agency had been for most of its 28 years.

As "the guy who was reluctant to give up my typewriter," Wieden admits that it took him, and the agency, a long time to really understand change that the digital age represented."You think of these things as incremental and suddenly you wake up and say, it's not an incremental change," says Wieden. "It's a complete psychological shift in the way people relate to one another." It made Wieden start thinking about the digital revolution in terms of the agency's historical strengths. "I thought, that's what we're good at�one of the things we've always brought to the marketplace is the ability to form amazing relationships between clients and their customers. We have an innate ability to get at what drives a company and capture that and create that personality so it's vivid not just to the outside world but inside the company. So when we started looking at digital as not jut a medium but as a whole different way of creating relationships, that's when I think for me personally, I understood the impact of what was going on."

Wieden's agency of the year challenge was a clear directive to the shop's creative leadership to find solutions, says ECD Susan Hoffman. "It was the beginning of our starting to wake up in terms of how do we really change this place; how do we put the Wieden take on the digital world."

John Jay, the global executive creative director who moved back to Portland in 2005 after running the agency's Tokyo office, boils down the mandate for change as one of relevance. "Whether or not it was about the technology, we would have to evolve," says Jay. "It all comes down to being relevant�for people, agencies and brands."

The overnight transformation that resulted in creative milestones like Chalkbot and Old Spice "Response" didn't happen overnight, of course.

Wieden had brought on Renny Gleeson as global director of digital strategies in 2006 and at the beginning of 2010 recruited Poke London co-founder Iain Tait as global interactive executive creative director. In between, there was trial and error.

The agency had been recruiting digital talent all along, but early efforts didn't always gel. "I don't think we quite understood how difficult it was going to be," says Wieden. "We brought digital talent into the place at various levels and tried to figure out how to integrate them, or keep them separate or what was the right way to do it. We struggled for quite a while. People came in and then would leave, which wasn't helping our reputation."

An agency like W+K, known for its creative rigor and sky high standards, does breed.. let's' not call it arrogance, but perhaps a healthy self belief. Senior creatives had to work to redirect the agency's culture and creative energy. "If you're known for being really good at something you've got a lot to lose by leaving that or expanding your horizons," says Fitzloff. "Also, from a PR perspective, when we did have (non-traditional) hits I don't know that we got enough credit for them, because there was always other stuff we were going that got recognized."

There was a culture of skepticism at the agency, and the creative leads felt some of the work that was being lauded in early days of digital wasn't up to standard. "We saw a lot of gimmicks drive digital ideas in the early days," says Fitzloff. "If you're thinking about your job, in the simplest terms, as creating two way communications, if that's your filter, and you look some of the early digital executions, they required so much time to respond to it or to download, or to get the software on your computer so you could interact with it; all those things that were so completely at odds with easy two-way communication. To us those things were sort of a waste of time."

Hoffman says it was that essential shift in approach�seeing advertising as a conversation rather than a one-way broadcast�that really, finally ushered in the new era at the agency. At that point, Hoffman says the agency started finding new people and finding a new dialog."It was getting enough people speaking the language and understanding it," says Hoffman. "When there were only a few people speaking that language it was frustrating for them."

To Hoffman and Fitzloff, it was critical that existing "traditional" creatives felt at least conversant in that new language. "I think what helped was a little window of time where people who were already there with a traditional media background got to have a few experiences on their own that were successful," says Fitzloff. "I don't think it would have worked for an outsider to come in and just preach about the right way to do this. It was about learning the tool box ourselves and then bringing people in." That process unfolded before the agency added some of its most significant digital leaders, people like Seth Weisfeld an interactive creative director who joined from BBH, and, of course Iain Tait,."Those earlier projects have us self confidence so we were more open to hearing what they had to say," say Fitzloff.

That confidence has meant the agency has developed a digital mindset, but can look at the larger media picture, what Hoffman calls "democracy of media." "It's important now that we have more confidence that digital isn't the only part of the equation. We look at all brands in a 360 degree sense; what's best for brand and the assignment." It's no coincidence, says Fitzloff "that of our two biggest digital campaigns this year, one of them - Old Spice - was dependent on a TV spot and one of them - Chalkbot - was dependent on paint."

W+K's particular culture was such that models and standard operating procedures couldn't be counted on to provide a road map for a new era. "One of the things we're not necessarily great at in the creative department is creating formulas for things," says Wieden. "One of the hallmarks of the place has been experimenting. Now there are a lot of different kinds of relationships between digital and traditional folks. "

Hoffman says the biggest change has been the re-imagining of the creative team. Before, of course, the idea rested solely with a writer and art director. Now, as with most agencies, the composition of teams varies, but there are more people involved in what Hoffman has taken to calling "the platoon" rather than the team.

One major structural shift saw creatives unmoored from single accounts and allowed to contribute to multiple teams. "Before, you were put on an account, you sat with that core team on that account; creatives, media, accounts, everyone," says Fitzloff. "We were at that extreme end." Then the agency switched to a bull pen approach; talent was pooled so that a writer or a technologist or media person or interaction designer might work on any number of accounts, as team leaders pulled from the pool to create bespoke teams for each account.

That shift made hiring a broader range of non-traditional talent more practical, says Fitzloff. "If you're a creative director and you only have three people working on your account, it's harder to get your head around hiring someone who's more of a specialist or has a different background. In the bullpen approach, hiring a digital designer or an art director from the fashion world or a photographer who can act as an art director, it has less of an impact on each team."

While the ECDs say the pendulum is swinging back toward the dedicated team model, pooling talent made a difference in the composition of the agency's creative staff. "We have talent that doesn't fall into any of the formats we always had, people who do things that none of us did," says Hoffman. "Those combinations are going to get us more surprising work."

Fitzloff and Wieden also both emphasize the importance of WK12� the in-house ad school/creative lab/mini-agency founded in 2004 �in the evolution of the shop's creative mindset. "We started to use (WK12) as a lab to see how people came together to work," says Wieden. "And the partnership thing is not necessarily how they like to do it. Sometimes they'll have a group of five or seven folks who'll bat ideas back and forth. It's more of a fluid thing." "It's played a huge role," says Fitzloff. "I'd recommend it to any agency."

In experimenting with departmental structures and adding new roles, the agency also created a digital studio, now headed by creative technology director Igor Clark and staffed with digital designers, developers and other interactive specialists. Clark joined the agency last fall after working as technical director at Poke London and then head of digital delivery at Guardian Media. Clark says he moved on from his last agency job to "try and get away from the constant campaign bubble," the idea of working on one finite ad campaign after another. "The things that really struck me in talking with Iain and Renny were that there was actually a desire to try to move in a similar direction, away from that constant round of individual pieces and to try to provide ongoing platforms and ongoing conversations in which clients can really communicate with their customers. That was an initial thing that was different than what I heard in other agencies, but importantly that was coupled with the fact that the whole environment agency was also overflowing with ideas and creative juices."

Further to hiring Clark and others with technical chops, Fitzloff says the agency tries to ensure that those roles don't feel marginal to the creative process or like a lesser career path. "We tried to build new opportunities for people to be creative here," he says. "We wanted to provide the opportunity to build a longer career without feeling like you're on a funnel path to copywriter or art director."

Another key, says Hoffman was to not relegate digital types to execution, and to make ideas and execution a more collaborative, holistic exercise. "In the past we've been accused of passing things off to the interactive department," says Hoffman. "Now, we don't use different departments as our executors; we're all collaborating and ideas can come from anywhere."

The agency's creative renaissance wasn't restricted to the creative department; managing director Tom Blessington says the agency also worked over the last few years to ensure its planning approach was equal to the creative task at hand."We had the epiphany that if we wanted different answers we needed to ask different questions," says Blessington. "We re-engineered our communications planning approach and made sure that it reflected not only planning insights but media insights and digital insights and brought them all together to ensure we were encouraging creatives to develop that conversation with consumers."

Among its many experiments with content and new structures, the agency has devoted resources to exploring tech-driven IP. In 2009, the agency built a tech-focused business incubator, PIE (Portland Incubator Experiment). Housed in the Portland office, PIE employs tech entrepreneurs and hardcore nerds who experiment with new platforms and business models, both on behalf of W+K clients and independently. Gleeson oversees the operation from the W+K side and Rick Turoczy from the PIE side. "Portland has a large base of digital talent and we thought this was a good opportunity for them to find ways to collaborate with them," says Blessington. "Giving them space seemed like an easy way to do it."

Wieden says it's hard to pinpoint when things started to change at the agency. But with Tait in place, "there was an infiltration of new thinking at all levels," says Wieden. "We were working both from the ground level position up to the global management position. It wasn't a second cousin to what were were doing anymore. And to have people like Renny who were talking not only inside the agency but to clients, that helped move the work to interesting places." Suddenly it swept through the agency fairly dramatically."

The agency isn't a finished product though. "I think we have a lot of new ground to cover because the whole economic model is still up in the air," says Wieden.

But digital agency of the year or not, Wieden says he's proud of way the agency pulled together and how it "found a way of evolving without throwing overboard the skill set that made us unique."

"In any company you go through a period of thinking, this is not like the good old days," says Wieden. "Well, the good old days were never s good as this last year."