After a near-disastrous attempt to pursue a diversified operating strategy in the '80s and early '90s, Big Blue has come back strong by positioning itself as the preeminent provider of integrated network technology solutions. Design has been critical for communicating the company's revitalized image and unifying its products, technologies and services under the IBM brand

Think of the design giants of the 20th century, and there is often a link to IBM. Paul Rand created IBM's enduring blue-striped logo. Charles and Ray Eames made the company's films, exhibitions and museum installations..

Architects like Mies van der Rohe, Marcel Breuer and Eero Saarinen provided the vision for its buildings around the world. And Eliot Noyes shepherded early IBM product design.

Historically, IBM considered corporate image so vital to inspiring public confidence that it even enforced strict employee grooming and dress codes. For decades, the image of the IBM salesman, sharply uniformed in suit and tie, symbolized professionalism and corporate pride.

Founded in 1888, IBM defined workplace technology in the 20th century, from the first large vacuum-tube computer in 1952 through successive advances leading to the first personal computer in 1971. The company stood for cutting-edge innovation, unequaled service and smart management. Small wonder that it became the darling of Wall Street, affectionately known as "Big Blue." So it was all the more stunning when IBM stumbled in the 1980s, appearing in danger of being toppled by hungry young companies nipping at its heels. More agile and flexible in marketplace response, clone manufacturers cut inroads into IBM's markets, making it look like a lumbering giant. A diversification strategy that let IBM divisions operate as autonomous units resulted in a jumble of products and branding approaches. IBM's identity became muddled. Design imperatives were lost in bureaucratic malaise.

Then, in the darkest hour, the sleek handsome ThinkPad appeared. Its launch in 1993 was the only hopeful sign in a year where IBM posted a loss of $8 billion, cut its dividends for the first time ever and saw the resignation of chief executive John Akers. The new CEO Louis Gerstner, brought in from RJR Nabisco, moved quickly to build on IBM's strengths - its size and breadth, which, he argued, would allow the company to offer complete solutions rather than individual hardware and software products.

"Design's been a big part of the repositioning of the IBM brand," says Lee Green, who coincidentally became director of corporate identity and design the same day Gerstner joined the company. "Lou Gerstner's appreciation for a strong brand value and what design contributes to that is quite clear. He's very much elevated the role we can play at IBM." Green's predecessor Tom Hardy had earlier instigated design revitalization efforts, but was hampered by the autonomy of each operating division. With Gerstner's endorsement, Green had a strong mandate to move forward.

"If IBM was going to survive and thrive, we knew it would have to act and look as one company," says Green. That meant total analysis of IBM's brand image across the board. With market research showing that a significant number of people who buy the ThinkPad choose it for its design, it was clear that one of the company's most pervasive indicators of corporate identity was the look of its products. Green reviewed all of IBM's disparate offerings as well as those from competitors. Ethnographic research revealed interesting feedback. Employees at banking and insurance companies, for instance, complained that their customers' view of IBM was the unattractive back of a computer that often impeded eye contact. Green staged "A Week in the Life of a PC" so IBM designers could observe the complete manufacturing and delivery process, starting on the assembly line, and commissioned an outside benchmark study to gain insight into the programs of competitors.

Over the past three years, IBM designers have used that input to coordinate a more integrated look across products, packaging and on-screen tutorials. IBM's array of bulky nondescript beige boxes, enmeshed in a spaghetti-like twist of wires, gave way to sexy black machines offering new ease-of-use interfaces and ultra-thin monitors. Fiery red and lime-green accents glow against the machines' black surfaces.

IBM's new Aptiva SE7 - code named Cobra - has been described in an Internet review as having "a sleek, black style from the Darth Vader school of design." From a competitive point of view, the reviewer noted, "It looks like it would beat up the cuddly iMac before school and take its lunch money."

Bob Dies, IBM's general manager of network and personal computers, goes one step further, describing the company's new design sensibility as one that emulates the look of the Stealth bomber. Futuristic allusions to battle are appropriate. IBM's Aptiva line is now No. 3 in the worldwide PC market, lagging behind upstarts Dell and Compaq. "We used to approach our product design as either the way to invent a product or modify it," says Dies. "We never paid much attention to design, and in hindsight, that was a big mistake." After heading up a couple of IBM divisions, including AS\400 worldwide, where recent product redesign made an immediate impact, Dies exclaims, "We won some awards, got lots of press, lots of consumer reaction. It was amazing and it didn't cost us any more."

While the overall look of such machines is vastly improved, functionality was also a major push for IBM designers. "The best way to distinguish yourself in a commodity market is to make things like interface, controls, buttons and keyboards more intuitive to the user," Green says. "It's not just about cosmetic enhancements, it's also about improving the total user experience."

That attitude has been extended to those who install and service the machines. New features include replacing bolts with simple-to-remove tabs allowing easy access to circuits. Previously bolted media bays are now designed to swing up. Longtime IBM design consultant Richard Sapper - the Milan-based father of the ThinkPad - is working with the company's in-house design group on revamping IBM's products..

IBM has also hooked up with schools like MIT and Milan Polytechnic to develop new interfaces and product applications. Green, borrowing a term from the automotive industry, calls this experimental work his "concept cars." They may well become the vehicles to drive Gerstner's redefinition of IBM's mission. Some of the new products explore function-specific consumer applications, like the lightweight personal electronic newspaper panel. Other executions include a compact desktop at-home banking unit. "These are just some of the potential advantages of a networked world," reflects Green.

Which is exactly what Gerstner has in mind in pursuing a "network-centric computing" strategy, where IBM's large mainframe servers manage and distribute data networks and the Internet to computers of any kind. "We're reaching an interesting inflection point," Gerstner says, "one where information technology becomes much more than a computer on a desktop that forces you to type in order to interact with it.

The technology is crossing into true ubiquity, finding its way into everything from automobiles to machine tools and household appliances - in effect, disappearing into the fabric of our day-to-day lives. As today's notion of 'computers' is replaced by these pervasive 'computing devices' there's a new premium on design as an aspect of competitive advantage."

That attitude about IBM's future brings the company back to the great design legacies of its past. Over 35 years ago, IBM chief Thomas Watson Jr. - son of the company's founder - argued his commitment to design. "In the IBM company, we do not think that good design can make a product good, whether the product be a machine or a building or a promotional brochure or a businessman. But we are convinced that good design can materially help make a good product reach its full potential. In short, we think that good design is good business."

One of the company's biggest recent initiatives is the creation of the new e-business program, IBM's first new identity since Rand's original corporate mark. Although IBM is a dominant player in Internet solutions, the company found it had low share of mind among Net users. This was a major concern since IBM is seeking to expand its image beyond its perception as a hardware manufacturer. Equally important is the company's presence in the exploding area of software and Internet service. Launched a year ago, e-business's association with IBM customer web sites is drawing swift response. Developmental research showed that more than 42% of those polled said they are more inclined to do Internet transactions on an IBM branded e-business site.

This program turned out to be successful faster than we even guessed it would be. It's a great example of how design can provide value-added services," says Green. "It also shows the benefits of our new collaborative approach between marketing, multiple ad agencies, Internet divisions, research teams and design."

IBM used the Summer Olympics in Atlanta to unveil its bold graphic approach. Poster-like images of athletes and the Olympic torch are superimposed against Rand's blue bars. That's not the only allusion to Rand. IBM product screensavers are a playful recreation of the designer's rebus of the company name. "It presents us as more human, more whimsical, more approachable," says Green.

In some of its new black-and-white print advertising IBM even comes off as the computer industry's equivalent of a hip fashion marketer. For its Intellistation Tower PC and new flat panel monitor, the ads use striking, minimalist product shots. Even ad placement suggests a new kind of downtown cool for the company, with outdoor posters slapped on urban walls next to ads for the latest hip-hop group or cutting-edge club. "These ads have an attitude and edge consistent with the personality of the new product design," says Green.

Even the company's packaging and graphics signal a new aggressive attitude through bold color. Gone is the company's wan white packaging with an indistinct IBM logo and cluttered black type describing product features. New blue stripes - which play off of the logo - work on store shelves from a distance.

For the first time, IBM has integrated a consistent, unified retail look across all of the company's Personal Systems Group's product lines and in all geographic markets. "We feel strongly about leveraging brand elements first introduced with the Olympics," explains Green. "We incorporated the IBM logo because we know we have so much equity in the bars. It's immediately identifiable to customers."

This is increasingly important to how the marketplace is changing. "As we get more into a commoditized business, it's important to ratchet up the design element to differentiate yourself," he says. "At some point these things are going to be sold in supermarkets."

"Design has acted as both differentiator and means of corporate integrator," observes Green. "Our distinctive look allows us to stand out from competitors. At the same time, our unified approach has become a huge advantage over companies who don't have such a single-minded vision."

That advantage has quickly become apparent. In each of the past three years, IBM posted record revenue and increased profits. Its share price has more than doubled. Long gone is the design obscurity of the early '90s. Earlier this year, the company swept the Industrie Forum (iF) in Hanover, Germany, taking away 13 awards. Recognition in the rigorous competition put IBM in the ranks of previous winners like Mercedes-Benz, Braun and Sony.

This year's IBM annual report heralds the company's renewed appreciation of design. Under the headline "The End of the Computer," the report shows concepts that look more like attractive consumer products than computers. Instead of the usual discussion of keyboards and monitors, the report describes a future based on "embedded intelligence" which consumers will encounter in a number of ways. IBM used its report to visually depict a less uptight corporate identity as well. In stark contrast to the dark-suited IBM salesman of yesteryear, young, casually dressed employees "mug" playfully for the camera with not a business suit or briefcase in sight. Proclaiming this optimistic image "the new blue," IBM has once again returned to a course where design is the emblem of its strategy of innovation.