Before Pitney Bowes redesigned its postage meter products, it first had to redesign its culture. Where previously, in-house designers focused on pleasing their "internal" customers, today they, along with the rest of the company, are united in providing consumers with cutting-edge designs that match Pitney Bowes' cutting-edge technology.

Listed in Business Week's annual tribute to the companies producing the most progressive product design last year was a name that once conjured up all the dull but durable characteristics of post office bureaucracy coupled with back-office obscurity. Pitney Bowes. A company that virtually created the postage meter industry in 1920, Pitney Bowes has long been respected for functionality but not for aesthetics.

Look again. Over the last couple of years, Pitney Bowes' gawky, workhorse machines have undergone a sensual transformation as the company turned itself into a $3.9 billion global paper/digital hybrid. Although best know for its postal meters, today it also makes complex modular units, including one that automates every step of mass-mail generation. Soon it even expects to offer customers the option of document distribution directly through fax and e-mail. The holder of more than 3,000 patents, Pitney Bowes is ranked among the top 200 companies worldwide granted patents over the past ten years.

As the dominant player in the postage meter business, however, Pitney Bowes had little market incentive to distinguish itself through a more sophisticated look. So why is it now lavishing attention - and retooling expense - on creating sleek product designs?

"Some years ago office product design didn't matter that much," admits John Moody, president of the Pitney Bowes' Mailing Systems Division. "Now it's becoming increasingly important as we see our customers respond as much to the design of the products as to their functionality. It's not possible to persuade our customers of our technologically advanced products if the design appearance and user interface don't communicate that."

That point wasn't so obvious at Pitney Bowes eight years ago, when Paul Porter was brought in from Wang Laboratories to head the in-house design department. Porter quickly discovered that even though Pitney Bowes was as focused on leading-edge technology as the computer industry, its image had changed little from the time when customers had to lug its heavy postage meters to the post office for refilling. "The company has always appreciated the value of design enough to invest in a large in-house design organization," says Porter. "But it didn't understand what the real focus of those efforts should be. As in many companies, the in-house designers targeted the internal customer - marketing and manufacturing. We had to shift our thinking toward the outside customer."

First, however, the department had to change itself. Traditionally hired for their category experience, the designers were encouraged to think "outside of the box" and embrace all possibilities. Porter's directive was: "Don't look at what our competitors are doing. We want to create the best solutions of any industry."

Pitney Bowes' industrial designers started to experiment with pure form through computer simulation. Its graphic designers, previously limited to packaging and labeling, were assigned to develop screen graphics, working with human factors engineers to enhance user interface. That partnership has resulted in greater emphasis on color as an organizational tool in guiding usability features. The company's plastics technology unit was also brought closer to the design department and asked to function more as product designers, collaborating with the industrial designers. Together they work out the details of the complicated surfaces being produced. Pitney Bowes' new multidisciplinary approach, integrated among all skill sets, is a major contributor to its current design success.

Now if we hire an industrial designer, we make sure the designer has a sensitivity to engineering and manufacturing," Porter says. "When we hire a plastics engineer, that individual has a sensitivity to design. We have to want to learn about what everyone else is doing and how that expertise is going to make our overall product designs better."

One other important function had to be integrated into the product development cycle: the marketing department. With functionality the primary criteria guiding product creation in the past, the company's sales and marketing staff had been at the front line of consumer feedback. As a result, marketing began to dominate design decisions. "The focus of design had been the satisfaction of our marketing people," Porter recalls. "Undoubtedly, that's important. But we also had this external customer that we tended to forget."

This point was underscored to Porter at an early meeting when a member of his team posted different sketches on the wall while marketing reps critiqued them. From there, the designers cobbled together an incongruent, final solution with little stylistic effect. "Part of the reason past product designs were so functionally based was because our designers didn't have enough organizational credibility to push the envelope," Porter asserts. "The thinking was: If a design element didn't look like it was contributing to the performance of a product, it was superfluous."

In 1995, the design department posed its first challenge to such t time, Pitney Bowes intended to sell a product through national TV advertising and retail outlets like Staples. Told that his designers didn't have the flair to carry off such a high-profile launch, Porter offered up his own job if his team failed to produce a winning design. His in-house team won and came up with a handsome, simple solution that dispelled preconceptions about postage meters. The aesthetics make the machine an attractive desktop fit in home offices and it has become one of Pitney Bowes' hottest new products.

Visuals, of course, are just one of the challenges facing the company's designers. In developing the DocuMatch mail system two years ago, they had to create a user-friendly appearance for a complicated machine that takes inserts through multiple processing stages to enclosure in a final addressed, metered envelope. More recently, Pitney Bowes has used design to underscore technical enhancements in relaunched products. The forerunner of the company's Spectrum 5 Series Folder/Inserter system had reliability problems. In retooling the upgrade, the 5 Series had to convey the personality of a new product - for customers with short memories - while utilizing many of the existing covers from the angular, undistinguished predecessor. The new design features flowing lines that cascade from module-to-module, giving the system an ultra-contemporary look. It also serves as visual sleight-of-hand, correcting surface height discrepancies that occur because of the way the components are assembled.

Similarly, with the new Galaxy mail processor, the designers had to include many existing parts into a new aesthetic. As the industry's first removable, high-speed digital, inkjet postage meter, the machine had to look like nothing that came before it. To do that, the designers managed a seamless transition from the sharp edges of two preexisting lower covers to those of the upper curves. Galaxy's built-in scale is an unobtrusive set of slivers that emerge from the bed of the product, and subtle finger relief and texture offer operational guides. "It's not required functionally but it provides a nice cue to users that they're in touch with the right area," explains David Beckstrom, Pitney Bowes' manager of industrial design.

Those buying the company's products are responding to that level of detail, but equally satisfying to Pitney Bowes' designers is the new recognition from their colleagues in marketing. "We look at our competition and depending on product lines, their products look very outdated," says Clint Dally, marketing manager of mail finishing and paper handling. "Not only is their design outdated, so is their hardware. We're using aesthetics to underscore our superiority, to add value to our products and show we are continuously furthering product development."

None of which surprises Porter, who was recently promoted to director of New Product Development. As the first designer ever given that post at Pitney Bowes, he recognizes the strategic value of design in the company's overall business mix.

"Traditionally, if you asked our customers where aesthetics fall relative to other considerations affecting product selection, those values drop to the bottom of the list compared to reliability, performance, functionality, features or cost," he says. "Yet, I've always known if you show somebody a great design, they get excited. They have an immediate, emotional reaction to those visual elements."

Admitting that postage meters haven't been known for design, Porter adds, "It's easy to design for consumer acceptance in this market because what those customers are accustomed to is, frankly, pretty bad. We're trying to get to the next level of design excellence because our competitors today are not going to be our competitors tomorrow. We better be ready for that."