With consumer focus groups requesting a powerful yet portable storage drive that would hold all their "stuff," Iomega went back to the drawing board and returned with the colorful and friendly Zip drive, which has set a new standard in transportable data.

Stepping up to the podium at a design conference last October, Iomega CEO Kim Edwards shocked his audience by remarking: "Yup. Another formal namby-pamby academic presentation on the importance of design...success to be gauged on how many arcane awards were won from arcane magazines for beauty and elegance." Pausing, he growled: "The hell with that. I'm here to talk about the real world. The world in which competitors are lurking, poised to stomp your guts. And the consumers are sophisticated, highly discretionary buyers with plenty of choices on which to spend their money. And they don't understand nor want to understand your technology."

Edwards should know. Recognition of what the "real world" wants led Iomega to introduce the hottest computer peripheral in the marketplace today - the Zip drive. Compact, colorful and affordably priced, Zip is a refreshing departure from the usual bland beige-colored high-tech equipment. What's more, the success of the Zip drive, which provides transportable computer memory storage, saved the money-losing company from likely demise.

Edwards is credited for much of this turnaround. Before he joined the company in late 1993, he recalls receiving a copy of Iomega's mainstay product, the Bernoulli Box. Resem- bling a gray shoebox with a hole in the front, the storage unit could hold 150 megabytes of information on one disk - or the equivalent of 107 floppies - and operate 10 times faster. Trouble was, as Edwards quickly discovered, the 52-page manual was hard to decipher and its $500-$600 unit price and $100 disk price unlikely to attract impulse buying by consumers. One of Bernoulli's biggest customers was the U.S. Navy, which appreciated the fact that it was designed to withstand 14-foot swells and indirect military hits - not exactly a key selling point for typical consumers. To make matters worse, in the early '80s SyQuest Corporation grabbed much of Bernoulli's market with a cheaper, faster alternative that quickly gained popularity with Macintosh users, particularly graphics and publishing professionals.

By the time Edwards signed on with Iomega, the 13-year-old company had just reported losses of almost $18 million and its stock was at an all-time low. Edwards turned to Fitch Inc., the Columbus-based design company he had worked with in his previous job running Gates Energy Products' rechargeable battery business, for help. Iomega's survival clearly depended on a new product and Edwards was determined to introduce it at the November 1994 Comdex, the semiannual computer dealers' expo where the industry's hottest new products are unveiled. "We were given less than eight months to come up with a new product, identity and positioning to show at Comdex," recalls Fitch vice president Spencer Murrell. "Iomega simply had no choice. It was fast going down the tubes."

In fact, Edwards wanted a product that would not only take back share from SyQuest, but actually create a new market category, with Iomega laying claim to nothing short of the next generation of floppy disk replacement. Edwards explains, "Shifting the industry paradigm would not be enough; Iomega had to smash the paradigm. This is a segment that had measured itself in [only] hundreds of thousands [of unit sales] a year. Shifting would be gaining share from the competing types of removables. Smashing would be chasing the real opportunity."

So began the race. The short lead time to Comdex made it difficult for Fitch to implement its normal process of "discover, define, design and deliver." Instead, Fitch and Iomega found themselves thrown into all those phases concurrently. Even while initiating preliminary customer research to find out what users wanted in computer storage, Fitch was testing Iomega prototypes with focus groups. Led by indus-trial designer Murrell and graphic designer Jaimie Alexander, the Fitch team launched into a crash course about Iomega. They interviewed more than 35 Iomega senior management people, cutting across corporate disciplines; talked to buyers throughout Iomega's various distribution channels; and set up exhaustive focus groups which eventually connected the designers with 1,000 people using computers in Fortune 1000 companies, government and at home. "Part of our discovery process was to gather the information informally - asking a lot of questions of every knowledgeable user that we encountered," explains Murrell. Fitch was so determined to get an understanding of those computer user needs that, prior to focus group sessions, it provided disposable cameras so participants could document a day in their lives with technology.

The interviews provided a disturbing picture of Iomega's prospects. As things stood, the company had a limited customer base, and that market was showing signs of saturation. Portable computing was booming and Iomega had no product for the category. The company had virtually no retail presence. Perhaps most discouraging, people were bored by the idea of computer storage. "They hated it. It was like insurance. You have to have it, but who wants to think about it," says Alexander. "But where we found they got excited was in having their `stuff' near ready access. Data was an off-putting technological term. But they talked about their stuff the way they talked about the things on their desk and they really responded to the idea you could make it more organized, accessible and portable."

"Stuff," rather than data storage, became the rallying cry behind Fitch's brand positioning strategy and colloquial approach to design. It humanized Iomega and made for a powerful point of difference in an intimidating technology-driven marketplace. It spoke to a wide cross-section of people logging on, whether computer professionals, regular users or kids.

While much of that early research was invaluable in defining corporate positioning, other feedback from focus groups was causing sleepless nights. With the company already behind on product tooling deadlines, consumers told Fitch they hated the initial prototypes created by Iomega's engineers. The top-loading CD-player-like devices, they said, took up too much desk space and weren't easy to access the disk. Teachers laughed off the design, predicting students would have the lids ripped off in days. With about four months until Comdex, it was back to the drawing board, and Iomega's engineers didn't think it could be done. "When we questioned whether it was do-able, Kim made our options pretty clear," says Alexander. " `No Comdex, no company, no choice.' "

Edwards responds: "Product development is not an intuitive process. Of course this hurt morale at Iomega. Their first reaction was `You gave us a clean slate to work with and now at the eleventh hour there are parameters.' So we took key engineers to focus groups so they could see end users directly."

Clearly the tide had changed at Iomega and, given the overnight success of the Zip, perhaps hereafter in the larger computer industry as well. Iomega had changed from a technology-driven company where engineers determined the marketplace to a marketing-sensitive organization guided by consumer demand.

With little time left, the Fitch team - with its invaluable focus group research - scrambled to shepherd the design process. "It came straight from the consumer," describes Murrell. "They didn't like using the door design; they were much happier sticking something in a slot." So Fitch adapted streamlined versions of the Bernoulli Box, and for greater desktop efficiencies, made the designs usable standing or flat. They included a window so users would know if a disk was already in place. They made the drive units stackable with other new Iomega products. (While the Zip was Iomega's top Comdex priority, Fitch was simultaneously creating two other designs for the company's Jaz and Ditto products.)

Getting Iomega's engineers to back Fitch's designs was easy. Now came the hard part. "We'd worked out most of the troublesome details. It was time to address the big issue of color - subject of countless conversations, arguments and head shaking," says Murrell. "In many ways the industry ignores color. They say make it gray, beige or white, that's what consumers want and expect. We almost fell into that recidivist path until, in a late night fit of inspiration, boredom or whatever it was, we painted a model blue. We felt all along that it was critical for the Iomega products to stand out from their own environment. They had to make a statement that they were really different from the competition. The color clinched it."

Indigo for Zip, mauve for Jaz, forest green for Ditto. Having agreed to such a bold visual statement, there was little preventing Iomega from creating an unconventional identity in its communications as well. Even the Fitch team dropped their more conservative product-information-driven ideas to finally embrace ad agency Dahlin Smith White's tagline "Because it's our stuff." Alan Reighard, senior vice president/group account director at the Salt Lake City-based ad agency, says, "There may have been some hesitation but it was important that first year to develop a personal, aggressive brand personality. We had to change the perception of storage technology, which was old and boring."

Likewise, that personal, aggressive brand personality was expressed through Iomega's new logo, packaging, Web site and direct mail campaign. Even Fitch's naming of the brands, as Alexander describes "like dog names; something you'd like to bring home with you," reflected Iomega's new user-friendly corporate sensibility.

"Everything came together literally minutes before the Comdex show opened. It was amazing to see it all in one place," recalls Alexander. "Sometimes it felt like we had been a heartbeat away from failure."

Which hardly proved to be the case. After Zip's late 1994 debut, at $200 for a drive and $20 per disk, Iomega had the highest increase in share value of any stock on the NASDAQ, New York and American Stock Exchange in 1995. In less than three years, Iomega soared from $2 to $150 in real terms, before stock splits. There was an immediate backlog in orders and Iomega scrambled to ship one million units in less than 11 months. There are now more than three million Zip drives in use. The real challenge, of course, will be to maintain that momentum and convince computer manufacturers to install Zip drive units in their machines. Some companies, including Packard Bell, IBM, Acer and Hewlett-Packard, have joined with Iomega to include the Zip on high-end models or as a backup option.

Describing the Zip experience as "reinventing a company through design," Edwards adds, "I don't know how else you can sell in a consumer marketplace without understanding product design and usage. You have to know what the end user wants. The critical factors are aesthetics and usability, and how that interfaces with things like packaging, advertising, even price points. It's a very broad set of thought processes that affect one another." If Iomega is any example, those processes can have immediate, dramatic impact on a company - and an industry.

"People talk about repositioning a company as if it is only a marketing problem. The product is a big part of repositioning. The reality is they are one and the same," says Fitch CEO Martin Beck. "It's taken quite a while for senior management in corporate America to fully realize products and services are linked together. Kim Edwards understands this. You can change your world pretty quickly through product design. It's one of the most powerful tools to get your message across."