potlatch design series annual reports

7/28/2019 Potlatch Design Series Annual Reports

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A N N U A L R E P O RT S , V O L U M E 3 I N TH E A M E R I C A N D E S I G N C E N T U R Y S E RI ES , IS P R I N T E D O N P O T L A T C H

K A R M A , A FAV O R IT E O F C O R P O R AT E C O M M U N I C A T O R S F O R M O R E T H A N A Q U A RT E R C E N T U RY. T H I S

P R E M I U M M AT T E - C O AT E D S H E E T C O M E S I N T W O V ER S ATI LE S H A D ES - B R I G H T W H I T E A N D W A R M

N AT U R A L . A s Y O U T U R N T H E S E PA G E S, N O T I C E H O WK A R M A ' S H I G H LY O PA Q U E , N O N - G L A R E S U R FA CE

C A P T U R E S I M A G E S I N V I B R A N T D E TA I L Y E T I S E A SY O N T H E E Y ES E V E N W H E N R E A D I N G F I N E P R I N T.

L I T T L E W O N D E R T H AT K A R M A I S O N E O F T H E M O S T S P E C I F I E D PA P E RS F O R A N N U A L R E P O R T S .


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inancial annual reports have been around

in one form or another for hundreds of

years pre tty m u c h for as lo n g as th ere

have been investors interested in how

thei r money was be ing managed. But in

20th century America , two events shaped annual repor ts

as w e t hi n k of th e m today. T h e first was th e U .S. Secu rities

E xc ha n ge A ct o f 1934 , passed after th ecatastrophic stock

market crash of 1929. It mandated that all publicly traded

companies had to make yearly financial disclosures to

their shareholders. T h e seco nd defining event oc cu rre d

at the da w n of the '60s, w h e n let ter press p rin t in g gave

way to photo offset l i thography and hot metal type gave

way to photo composit ion. Flexible and fast , these newtechnologies made it affordable and possible to introduce

color photography and graphic e lements in to corpora te

brochures . Co m panies se ized the o pp or tu ni ty to "p igg y

ba ck " a m arket in g message on to the ann ual repor ts that

they were required to send to key consti tuents anyway.

From the '60s forward, annual reports exploded with


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colorful photographs, graphic images and visual themes,

and these once-dry documents took on the personal i ty of

the individual company Graphic design drew readers in to

the repor t , co m m un ica ted corpo ra te cu lture and exp la ined

management strategy in a l ively, compelling way It sti l l

does . In fact , the term "shareholders report" is kind of a

misnomer, since most companies print at least two to

three t imes m or e copies than they have s tock holders . T h at

suggests a distribution and use that goes far beyond finan

cial rep ort in g. E ach year thou sand s of ann ual repo rts -

13,577 in 1998 alone - are fi led with the U.S. Securities

and Exchange Commiss ion , and tha t doesn ' t inc lude the

thousands more produced by nonprof i ts and other ent i t ies

that do not have to file w ith th e SE C . For designers ,photographers, i l lustrators and printers , an entire industry

has gro w n u p a rou nd annual repor ts . In V olum e 3 of the

American Design Century, we look at a smal l sampling

of some of the best annual repor ts produced in the 20th

centu ry. T h e emp hasis und erstand ably is o n th e past 40

years w h e n annual repor t s bec am e a v isual m ed iu m .


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An Interview with B. Martin Pedersen

Publisher and CEO of Graphis P ress, B. Martin Pedersen has headed this international

publishing firm since 1985. In addition to publishing one of the world's foremost visual

arts magazines and a wide range of art/design books, G r a p h i s produces a prestigious

biannual annual report competition. Prior to Pedersen's acquisition

of G r a p h i s , he was a principal at fonson Pedersen H inrichs &

Shakery, where he designed many awa rd-winning annual reports,

magazines and corporate promotions. He is a mem ber of the A rt

Directors Hall of Fam e and the Alliance Graphique Internationale.

Q. Graphis has sponsored an annual report competition and produced a bookon annual reports for many years. When did this start and why were these financial

documents of interest to a design publisher?

A. M y predecessor, Walter Herd eg, wh o foundedGraphis, started that in 19 71, no t too long

after the m od er n annual rep ort came in to bein g. W ha t interested Walter, and still interests

Graphis today, is that annual reports involve a broad cross-section of the best talent in the visual

arts industry designers, pho togra phe rs, illustrators and typograp hers w he n they w ere still a

distinct profession. As a category, annuals are also of prime aesthetic interest to our readers.

Annual reports are unique because whether they are for a multi-billion dollar conglom

erate or a small public concern, they all must communicate the same basic information

w h o the com pan y is, w hat it does, ho w it is doing financially,

and w he re it's goin g in the future. W hat's fascinating is

the myriad ways that designers address these points and how

they manage to come up with fresh, original, company-

specific solutions each year.

Q. Like many people, you use the term "modern"

annual report. Could you define what you mean by modern

and what the typical annual report was like previously?

A. By modern, we are talking about annual reports that make

strategic use of design as a marketing/public relations tool.

When you look back on annual reports produced prior to the

mid-'50s, they were non-visual financial documents a letter

to shareholders, financial statements and n otes, brief summ ary

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Before acquiring Graphis Press, MartinPedersen designed a number of award -

winning annual reports. Amon g his long

standing clients was Dow Jones & Co.

for whom heproduced annual reports for

nearly a decade.


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Every two years Graphis hosts an

annual report competition and show

cases the winning designs from around

the world in a hard-cover book.

of ope ration s, and a listing of officers and directo rs, jus t th e facts

that the S EC required th em to disclose. Th at doesn't m ean that

good corporate design wasn't being produced. Look at the com

mercial posters and advertising images being created by designers

like Herbert Bayer, Lester Beall, and others at the time.It's just that

no one saw the annual report as anything but a financial doc um ent.

Q. So when did the annual report start

becoming a corporate communications vehicle?

A. Early signs of what it is today began appearing in the mid-'50s.

Today Paul Rand's 1955 annual report for IBM may look dated,

but back then i t was cutt ing-edge. Rand was brought into IBM

by its president Tom Watson Jr., w ho asked him to head a new graphics progra m . R an d

immediately brought a responsible design sensibility to IBM's annual reports and promotional

literature. H e hired leading photojournalists to take pictures for the reports. H e p ut a color

pho tog rap h on the cover, introdu ced the use of wh ite space and switched over from a cheap

paper to a quality coated stock. For its time, the impact was dramatic.

Another memorable annual from that period is the one that Erik Nitsche did for GeneralDy nam ics in 1 958. Nitsc he illustrated the c ompa ny's business lines by com bin ing beautiful

black-a nd-w hite photograp hs of airplanes, rockets and submarines, with short-sheet color

pho togra phs of abstract industrial designs. Even by today's standards, that re por t is w ond erful

ly sophisticated and fresh.

Q. The reports you mention pre-date th e 1959 Lit ton Industries book designed

by Robert Miles Runyan, who is often called the father of the modern annual report.

Why was Runyan's Litton report considered groundbreaking?

A. W ha t mad e Litton's report uniqu e was that Bo b Ru ny an developed a m ore sophist icated

visual theme to posit ion the companystrategically.You have to remember that Lit ton had

only been founded about five years earlier a startup by today's definition and didn't have

much o f a track record to show for itself. I t needed to develop a corporate presence. Bob

presented readers with Litton's goals and aspiration by combining inspiring symbolic still life

photog raphs w ith m arketing promises. Th e the m e implied technological leadership and

sound financial management without focusing on the present. It was a message intended to

reassure employees and customers as well as shareholders. It wasbrilliant.The Lit ton book


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Although the majority of annual reports produced in the late 1800s and

in the early part of the 20th Century contained little more than finan-

cials, there were a few wonderful exceptions, including this1860 Central

Park annual report featuring a fold-out map of the park.

was a visual eye -open er to the design comm unity. It helped C EO s, com m unica tions

managers and designers see how an annual report could be used to build what we now

call a brand identity.

Q. Were there other reasons why annual reports began to play a larger communications role?

A. The fact that annual reports came out annually and had to be distributed, by law, to

investors, financial analysts and oth er im po rta nt audienc es m ade it practical to add a few

m ore pages for an editorial message. C om par e that to corpo rate broc hures, w hic h often get

bogged down in production for lack ofa fixed deadline and then get used for years until

the inform ation inside becom es em barrassingly ou tdated. W ith annual reports, the SEC

filing de adline forces decisions to be m ade and to p executives to give it priority. As a result,

the con tent is perceived as m ore timely and authoritative. T he fact that annua l reports are

regulated by the SEC also adds to their credibility.Q. What impact did the modern annual report have on the design industry?

A. It enabled graphic design to grow into the profession as we k no w it today. T he m arketin g

potential of annual reports encouraged companies to allocate sizeable budgets for top pro

fessionals and for the best pro du ctio n value available. W h e n yo u loo k at the tho usan ds of

annual reports prin ted every year, you can see how they have spawned an entire industry,

supp orting designers, pho togra phe rs, illustrators, printers an d paper co mp anies. Before m od

ern annual reports, the graphic design profession was called commercial art. In fact,Graphis

started out as a commercial arts magazine. Its contents were about displaying graphic art,

and what that meant wasfine graph ic art prints by t he likes of Vasarely, M u n c h and Picasso.


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Q. Have annual reports set any design trends?

A. Absolutely! Some of the most innovative design produced over the past several decades

appe ared in a nnu al repo rts. Th is started wit h early design giants like Paul R an d , Saul Bass,

Dick Hess, Arnold Saks,Robert Vogele, George Tscherny and Chermayeff & Geismar, who,

in turn , hired som e of the leading pho togra phe rs and illustrators of the tim e. Tog ether they

established a model for what annual reports are today

Q. Could you name some of the major influences on annual report design over the years?

A. O f course, B ob R un ya n and Erik N itsche showed us the visual possibilities of annual

reports. Con sistently good annua l repo rt designers like Jim B erte and G ary He nc he cam e

ou t of Runyan s Los Angeles studio and are still doing goo d w ork today In the '70s and

'80s, Jim Cross did a nu m be r of elegant annual reports for No rth ro p, featuring som e am azing black -an d-w hite p ho tog rap hy In the '70s, illustrator and designer Dic k Hess was respo n

sible for giving a family look to C ha m pio n Interna tional ann ual reports. W h e n yo u stacked

them on the shelf, they looke d like a bo ok series, but each had a uniqu e m essage in her ent

to the company's performance that year. Co rpor ate Graphics Inc. and C orpo rate A nnual

R ep or ts also had strong influence du ring the '70s and '80s, and built their com panies and

reputations creating un iqu e annual reports for Fo rtun e 500 c om panies. Kit Hinr ichs has also

had an enorm ous influence on annual reports , with his wo rk for W arner Co m mu nication s,

Immunex and his brilliant encyclopedic series for Potlatch. Over the past 20 years, Greg and

Pat Samata have also contributed enormously to the annual report field.

Q. How has annual report design changed inth e '90s?

A. In the '60s, '70s, and '80s, ther e we re established looks tha t we re

maintained, refined and developed. In the '90s, design is all over

the p lace. T he re is no lon ger a single design m od el. A lot of

younger designers have gone beyond being influenced by each

othe r and are doing the ir ow n things. W h e n they are brilliant at it ,

they are amazing. I particularly admire the imaginative reports

produced by Cahan & Associates. I'm awed by and supportive of

the young generation of designers who are taking risks andc o m -

The stock market crash ofnig up with original concepts that merge tine art and the new

1929 instigated a demand for

techn ologies . To do that w ithin a pe rio d w he n there is no specific mandatory annual financialreports to stockholders and led

loo k and fashion is t ruly crea tivi ty at a highly de m an din g level . t0 the creation ofthe Securitiesand Exchange Commission.


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Q. Are annual reports always a reflection of the CEO?

A. Annual reports have been called the CEO's report card, and certainly, they always contain

the C EO 's letter to stockholders. In most cases, the a nnual rep ort m essage is driven from the

top, even though the production process is supervised bya corpora te communicator.

Sophisticated C EO s kno w that their ideas, achievemen ts and vision can't be com m unic ated

strictly thr ou gh h ard num be rs. Th ese messages are conveyed m or e effectively a nd persua sive

ly thro ugh design, image ry and well-w ritten narrative tex t.

Q. Designers frequently express frustration that corporations are inherently conservative

and less willing to embrace groundbreaking ideas. From reviewing annual reports, do you

have any thoughts on how to develop a strong annual report?

A. Let's look at it another way. I believe that two-thirds of the design solution is likelytocom e from the clients themselves, but to o m any designers go into the first mee ting w ith

their own design solutions in place. O n e of the most impo rtan t ingredients of co m m un ica

tions is an ability to listen. A se cure desig ner listensto the client and the client, in many

instances, drives the brilliance of an original idea. This is especially tru e o f CE O s w h o have

to be creative and innovativein solving business problems. W h e n designers showa will ing

ness to listen, I believe that CEOs look to them to articulate their vision and expressit in a

way that is visually c om pellin g. Afterall, design

can give form, energy and emotionto corpora te

strategies. As Runyan's Lit ton report showed us,

design can gain attention and help readers appre

ciate corporate goals and aspirations, even before

a company has realized its full potential.

Q. Are annual report designs

evolving in this age of mass media?r Certainly, annual reports are reflecting the fact

that we have become a technology and informa

tion-based culture. In America today, the entire

working populat ion, including CEOs, has grown

up under the influence of television, some wereIn the late '50s, the General Dynamics and Litton

industries annual reports introduced conceptual even weaned on MTV. The media-sawy public istheme sections with rich color photography and

demonstrated to American business the marketing attuned tO quicker methods of communicationsvalue of these financial documents.

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As with m ost annual reports of

the time, IBM produced a minimal

docum ent in the 1920s. Just 6x8 inches in

size and only 8 pages long, the IBM annual report

included just a title page, letter to shareholder, directors

listing, balance sheet, incom e statement and auditor's report.

and to dealing with sophist icated concep

tual ideas. It is used to rec eiving info rm a

tion in sound bites and graphic form, and

impatient with long-winded stories and

disconnected words and images. Am erican

consumers have learned that it is possible

to be informed and entertained at the

same t ime - and they have come to

dem and i t. T he way annual reports are

being designed and information is being

presented is a reflection of that shift.

Ano the r in t e res t ing change i s tha t

some of the most daring annual reports

today are be ing created for startup co mp anies, wh ereas 25 years ago the most dyn am ic

reports were generated by Fo rtun e 100 corpo rations. A startup back then wo uld have

m ost likely put out a plain 10-K to conserv e cash. Today's startups un de rstan d the im po r

tance of bran d posit ioning and ho w m arketing can help them grow and at tract investors.Th ey are willing to risk mo re and allocate a significant p or tio n of their funds towa rd

creating a bran d identi ty throu gh their annual reports .

Q. With the rise of the Internet, many people are predicting the imminent demise

of printed annual reports. Any thoughts?

A, M aybe someday, but n ot in the nea r future. W ha t I do see hap pen ing is that com panies

will likely place an even greate r em phasis on th e so-called "front of the b oo k." Tha t's a

complete reversal of the original intent of annual reports a financial document with a sec

ond ary th em e m essage. Today anyone can go o nline and look at a comp any's earnings the

day they are anno unc ed . W hy wait weeks wh en you can access this informa tion instantly?

However, a printed piece is a tangibleobject.You can tou ch it, brow se th ro ug h it, read it at

yo ur leisure, toss it on yo ur coffee table and c om e back to it at a later time . A no th er adv an

tage for co mp anies is that they can actually pu t a pr int ed pie ce in front of readers, wh erea s

the W eb requires that peop le take the initiative and deliberately choose to visit a co rpo ra

tion's website. So just like T V hasn't replaced book s, I don't th ink W eb com m unic ation s will

replace the printed annual report. Most likely they will support and augment each other.


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Most companies begin introducing themselves

to annual report recipients right from the cover. Strong

visuals entice readers to open the book and provide

an opportunity to focus attention on the theme message for the

year. In 1 9 7 6 , H.J.Heinz proudly joined in the celebrationof America's Bicentennial by paying tribute to people across the

nation. The photographic essay by Art Kane begins on

the cover with a picture of a high school graduating class of

7 6 . The report was designed by Harrison Associates.


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Cahan & Associates used

bright solid colors, clean

geometric shapes and

simple sans serif typography

to reinforce the meaning

of the company name and

turn the cover of Rational's1996 report into a bold

piece of modern art.

T H E L. J . S K A G G S A N D M A RY C . S K A G G S F O U N D A T I O N A N N U A L R E P O RT

K

Nonprofit organizations as

well as publicly traded

companies produce annual

reports. In the 1987 report

for the Skaggs Foundation,

Vanderbyl Design featured folk

art objects to draw attention

to the Folkart/Folklife Program

funded by the Foundation.

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Chase Manhattan Bank 1968

Micom Systems Inc. 1983

Hupp Motor Car Corp. 193 8 Puget Sound Power & Light Co. 194 4 General Foods 1949 Transamerica Corporation 1950

The Ansul Company 1961 Westinghouse Electric 1978

"ENT OVER 1971. THEOR PART OF THIS IM

PROVEMENT CAME FROMG A I N SI N O U R C O N S U M E R

TED PRODUCT LINESW H I C H A C C O U N T E D F O R

..:- p-; .--.- ;-..: -. ::CENT OF 1972 EARNINGSC O M PA R E D W I T HONLY.20PER CENT TEN YEARS AGO.

Scovill Manufacturing Company 1972

iircwo

cs

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known for presenting

conceptual ideas with a

humorous twist as shown in

the 1992 report for Herman

Miller Inc., which featured

a theme on Perspectives.

While most annual reports

are produced by outside

design firms, Herman Miller's

award-winning reports have

been done by in-house

designer Steve Frykholm

for more than 20 years.

Eli Lilly and Company 1982

Illustrations have long

been a favorite means to

communicate broad

concepts. Robert Guisti's

bull painting highlighted

animal genetics in Eli

Lilly's report, designed

by Corporate Graphics.

Jack Unruh's fanciful

drawings accompanied

children's essays about

the future in the Lomas

& Nettieton Mortgage

Investors report, designed

by Richards, Sullivan,

Brock & Associates. Vin

Guiliani's collage-

assemblage visualized

automotive market share

in Scovill Manufacturing

Co.'s report, by Corporate

Annual Reports, Inc.

- x-

mm

Lomas & Nettieton Mortgage Investors 1977

Scovill Manufacturing Company 1969

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UALORT


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< During the '90s, Cahan &

Associates has made creative

use of unusual techniques to

drive home their clients'

message in unforgettable ways.

Here, two die-cut holes that

run through the entire 1996Heartport annual report

underscore the point that the

company's system of making

two small incisions between

the ribs is a less invasive

alternative to conventional

open heart surgery.

Group 243 Design

chose a fun and youthful

way to reinforce brand

awareness of the Domino's

Pizza name. It tucked

the company's 1983

financial message inside

in a dominoes game box.

4 1


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Transamerica's Pyramid >

headquarters is not only the

company's corporate symbol, it

is one of San Francisco's most

popular tourist attractions. To

celebrate the Pyramid's 20th

anniversary, Pentagram designeda 33-inch high pull-up cover

that called out interesting facts

about the landmark. The theme

inside called out interesting

facts about the company.

M A I N P L A N T C O M P A N Y D E T R O I -

Prior to the mid-'50s, few

companies took an editorial

stance in their visuals.

Pictures of their facilities

were presented simply, in a

"bricks-and-mortar" style,

with no attempt to interpret

the business. The drawing in

Pfeiffer Brewing Co.'s 1950

report is an exceptionally fine

example of this approach.

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EH HEW BRANDS, RAISING THE COMPANY'S TOTAL DOMESTIC ANDINTERNATIONAL BRAND:

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Sometimes the most impressive and understandable

way to present a broad assortment of products is by arranging them

into a pleasing pattern. Using photographs shot by Michael

Deuson, VSA Partners organized Smithfield Foods' packaged meats

into a colorful design of interesting shapes and sizes.

The 1974 Seagram Company report, designed by

Arnold Saks Associates, opened onto a five-page foldout photograph

of Seagram products, with the reverse side showing more of

the same. Photographer Phil Marco shot this impressive display by

arranging the bottles in a staggered pattern on a light box.


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Before Photoshop, complicated photographs required

expensive retouching to assemble. For Castle & Cooke's 1984 report

designed by Jonson Pedersen Hinrichs & Shakery, photographer

Tom Tracy created an elaborate still life display on a soundstage so he

could shoot the company's produce products from 20-feet above.

v

Qua ntity - not just product assortment - w as the visual

message in this photograph in Sunshine's 1945 annual report, which

talked about the nearly 200 million packages of cookie

and cracker products sent to military PXs during World War II.

v

than 190,000,000 packages-X's alone shipped betweenHarbor and Hirohito's surr, A ug. 1 4, 1945in additionr rations. Sunshine has gonevery corner of the world


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H.J. Heinz Co. 1974

Arnold Saks transformed

the look of annual report

photography in the '70s -

first by his use of strong

photographic "icons" of an

industry and then by

partnering with printers to

produce color separations

that would enable higher ink

densities on a sheet. Gary

Gladstone's photograph for

the 1982 Colt Industries

report is representative of

Saks' richly saturated style.

H.J. Heinz Co. 1976

During the '70 s, H J. Heinz

commissioned some of the

best-known editorial

photographers in the world -

from top, Bruce Davidson,

Art Kane and Jay Maisel -

to shoot for its annual

reports. The 1974 and 1976

reports were designed by

Harrison Associates. The

1979 report was done by

Corporate Graphics Inc.

H J . Heinz Co. 1979

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4 8

For the 1996 and 1997

Swiss Army annual reports,

SamataMason designed

double-cover "form and

function" books. Opened

from one side, the books

showcase product forms

in beautiful photographs.

From the other direction,

the books feature the

functional side, presenting

the letter to shareholders

and financial information.


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