Annual Reports – Get Me Rewrite!

How one design firm adds creativity to business’s most predictable document: the annual report.

Spring is annual-report season — the time of the year when public companies spend big money on glossy documents that gloss over tough realities and make readers’ eyes glaze over. Most annual reports showcase business at its worst: dull, clichéd, uninspired. So companies that want to operate at their best — companies that are redefining how to play the game — are reinventing what annual reports say and how they look. And many of those companies are turning to the design firm of Cahan & Associates.


“Who says annual reports have to be 8 1/2-by-11 inches?” asks Bill Cahan, 44, the firm’s founder and president. “Who says they have to start with a letter from the president? Who says they have to focus mainly on numbers? Annual reports need to evolve: They need to become more interesting and more entertaining. Otherwise, they won’t be able to compete for people’s attention.”

Cahan’s 16-person firm, based in San Francisco, is driving that evolution. It created an annual report for Network General that reads like a Boy Scout guide. It created an annual report for Adaptec that looks like a children’s book. It created one annual report — for Progenitor, a biotech company — that uses just one sheet of paper.

“Annual reports aren’t merely financial documents,” Cahan says. “They’re branding vehicles and statements of strategy.” Which means that they have to be honest: “I hate it when companies pontificate about their ‘core values’ — which are the same values that everybody else is pontificating about. I’m glad that you’re ‘global’ and ‘collaborative’ and ‘innovative.’ But what do those words mean? Tell it like it is! And if you’ve had a bad year, say so.”

According to Cahan, you can’t create new kinds of annual reports in the same old way. That’s why his firm spends three to four weeks in research mode before it begins to create a document. Sure, staffers interview a company’s CEO, COO, and CFO. Sure, they review analysts’ reports, white papers, and company presentations. But they also spend time with rank-and-file employees, customers, and suppliers. “We’re like archaeologists,” says Cahan. “We look and listen for the hidden kernel of an idea that will tell a company’s story — and tell it in a way that will engage people.”

Sometimes that story comes straight from the CEO. Sometimes it’s in a memo or a fact sheet, perhaps tucked away in a single line. Once, the marketing director from a fast-growing software outfit made an offhand comment that the company had received an amazing amount of press that year. Cahan drew on that remark to create the company’s annual report: It was published on newsprint, and it read like a newspaper.

There’s more than one way to tell a story, of course — which is why Cahan always assigns at least two designers to every project. Working independently, those designers create multiple options for each client to choose from. And annual reports don’t always have to look different to be effective. One of Cahan’s favorite projects was the 1997 annual report for Coulter Pharmaceutical Inc. The report isn’t avant-garde; in fact, it is stark in its simplicity. The cover features a black-and-white photo of a woman with the caption “June 22. I was supposed to die today.” Inside, a set of photos accompany stories about patients who were helped by Bexxar, Coulter’s cancer-treatment drug.


That design wasn’t any kind of radical breakthrough. But the night before the report was supposed to go to press, Coulter’s attorneys decided that the approach was too aggressive and urged the company to scuttle it. Cahan called Coulter’s CEO at home at 9 p.m. and got him to stick with the design.

“If you look at most biotech reports,” Cahan says, “you’ll see colorful photos of smiling patients playing with their kids. That’s not the reality of cancer. There’s a lot more to treatment than just being happy to be alive. We wanted to show the complex range of emotions. Our basic approach was honest — which is what made it edgy, even though the design itself was quite classic and traditional.”

What comes next for annual reports? Cahan predicts that they will become, well, less “annual.” At the very least, companies will use the core message that they develop for annual reports to help explain important developments throughout the year. Says Cahan: “Companies that are smart enough to understand how powerful an annual report can be will want to use that power more than once a year.”

Sidebar: One Company’s Story

Last year, Molecular Biosystems Inc. (MBI), a small biotech firm, asked Cahan & Associates to design its annual report. The company had developed several promising new products. Its challenge: How to explain those innovations to investors outside the small circle of money managers and Wall Street analysts who specialize in biotech.

An MBI product called Optison, for example, helps cardiologists to read echocardiograms — ultrasound images of the heart. With standard technologies, an estimated 20% of all “echos” are hard to interpret because of poor image quality. Optison allows for better imaging, helping doctors to make accurate diagnoses and to prescribe appropriate treatments.

To illustrate the value of Optison, the cover of MBI’s report presents three blurry pink-and-white photos, all difficult to identify. Inside are more hard-to-identify photos, along with captions that pose questions. One page features four fuzzy photos of the same woman and a caption that reads, “In which photo are the woman’s eyes closed?” Next to an unfocused shot of several dozen identical-looking cars is a challenge to “Select the white Ford Taurus.” The report includes a postcard that readers can use to respond.


The strategy behind the design: to help people understand the problem that MBI’s technology solves — long before the annual report tries to explain how that technology works. Did the design work? Cahan says that the proof is in the 700-plus response cards that MBI has received, many of which have come from institutional investors and analysts. “We’ve gotten the attention of some people who are skeptical by nature,” he says.

You can reach Bill Cahan by email ( or visit Cahan & Associates on the Web (