The Duane Reade store at 40 Wall St. is not your average pharmacy. The site of a former bank once owned by the Rockefeller family, the 22,000-square-foot space has 28-foot ceilings, recessed stone arches and gilded escalators (yes, that’s real gold).
Manhattan design firm CBX kept those elegant original features, but added splashes of bold color and used lighting to influence shoppers’ moods in different parts of the store. Along with such amenities as a sushi bar and a Starbucks, this Duane Reade has a hair and nail salon where crystal chandeliers emit a soft mauve-colored light.

The store design was one of many CBX projects—for big clients such as Del Monte, General Mills, Kimberly-Clark, Johnson &amp; Johnson and Lord &amp; Taylor—that have won the firm a slew of awards over the past couple of years.

CBX, launched by five partners in 2003, has grown so fast that co-founder and chief Gregg Lipman spends a lot of time these days “thinking about our company’s culture,” he said recently. The firm now has about 140 employees.

“It’s one thing to be innovative and spontaneous when you have a team of five people who can all read each other’s minds,” Mr. Lipman added. “But keeping the creative spark alive when you have 140 people is a little bit harder.”

A crucial way CBX does it, he said, is “straight talk. People have to trust each other, and then it’s not a problem to throw lots of ideas out there and talk about them. Let them get kicked around and beat up. That’s how ideas get validated. Those that survive that honest discussion are probably very good ideas.”

In his work with clients large and small, Mr. Lipman has observed two approaches to innovation that don’t usually work. In one, people he calls “process junkies” try so hard to structure and control innovation that they end up smothering it. In the other, blue-sky thinkers he calls “cowboys” have the opposite problem. They’re so resistant to formalizing any aspect of creativity that, in the end, nothing gets done.
“Real innovation happens when companies strike a balance between being process junkies and cowboys,” Mr. Lipman said.
Entrepreneurs usually dwell nearer the “cowboy” end of the spectrum, he observed: “Small companies have the advantage of not being overburdened by bureaucracy, but at the same time, startups often get overwhelmed by possibilities.” Without a clear answer to the question “Who are we and what are we about?” he added, “you risk diluting your brand before you’ve had a chance to build it.”

Among his big corporate clients, Mr. Lipman has lately begun to notice an interesting trend. Until recently, he said, “a company with an underperforming brand would try to put lipstick on a pig. That is, they’d keep the same brand concept but deck it out in new packaging or try some new ads.”

Now, however, some big companies seem “more open to rethinking a whole brand and changing their entire approach to a customer,” Mr. Lipman said. “So instead of asking us, ‘Can you design us a new package?’ they’re asking, ‘We have this business challenge—can you help us think through it?’

One example is Kimberly-Clark’s Kotex brand, which recently embarked on a total makeover, aimed at attracting young women ages 14 to 22. In focus groups and surveys CBX conducted, these consumers rolled their eyes at the sappy pastel-colors-and-butterflies packaging that has long been the tradition in this product category.

So, to go along with new advertising by JWT that makes fun of old-school feminine-hygiene ads, CBX designed new packaging. It’s black, with geometric designs in bold neon colors—no pink, no butterflies.

Kimberly-Clark, incidentally, is one company Mr. Lipman believes has achieved the ideal balance between process junkies and cowboys. “It was interesting to work with them on this,” he said. Getting a close-up view of companies that have grown huge without killing off their entrepreneurial spirit, he added, “proves to us that it can be done.

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