Monday, April 25, 2011

How Fast Company Compiled the 50 Most Innovative Companies List

Guest post by Nancy Cook, Senior Editor at Fast Company, who will be part of the panel in the Business Model Adjacencies... Seize the White Space session at the Front End of Innovation Conference on May 16-18th taking place in Boston. You can follow her tweets at @nancook.

We’re constantly debating the hallmarks of an innovative company at Fast Company. Does innovation stem from the culture or DNA of a place—the tone set by its leader? Or, is it a tangible product built by a team of engineers, software developers, and designers? And, how do long-standing companies keep innovation alive as they mature?

For the last few years, we’ve tried to answer these questions in our March issue that features the 50 Most Innovative Companies. In 2011, some of those businesses included Google, Univision, FourSquare, Twitter, Netflix, Nissan, Intel, and Zynga. Whenever we compile the list (arguing and debating the myriad of choices from our New York City office), we glean lessons from the process. Here are the top headlines we took away:

• Innovation clusters around platforms.

Apple is No. 1 on our list not just for the iPad. It’s also the way the App Store, iPad and iPhone have collectively encouraged and allowed other businesses to innovate. We chose 100 as examples—from Angry Birds maker Rovio to Square, which turns an iPhone into a credit card reader—but there are thousands of Apple-assisted achievers.

• Mobile changes everything.

Apple, Facebook, Google, and Twitter are all both beneficiaries and accelerants of this trend. But there are also more targeted players like Foursquare, which has opened the curtain on what the marriage of GPS and mobile—geolocation—can offer.

• Innovation exists in surprising places.

Syncardia is a medical device maker whose advances in artificial heart technology—including small, portable batteries—not only are a miracle for those awaiting heart transplants today but presage a not-too-distant future when you’ll be able to get a permanent artificial heart replacement, just like you can today with knees and hips.
Mad├ęcasse is a chocolate company, headquartered in Brooklyn, but its true operations are in Madagascar. Africa produces 85% of the world’s cocoa beans, but only 1% of its chocolate. Mad├ęcasse has taught locals in Madagascar to produce delicious top-end chocolate that is now sold in places like Whole Foods, bringing industry, jobs and wealth to one of the poorest spots on the planet.

• Not all technology innovation is in Silicon Valley.

Groupon has illustrated how online-based businesses can explode even out of America’s heartland, as the Chicago-based startup has.

ARM, based in London, licenses low power chip designs for the iPad, iPhone, Kindle and nearly every other mobile device.

Kaspersky Lab, in Moscow, has turned hackers into some of the world’s most sought after computer-security experts.
• Businesses can do good and make money.

PepsiCo is on the list for its ambitious investments into nutrition R&D, using pharmaceutical research techniques to find ways to cut sugar and sodium use without changing taste.

Nissan is on the list for creating the first mass-market all-electric car in the Leaf. Nike is ranked for turning plastic water bottles into World Cup soccer jerseys.

Amyris, a biotech and biofuel outfit, has developed a microbial version of an important antimalarial drug that can be made in virtually unlimited quantities (and will be available as early as 2012).

Kosaka is a Japanese smelting and refining business that harvests gold, rare earth metals and other minerals from old electronics and cell phones.

• Young leaders can grow up fast.

The Social Network may have riled Mark Zuckerberg internally, but publicly he took it like a pro—and rebounded even stronger, as evidenced by his star turn on SNL.

Larry Page handed the reins at Google to Eric Schmidt—and after training himself up, took them right back.

• Innovative companies want to be independent.

True, some innovators are in it for the big exit. But more and more, there are innovative leaders who are resisting going public: Facebook and Zynga on our list epitomize that trend.

• Nostalgia is a trap.

Netflix didn’t fall into stubbornly holding onto its disc-by-mail model, embracing streaming and thriving (even as Blockbuster, which failed to get with the times, filed for bankruptcy).

ESPN, relentlessly rethinking, has integrated new technology into its customer interactions and broadcasts like a startup, despite its dominant position.

• Tech can help not-for-profits have outsized impact., a small outfit in New York, raised $30 million last year for 60,000 classroom projects. If that doesn’t epitomize the inspiring nature of innovation, nothing will.


Brian said...

I think it would be helpful if Fast Company would make a critical distinction in its 'top innovator' designations. There are 'startups (i.e., first time innovators)' and there are 'serial innovators'. While there are clearly overlaps, the requirements to be successful differ greatly between these two innovator types. For me, it is not helpful to see Apple or P&G on the on the same list with Twitter and FourSquare. This might also help Fast Company distinguish its list from all the others in an 'innovative' way. It will require careful judgement to make this distinction in some instances (Google?) but will lead to some interesting debate.

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