The folks at Nike were not happy with Fast Company at this time last year. After appearing on our Most Innovative Companies ranking for four years, they weren't included. Neither were several other perennials, including GE and Disney. It's not that these businesses suddenly lost their mojo. But in a climate where the velocity of change is accelerating, these companies didn't have a compelling-enough breakthrough for us to highlight.
The Most Innovative Companies list isn't simply a ranking; it is constructed to represent the state of innovation in our economy. We placed Square founder Jack Dorsey on our cover a year ago because his company was revolutionizing mobile payments (and Square repeats this year, at No. 3, after rapidly expanding its footprint, notably via a megadeal with Starbucks). If Nike had come out with the FuelBand and Flyknit earlier, the company would have been worthy; this year, those innovations vault Nike to No. 1.
Facebook and Twitter don't appear on this year's list at all—and neither do 41 other companies from 2012's list—so I'm sure we'll face unhappy folks again. But as deputy editor David Lidsky writes in "Why Facebook and Twitter Are Not Most Innovative Companies," "A spot on MIC, as we call it, is not a tenured position." Perhaps Facebook's graph search will return the company to No. 1 next year (as it was in 2010), or Twitter's international efforts will deliver a boost. We'll assess each on the merits.
The companies that did make this year's list illustrate how in the Age of Flux continuous improvement, speed of change, and breadth of ambition are more important than ever. Among the lessons:
- Social is now a layer for everyone: Nike's FuelBand is not only a novel product, but users promote the company with each post or tweet of their activity.
- Software is the "wow" factor: Now that smartphones and tablets are everywhere, cool apps are the foundation of transformational businesses. Uber (No. 6) is remaking urban transport. Airbnb (No. 12) is revolutionizing hoteling. Even Ford (No. 27) has put software at the center of its customer experience.
- Reinvention is required: Fab (No. 5) started as a hot flash-sales site, but it broke out by expanding well beyond that model. BuzzFeed (No. 18) didn't content itself with huge audiences drawn by cat videos; it invested in high-impact journalism and set new traffic records.
- Speed matters: Amazon (No. 2) raised the ante for e-tailers with same-day delivery. And Google's (No. 11) test case for superfast broadband in Kansas City has other locales salivating.
- Entrepreneurialism is still rising: Just look at the range of businesses remaking fashion and beauty (No. 19), from Nasty Gal to Science.
- Data is the difference: Splunk (No. 4) is now worth $3 billon; the risk analytics of OpenGamma (No. 24) offer needed protection against future financial meltdowns.
- R&D pays off: In a world of instant gratification, long-term investment still matters. Proteus Digital Health and GE Healthcare generated biotech breakthroughs (No. 34). Thanks to intense research, Corning (No. 36) can do things with glass that no one ever imagined.
- Schools are learning: Technology continues to remake education, as online Western Governors University (No. 28) became a leading provider of master's degrees, and Coursera (No. 40) attracted 2 million students.
Many other lessons are contained in our industry-by-industry top 10 lists. We'll be rolling out more on fastcompany.com in the weeks ahead. Those who act quickly can experience these lessons firsthand at Innovation Uncensored from April 23 to 24 in New York, where we'll feature Most Innovative honorees past and present. See innovationuncensored.com for details.
A version of this article appeared in the March 2013 issue of Fast Company magazine.