I got my first glimpse of Apple’s newest product as the sun was coming up. It was just after 7 a.m. on a Wednesday in January, two days after Apple executives, including CEO Tim Cook, began moving into Apple Park, the company’s new spaceship-like headquarters in Cupertino. As I was escorted around the gleaming structure, it occurred to me that it embodied everything Apple’s products represent: a glimpse of the future, and yet also something familiar—not science fiction, but a tangible vision made real.
When I sat down with Cook a while later, in a conference room labeled simply ceo, he talked about how central “humanity” is to Apple’s products, how tech specs and silicon advancements only matter if they enable users to improve their lives.
Apple has long been an icon of innovation. In an age of rapid change, what’s remarkable has been the company’s staying power. This year, it returns to the No. 1 ranking on our annual Most Innovative Companies list. Apple is the only business to have passed our editors’ criteria to make the list every year since 2008. Which does not mean that the company hasn’t hit roadblocks along the way; in fact, Cook was quite candid that innovation rarely unfolds in a straight line. While many outfits aspire to emulate Apple’s system, it’s the company’s adaptability that truly sets it apart. Apple’s culture combines intense effort, high standards, and a willingness to forge new paths, even if those paths may threaten the company’s existing products. Who else would get rid of disk drives that were central to personal computers? Or headphone jacks? Or a home button on a cell phone, as Apple has with the iPhone X?
This year’s Most Innovative Companies coverage is filled with inspiring examples of creativity, discipline, and positive change. It is our most robust edition ever, including top 10 lists in 36 categories, drawn from a research pool of thousands of companies all across the globe. (Many organizations nominated themselves through a new submission process this year.) What follows are 13 lessons that I compiled from this data set. Consider it a road map for the year ahead, a snapshot of what matters most in 2018’s fast-moving innovation economy.
1. DON’T LOOK DOWN . . .
Apple doesn’t obsess about its stock price, Cook says. Focusing on what he calls the “90-day clock” of quarterly earnings reports distracts from long-term strategies and investments that are actually the source of Apple’s success. Instead, the company is always looking out, toward the future. This may sound surprising, given the bang-bang pressures of today’s marketplace and Apple’s consistent history of at-least-annual product releases. But the deadlines that matter, Cook says, come from internal expectations. There is a balance between speed—a need and desire to keep improving—and patience: a determination to never release a product that falls short of self-defined standards for excellence and advancement.
2. . . . BUT WATCH YOUR STEP.
Notably absent from this year’s list are Apple’s fellow tech giants Alphabet and Facebook. That’s because both, in different ways, found themselves over their skis this year—and stumbled. Neither one would describe themselves as supporters of fake news or biased, hate-infused content, yet they did not do enough to protect themselves or their users. Businesses today cannot hide from the consequences of their actions, even if those consequences are unintended. The rate of execution so prized by companies with engineering cultures may need to be modulated: We now know that fixing the problem after the fact, as live testing requires, can carry a significant cost.
3. RESPONSIBiLITY IS IN THE MIRROR.
Every business can be a platform for cultural impact, and not simply through soloed corporate social responsibility programs. Patagonia has had an exceptional year—financially, as well as in the realm of public opinion—because it has leaned into environmental activism. “Doing good work for the planet creates new markets and makes [us] more money,” explains CEO Rose Marcario, who has invested in new recycling and sustainable-materials initiatives while also challenging various government policies. CVS has thrived by removing products with “chemicals of concern” from its shelves, as well as unhealthy classes of food.
4. TRANSPARENCY ISN’T RADICAL.
Why would a company willingly disclose its profit margin on each item it sells? Because Everlane isn’t embarrassed about what consumers will find out, and that in turn puts pressure on everyone else to be more open. Brandless has connected with buyers by eschewing the overt storytelling of traditional consumer packaged goods, in favor of clear, simple labels—and lower-than-the-competition pricing.
5. DIVERSITY IS OPPORTUNITY.
Marvel Studios has reinforced its leading position by betting on new kinds of heroes. Netflix has made it a priority to appeal to kids in Bangkok on motorbikes. Sephora has targeted products for a broader range of skin tones, including a crackling partnership with Rihanna’s new Fenty Beauty brand.
6. MOMENTUM IS POWER.
Apple is hardly the only tech giant to benefit from an integrated ecosystem. Amazon has demonstrated that big doesn’t need to be slow, from its rapid Whole Foods integration to its rollout of new Echo devices. China’s Tencent, already a dominant player across chat, media, finance, and more, experienced 59% growth in revenue.
7. SOLOISTS STILL STAND OUT.
Spotify’s focus on music has so far fended off even rivals like Apple, with revenue up 52% and more than 140 million active users globally. DJI has turned drone making into an art. Compass Group has amassed enough heft in the food-services business that it is changing what we eat—for the better.
8. THE EXPECTED CAN BE UNEXPECTED.
Sugarfina is redefining the idea of the candy store, while Diamond Foundry is disrupting jewelry by taking man-made diamonds mainstream. Even our sullen acceptance of traffic jams is being challenged by Waze.
9. DATA SCIENCE IS FOR EVERYONE.
Math geeks and tech firms aren’t the only ones deploying data in novel ways. Rover analyzes cues from its community to find better matches for pet care. Cava is injecting new efficiency—and joy—into the restaurant business. Syapse is taking cancer care to the next level, saving lives.
10. ARTIFICiAL INTELLIGENCE IS EVERYWHERE.
The machines haven’t taken over, but they are enabling new activities, from visual search at Pinterest to improved job listings via Textio to enhanced, real-time travel planning via Hopper. Even plumbers, caterers, and hairdressers can take advantage of AI, via the customer-and-job-matching algorithms of Thumbtack.
11. MOBILE IS STILL EXPANDING.
Smartphones are a core tool for healthtech insurgent AliveCor. They’re the epicenter of the cashless-payments boom, from India’s Paytm to small-business-fed Square. The NBA, too, is doubling down on in-your-pocket engagement.
12. MONEY TALKS.
As trite as it is true, dollars dictate action. Which is what makes a wave of new efforts to fix broken funding models so promising. Social Capital has taken aim at venture capital, while the Ford Foundation is going after philanthropy. The folks at GiveDirectly are putting millions behind a test of universal basic income.
13. KEEP THE FAITH.
Nintendo seemed to be losing the game wars, until the Switch reignited passion. 23andMe got hammered by the FDA, but has now regained momentum in genetic testing. We all have good days and bad days, moments of adulation and despair. What allows innovative organizations—and their leaders—to keep driving forward is the hope that tomorrow will bring even more satisfying, fulfilling achievements.
Check out the 2018 edition of the World’s Most Innovative Companies list.