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Innovation and Shifts:Changes AcrossFortune 500Companies Over theYearsMikaela CohenGraduate Assistant The CoxInstitute for Journalism Innovation,Management and Leadership
Millions of dollars in revenue andwidespread success are characteristics ofFortune 500 companies. Yet, newcompanies join the Fortune 500 listfrequently, and quickly rise in therankings.The 2020 list published this summerincluded 322 new companies, compared tothe 1995 list published at the dawn of theinternet era.A 65% shift in this iconic rankingdemonstrates the significant change takingplace in businesses over the past 25 yearsin the United States. Now, the Fortune 500list is seen as a barometer for change.Fortune published its first list ofthe top 500 U.S. companies in 1955,only including industrial companieswhich were representative of theeconomy of its time. In 1995, as the economyshifted, Fortuneincorporated servicecompanies into the list includingindustries like banking, retail andfinancial institutions.The Journal of Financial and QuantitativeAnalysis described the list a “unique type ofnonlinear performance goal, where thetarget goal is to be one of the top 500 U.S.firms by revenue.”Walmart is consistently at the top of the list,earning the number one spot since 2013.“Walmart became the biggest company inthe world,” said Brian O’Keefe, deputyeditor at Fortune who oversees theFortune 500 list.“It may not seem like an innovativecompany now, but they were actuallyincredibly innovative. They were usingtechnology to manage supply chain andlogistics and to outmaneuver their rivals.”Notable newcomers to 1995 list asnew industries were included Walmart Microsoft SunTrust Banks Verizon Delta AirlinesO’Keefe said Amazon climbed theFortune 500 ranks quickly likedWalmart did.“Amazon came along and reinventedthe retail world,” O’Keefe said. “Lastyear, Amazon was number five on theFortune 500 and in 2002, it wasnumber 492. It has been a meteoricrise on the Fortune 500. Apple,Amazon, Alphabet and Microsoft —these are the companies that havebeen the icons of innovation.”Innovation and Shifts: Changes Across Fortune 500 Companies Over the Years2
David Sutherland, who is the founder andmanaging director of the Launch Institute,a technology scouting firm, and a businessprofessor at the Terry College of Businessat the University of Georgia, said he hasworked with companies who chose toinnovate, like Apple Computer, ultimatelyleading to their continued success.Sutherland said if longstanding Fortune500 company want to remain on the list,they need new ideas and keep pace withSilicon Valley’s speed of innovation.“The 90s saw a lot of start-up companieslaunching businesses. This wholetechnology shift frightened bigcorporations,” Sutherland said.Prior to the 90s, companies mainlyfocused on improvements in research anddevelopment. However, with the rise ofSilicon Valley and its innovativeframework, companies began switchingR&D focus to an emphasis on innovation,Sutherland said.Sutherland said he recalls whencompanies realized they needed internalinnovation teams. At first, he said,companies didn’t know how to innovatebut over time learned how to incorporateit into the corporate business model.Notable newcomers to 2000 listfrom 1995 list Comcast Charles Schwab NCR Caremark Rx (later known asCVS Caremark) Barnes and Noble“Innovation has become a critical successcapability inside of companies,”Sutherland said.“It’s not just the speed of the idea. It’sabout how valid the idea is, how accuratethe idea is and how well the idea ismeeting the customers’ needs.”Notable newcomers to 2005 listfrom 2000 list Amazon.com DIRECTV Group Cox Communications Starbucks H&R BlockSutherland said a success component forbusinesses is maintaining a startupmentality, the same mindset and culturethey have at the beginning.The mindset that led to the success ofmany Silicon Valley startups is theapproach businesses should implement,Sutherland said.Innovation and Shifts: Changes Across Fortune 500 Companies Over the Years3
“When you’re looking at thecompanies that really get the VC[venture capital] money, andultimately move up into the Fortune500, they know how to sell themselvesand they have a really good pitchdeck,” said Maija Ehlinger, associateeditor and technology reporter atHypepotamus.com.Hypepotamus.com is an Atlanta-basedregional publication that reports onthe southeast’s innovation community.Before moving into a full-timeeditorial position atHypepotamus.com, Ehlingerfreelanced for the publication andcontinues to freelance for CNNInternational. Prior to her journalismcareer, Ehlinger worked in startupcompanies.“I don’t think anyone can say thatFacebook is a startup anymore, butthey keep a startup culture,” Ehlingersaid. “Google still has a startup cultureand that’s in vogue to do so, theblurring of the lines between startupsand startup culture that people want toimplement.”Maija Ehlinger, Hypepotamus“Especially in today’s business climate,companies that are unable to pivot andmakes changes quickly have folded,”Ehlinger said. “Unfortunately, we’reseeing retail companies around theworld that have folded and airlines thathave gone bankrupt.”Ehlinger said these legacy industriesaren’t going away, but the companiesthat make in in these legacy industriesare ones who innovate and adapt towithstand change.In 2005, Facebook wasn’t on theFortune 500 list, but on the 2020 list,it ranks 42. Google wasn’t on the 2005list either, but in 2020, Alphabet,Google’s parent company, ranks 11 onthe list.Innovation and Shifts: Changes Across Fortune 500 Companies Over the Years4
ReferencesCornelius, J. (2020, September 21). About & Team.Retrieved November 13, 2020, fromhttps://hypepotamus.com/about/Editors, Fortune. (2020, September 18). Fortune500 Lists. Retrieved November 13, 2020,from https://fortune.com/fortune500/Editors, Fortune. (n.d.). Retrieved November 13,2020, fortune500 archive/full/1955/index.htmlMeneghetti, C., & Williams, R. (2017).FortuneFavors the Bold. Journal of Financialand Quantitative Analysis, 52(3), 895-925.doi:10.1017/s0022109017000308Mikaela CohenMikaela Cohen is a first-year graduate student at the University of Georgia,earning a master’s degree in Journalism. She is currently a graduate assistantfor the Cox Institute for Journalism Innovation, Management and Leadership,primarily conducting research and assisting Dr. Keith Herndon, director of theCox Institute.Innovation and Shifts: Changes Across Fortune 500 Companies Over the Years5
Fortune 500 ranks quickly liked Walmart did. "Amazon came along and reinvented the retail world," O'Keefe said. "Last year, Amazon was number five on the Fortune 500 and in 2002, it was number 492. It has been a meteoric rise on the Fortune 500. Apple, Amazon, Alphabet and Microsoft — these are the companies that have
