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Influential Companies December 11, 2008, 5:00PM EST

The World's Most Influential Companies

In a year of loss, they're building market share, upending their industries, and changing consumers' lives

By Jena McGregor

Emiliano Ponzi

"Power lasts 10 years," goes an old Korean proverb. "Influence, not more than a hundred."

In a year that brought the mighty to their knees, some of the biggest players in business have seen their power whittled away. The once-venerated Lehman Brothers filed for bankruptcy in September. American International Group (AIG) now bows to government officials after nearly collapsing under a web of risky bets. Even the blue-chip General Electric found itself going hat-in-hand to Warren Buffett.

As the proverb points out, influence has a shelf life, too. And it's probably getting shorter as the cycle of change accelerates. Companies that once wielded a seemingly unshakeable hold over their industries—General Motors (GM), Sony (SNE), Microsoft (MSFT)—now find themselves following the lead of more nimble players such as Toyota (TM), Apple (APPL), and Google (GOOG). "There's no standing still," notes veteran strategy guru Gary Hamel. "Influence is like water, always flowing somewhere."

The core characteristics of influence are unchanged, whether it's inspiring a loyal following, spawning big ideas, or building up mammoth market share. What has changed is how players achieve it. A company's physical assets are less important now than the force of its ideas. In the age of blogging and instant communication, consumers are less the recipients of corporate influence than powerful actors who help shape it. "We're coming to realize a brand is not just what the manufacturer says it is," says Shelly Lazarus, chairman and CEO of Ogilvy & Mather Worldwide, "but everything that the consumer or the customer experiences." Think of the community built around Apple products.

With that in mind, BusinessWeek developed a list of the World's Most Influential Companies. We chose 10 companies that have devised winning strategies in their industries. They are the ones with the game-changing ideas, the greatest impact on consumers, and the bold tactics rivals emulate. None is infallible or without controversy. And our choices were more art than science. But we believe each company played a major role in business over the past year and could shape the corporate landscape for years to come.

In honing the list, BusinessWeek worked with an advisory board of 14 academics, consultants, and industry leaders worldwide. Several themes emerged. For one, the developed world is no longer the sole repository of influential companies. Nearly a third of the board's suggestions were for companies based in emerging markets, where a vibrant workforce and global capital play a vital role.

LATECOMERS

And forget about first-mover advantage. Google was not the first search engine, just the simplest and most technologically advanced. Apple, though late to the cell-phone race, has revolutionized the industry with its iPhone. Futurist Andrew Zolli notes that these latecomers don't "just define, but redefine, the terms of competition."

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