Next week, we publish our 61st Fortune 500 list, which provides an interesting lens on business success in the age of disruption. Fifty-seven percent of the companies on this year’s list weren’t on it twenty years ago.
Yet in some ways, the most interesting stories are about the other 43% – the companies that manage to survive and thrive in spite of the rapid change going on around them. In many cases, these are companies that have been willing to disrupt themselves – although usually in response to a competitive threat.
Fortune’s Phil Wabha wrote yesterday about Target CEO Brian Cornell’s comment that his company “almost needs to say thank you to Amazon” for teaching consumers to shop online. He now argues Target’s most valuable guests are those who will “shop with us both online and in the store,” and he is scrambling to reshape the company. (Wabha profiled Cornell is the March magazine, which you can read here.) Similarly, Fortune’s Verne Kopytoff spoke earlier this week with Ford CEO Mark Fields, not in Detroit, but at his new Silicon Valley lab, where he was talking about competitive threats, not from GM, but from Google, Uber and possibly even Apple. (Apple’s SVP of Operations this week intriguingly called cars “the ultimate mobile device.”)
What’s clear is that running a Fortune 500 company has never been more difficult. Change happens fast, competition comes from left field, and survival requires foresight, nimbleness and creativity.
Enjoy the day, and the weekend.
• Pressure mounts on FIFA sponsors
In the wake of U.S. Department of Justice charges that alleged wire fraud, money laundering and racketeering at FIFA, there is rising criticism of the corporate sponsors that are still involved with the beleaguered league. Several companies have allowed their contracts to lapse recently while others, like Adidas and Visa, have publicly expressed concern though they remain sponsors of the league. Fortune
• Lehman Brothers CEO resurfaces
Dick Fuld, the former CEO of Lehman Brothers, ticked off a number of reasons for the banking disaster that led to the Great Recession but didn't mention one widely touted culprit: His own firm. Fuld also said his firm "was not a bankruptcy company." The comments were notable because it was the first time Fuld talked about Lehman since he testified in front of Congress shortly after the financial firm failed. Fortune
• Amazon's grocery aisle ambitions
Online retailer Amazon.com is reportedly planning to expand its private label lineup to include groceries like milk, cereal and baby food. Amazon's move into private-label grocery comes as food is becoming an even-bigger business for major retailers. And in-house brands are doing well, as customers look for bargains and are more open to buying store brands. Fortune
• U.S. economy likely shrank in first quarter
Last month, the Commerce Department estimated that gross domestic product grew just 0.2% in the first quarter, though a second, revised estimate to be released later this morning is expected to reveal a decline. Economists surveyed by The Wall Street Journal estimated that GDP actually dropped 1% at an annual pace in the first three months of the year. That would result in the third quarterly decline since the recession ended in mid-2009. WSJ (subscription required)
Around the Water Cooler
• Will a rate hike throw off young traders?
Here's a fascinating stat: about 30% of Wall Street traders started their careers within the past five years. That means they all have never learned what higher interest rates from the Federal Reserve look like first hand. One chief economist points out that for younger traders who have only known zero-percent rates, the risk is that they'll misjudge the speed with which the Fed tightens policy. Bloomberg
• Google tests hands-free payments
Google revealed it has partnered with McDonald's and Papa John's in the San Francisco Bay area to test a new, futuristic way for customers to make their purchases, without having to take out their wallet. Rather than use a physical card or cash, a customer would tell the cashier their name. A blue tooth sensor would then automatically detect if they have the requisite app and then bill them. Fortune
• Class of 2015 looks lucky
While there are still a lot of worries about the amount of debt college students have incurred on the way to earning their diplomas, this year's grads are lucky in other ways. They benefit from the nation's 5.4% unemployment rate. Why? Labor market research shows that the lower the U.S. jobless rate at graduation, the better the career prospects for new college grads, which also yields a wage advantage over those who finished school amid higher unemployment. WSJ (subscription required)
• L'Oreal wants to 3-D print human skin
L'Oreal, known for making cosmetics and hair color, could also soon reveal a new look: on 3-D printed human skin. The French cosmetics company has partnered with a San Diego bioprinting company to produce skin more quickly in a technique that would allow for more accurate testing. That could help make L'Oreal's portfolio of sunscreen and age-defying serums even more efficient. Wired
5 things to know today
GDP and FIFA election — 5 things to know today. Today's story can be found here.