Peripheral Disruption (The Creativity Suite. Episode 31)

Beer is an old invention. At least, 5000 year old actually and some argue it could be even 12,000 years old, so the industry has seen millennia of innovation, but like with many industries the last few years have seen an uptick in the speed of innovation.

I thought it would be interesting to talk about innovation and beer with someone from the world’s largest beer company so when Pritam Dutta, Global Director — Digital Products and Innovation at Anheuser-Busch InBev agreed to talk with me I got excited. With an impressive 30% marketshare of the global beer market the chances are big that a beer you decide to drink is made by Anheuser-Busch InBev. With 400 different beer brands and 52 billion dollars in revenue the company is the dominant player globally in the industry.

My discussion with Pritam quickly moved into the area of the different kinds of threats a company faces from other companies.

It’s easy to think of the threat from your traditional competitors: They are similar to you, deliver the same, or similar, products to you. You know them, and they know you.

Pepsi vs Coke. Hilton vs Marriott. Nike vs Adidas. Or in the case of beer: Anheuser-Busch InBev vs Heineken.

Pritam put it nicely: “It’s when you think: “I make a lot of beer, you make a lot of beer, now let’s see who can sell the most beer of the two of us”.”

Let’s call them “Head-on disruptors”. Picture two deer locking horns and attacking each other head to head.

The other kind of disruption we easily spend a lot of time and energy on is the ones where a brand new player comes in and totally disrupts an industry. As Pritam described it: “With these players you are not fighting for market share, you are fighting for your existence.”

Let’s call them “Head off disruptors”. How Netflix cut off the head of the whole Blockbuster rent-a-vhs industry, or how Apple introduced the iPhone (a computer that you can make phone calls with) and more or less cut off the head of the traditional mobile phone industry, that where busy competing head-on with each other on who could develop the best mobile phone that had a computer added to it.) Or in the case of beer: Amazon.com and other huge e-retailers staring to create and push their own branded products and potentially introducing their own branded beer potentially pushing out the traditional beer giants.

Head-on competition is very different from Head-off competition and demands very different strategies, thinking and creativity.

Head-on is easy to handle. We know who are competitors are, we know what they do and how they do it (Because we do similar things in a similar ways.)

Head-off is easy to keep top of mind, because the idea of someone coming to chop off your head is going to keep you on your toes…

But there is a third kind of disruption.

One that is neither “head-on” or “head-off”, but instead comes in from the side.

Let’s call that: Peripheral Disruption — the threat from the side.

Let’s look at hotels.

Head-on would be Hilton vs Marriott.

Head-off would be Air-BnB or Zoom (people staying in each other’s homes or people deciding not to go on business trips and instead do the meeting via zoom)

Peripheral Disruption would be a trend of people preferring smaller design hotels over the traditional 5-star hotel experience.

Pritam told me that for beer it looks like this:

Head-on: create a light beer to make people choose your beer instead of competitor’s

Head-off: Amazon creating their own branded beverages and pushing it via their channels.

Pritam told me that for beer Peripheral Disruption looks like this: A trend of consumers going for beer made from smaller, local, micro-breweries.

As head of digital products and innovation Pritam told me that he spends 40% on “head-on”, 30% on “heads-off” and 30% on Peripheral Disruption.

When I asked him which of the three was the biggest threat he said: “I would actually say “the Peripheral Disruption” because it’s the one you are least likely to see coming, and the one you are most likely to neglect paying attention to.”

It’s just like when driving a car, we tend to watch out to see what is infront of us, and look it the rear view mirror to see if anyone is catching up to us, but it’s the ones coming at us from the side that we tend to miss.

I am pretty sure you know who your “head-on competitors” are. And I am pretty sure that you have identified and keep a close watch out for the “heads-off competitors” to make sure no-one comes and cuts your head off.

But what about the Peripheral Competition? Are you paying enough attention to them?

That was the lesson I brought with me when I had a very interesting discussion with Pritam Dutta Unfortunately it happened over zoom so we did not get to share a beer while we chatted, but I hope to see him in real life soon in Bangalore and continue to discuss innovation with him over a beer or two. And if you are ever in Singapore and want to talk creativity and innovation with me over a beer, do reach out.

Fredrik Haren is The Creativity Explorer. He has delivered more than 2000 speeches in 70 countries and just celebrated 25 years as a keynote speaker. His book “The Idea Book” was included in “The 100 Best Business Books of all Time”. Follow him for more original content on creativity and innovation.

In The Creativity Suite series Fredrik interviews leading innovators around the world.