Remember what Andrew Zolli says about leadership? The biggest reason great leaders fail, he says, is that they fail to detect the weak signals of disruptive change on the horizon.
As Exhibit A, I give you Anheuser-Busch.
In “Dethroning the King: The Hostile Takeover of Anheuser-Busch” (known here in St. Louis as “required reading”), Financial Times reporter Julie MacIntosh examines the internal culture and politics that led to the brewing icon's 2008 takeover at the hands of Belgian / Brazilian beermaking giant InBev.
Anheuser-Busch, of course, is best known as the maker of Budweiser. The company was an American corporate giant, at one point controlling 52 percent of the U.S. beer market and, perhaps more importantly, owning one of the most iconic and beloved American brands out there.
And that, writes MacIntosh, was part of the problem. For years, Anheuser-Busch CEO August Busch III was focused solely on crushing rival Miller and dominating the American beer market. He was so focused on that one goal, in fact, that he failed to ask a simple question: What happens next?
The answer, of course, would be found beyond American borders, but one of Busch's fatal flaws was that he failed to pay much attention to beer's expanding global market. As America's beermaking Goliath, he didn't really need to. But his rivals paid plenty of attention to the global market, buying or merging with foreign beermakers and gobbling up sizeable pieces of the global pie. By the time A-B noticed what was happening, it found itself shut out of the M&A action — and ripe for a takeover.
It's an amazing story, really — how a singularly American brand suddenly found itself under foreign control. In St. Louis, a city that in many ways is defined by its connection to Anheuser-Busch, it's also a heartbreaking one.
It's also proof that Andrew Zolli knows what he's talking about. Here's what he told me in 2010:
“Our normal metaphors about innovation are all about breakthroughs, change, things that are different, a radical reframing of an industry. The reality is that most innovative work is incremental improvement. It's about staying ahead of trends as opposed to reacting to trends.
“The challenge is that once you fall behind those trends, a bunker mentality can set in. At that point, you encounter an issue that I call 'cognitive similarity' — people thinking the same way and making that bunker mentality worse.
“We need to begin to adapt to a world in which we engage the very top of the organization in a conversation about embracing a different kind of risk portfolio. That means having an established set of processes in place in which you have no expectation of return. You understand that you make investments not just for operational excellence, but for learning and adaptation. Those things are inherently uncertain, but if you begin to do them at a small or medium scale, they can yield tremendous benefits.”
That's a lesson Anheuser-Busch learned too late, as evidenced by its new name — Anheuser-Busch InBev.
How are you monitoring those weak signals of disruptive change?
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