Last month, Jane wrote about the courage to create a brand, and boy, the word “courage” struck an interesting chord within our community. Branding involves making a difficult choice to go after a niche market with laser focus in order to differentiate your business from your myriads of competitors. (Even if you think you don’t have a lot of competition, you do — more than ever.) That focus means turning down business that isn’t on strategy. Difficult? Yes. Courageous? Absolutely.
This month, I’m intrigued by a similar concept: “thought leadership.” A lot of companies bandy about the word “thought leader” as if it’s a marketing tactic, but many others aren’t familiar with the concept or the strategic benefits that come with it.
The cold reality is that thought leadership is much harder than it appears. It isn’t a marketing campaign; it’s a long-term business strategy. In this month’s CEO Challenge, I’ll outline what the concept really means, the benefits, and how your company – if you’re courageous enough – can implement this strategy in 2010.
What is thought leadership and why is it valuable?
When I talk with companies about thought leadership, they sometimes tell me that “yes, we’re doing that.” They point to their shiny new blog, their Twitter account, their webinar series, their Facebook group. However, any company can implement these kinds of marketing programs, but that doesn’t mean the company is a thought leader. They’re confusing communication tools with strategy.
Instead, thought leadership is a long-term business strategy that drives everything the organization does each day and at all levels. A thought leader is an innovator in a very specific niche, and customers in that niche recognize, value, and – most importantly – are willing to pay for that innovation, that leadership position.
Many companies that launch new products and services have truly high value solutions. They pride themselves for delivering great value and they heap services, support and options into their offering. They’re proactive in sharing knowledge, opportunities and choices. They believe they’re a thought leader because they’re delivering innovation and value.
Yet somehow they find themselves competing with low-cost providers, and they can’t charge what they believe their solutions are worth. The problem is that these companies aren’t thought leaders because the market isn’t following; prospects and customers don’t consistently recognize or understand the value.
True thought leaders can demand substantial price premiums for their solutions because they can clearly articulate a compelling value proposition for very specific market niche. They also enjoy shorter sales cycles, greater repeat business, and strategic opportunities that their competitors miss.
You must consistently lead
If a company delivers value in a stealth way that the market doesn’t clearly understand or value, that company isn’t a thought leader. Why? They have to actually be a leader.
Leadership means a company has followers who recognize and take action toward their intended results. It means the company is absolutely recognized and respected as THE LEADER in a specific niche. It’s not something a company just suddenly decides to do and then implements during a short campaign. It’s a core business strategy that the organization implements at all levels and over many years.
A lot of companies aren’t prepared to make that kind of commitment. Some executives aren’t comfortable getting in front of their industry on a regular basis. Or they think it’s more important to focus on internal issues rather than creating an external voice and face for the organization’s vision and values.
These companies should not even think about the words “thought leadership” because they don’t have the tools to do it successfully.
In addition, some CEOs worry that, by consistently and loudly sharing their vision and value, they’ll invite competition. And they’re right. That’s why thought leadership isn’t short term, and very few companies can do it because they don’t have a sustainable, meaningful competitive advantage that is differentiated and defensible. They also need to commit to continuous innovation so that when copycats show up, they’re always a step or two ahead.
That’s why thought leadership is a business strategy, not a campaign. It’s a commitment to innovation and sustainable competitive advantage over the long term. It’s also a major commitment to consistently communicate that innovation in a way that creates followers who are willing to pay for that innovation.
Solution
Thought leadership is incredibly important for companies that are launching new products and services, particularly those aimed at early adopters. It creates differentiation and changes the way the market views solutions. Yet unfortunately, I’ve found that very few B2B or small/midsize companies have the guts to create a brand strategy let alone make a long-term commitment to thought leadership.
If your company is truly ready to commit to thought leadership as a business strategy, here’s a high-level action plan to get you started.
Action Plan
1. Define the niche for which you can reasonably be THE thought leader. It may be near impossible to become a thought leader for your entire industry, but you can be the thought leader for a very small, highly targeted niche – for example, a specific geography, customer need, or application. You have to deeply understand the needs of your niche and how they will assess the value that your solution provides.
2. Develop a brand strategy and be ready to stick to it. If you don’t have the guts to turn down business that isn’t consistent with your brand strategy, then you can’t possibly become the thought leader in your space.
3. Define a leadership roadmap. How will you show leadership in your niche? It takes time and effort to become recognized as a leader. Create a roadmap that outlines all of the leadership opportunities you will pursue over the years ahead. For example, are there conferences for which you could deliver a keynote address? Publications in which you would need to be featured regularly? Committees that you can lead?
4. Develop your thought platform. You’ll need a compelling vision, stories, data, and market insight to be respected and recognized as a thought leader. You have to tell the world and your your prospective customers that you are the go-to firm. Your thought platform should show deep knowledge of where your industry has been, the problems your customers face, and where you are collectively going. You’ll also need to create intriguing communications vehicles to share these stories and vision – speeches to industry, conference proposals, events, media materials, publishable articles, intellectual property, best practices libraries, your own communications platform, etc.
5. Get your organization aligned. I can’t stress enough how important this step is. Many – perhaps most – companies have a chasm between cost functions (operations, finance) and customer acquisition (sales, marketing). Your senior team needs to align and lead those functions to execute on your brand and thought leadership position each day. Failure to align an organization is a failure of executive leadership and thought leaders are NOT in chaos!
6. Find the right executive. Here’s the reason so many companies don’t successfully achieve thought leader status – they assign this role to a midlevel communications person or to an executive that isn’t comfortable playing such a public role (or who is too busy with internal initiatives to get out there and lead the industry). A thought leader must have deep experience and industry contacts along with a public persona and job description to lead your niche. The rest of your executive team needs to be fully engaged and able to contribute as well – thought leadership has to be part of your culture.
7. Define your metrics. Naturally, you need to know that this strategy is working. The first set of metrics should involve revenue, pricing and profit margins; you need to know that customers are buying from you based on pricing that reflects the value you deliver. The second set of metrics should track evidence of followership. For example, do journalists call you to comment on news or industry trends? Are you invited to speak at important conferences? Do prospective partners, customers, or funding sources reach out to you rather than vice versa? Do employees want to work for you because they view you as the leader? These metrics might be hard to track, but do it anyway – you’ll evolve your figures over time, and they’ll help you establish your progress.
Conclusion
True thought leaders position themselves as THE source of best practices, language, and metrics for their chosen market niche. When they lead the niche in this way, competitors have to adjust and meet the rules and standards the thought leader has established. What a great competitive position!
In reality, few companies have the discipline and stamina to commit to thought leadership as a business strategy. Those that don’t won’t succeed. Those who are successful, however, can command higher prices, enjoy shorter sales cycles, and operate from a leadership position in their niches.
What do you think? Please share your thoughts and experiences with us here!
Jim,
Thanks for the comment and specifically bringing up Governance. That is a critical area normally thought about only after it is too late.
The other thing you brought up is the “new technology” challenges and that has specific implications to both for the “Thought Leadership” and the “Brand” development which should be considered as early as possible.
Thanks again and your comments are always valued.
Rick
Excellent article Rick and see these two topics of branding and thought leadership to be tightly bound. If one is not the pioneer of a new market, especially if in one with substantail competition this differentiation is absolutely critical. Since impossible to easily change the market or technology, finding a brand and positioning that effectively communicates and differentiates a technology and company from its competition is essential to success.
This is especially true in technology areas where the future direction is uncertain or controversial. An example of this is Governance. While a hot topic new topic a few years ago, has been difficult to sell partially since everyone needs governance but no one wants to be governed. Plus many major players in this space make for confusion as to how it is defined and differentiated.
To differentiate oneself in both branding and gain thought leadership perhaps is necessary to first redefine the brand and positioning a way that closely aligns with well established business drivers and the unique characteristics of the specific offering. In the case of Governance for example might require coming up with a new term that is more descriptive of the business benefits and to avoid being labeled as a me too offering.
Another thought provoking newsletter!
I would like to support and extend your bullet item 5: Get Your Organization Aligned. Not only finance and sales, but equally important to include marketing and engineering. Two issues: first, many companies cannot see the difference between marketing and sales. The former should be tasked to find out what customers want and need and how to be #1 or #2 in the markets served, while the latter should clear the inventory. The second issue is to align marketing and engineering. All too often these two functions are held apart, when they should work hand-in-hand and together with customers. In my experience on the engineering side – I’ve transformed the organization to support the “strategy” by providing world-class products that the CEO wanted, but marketing was still in the sales mode and looking for new features for old, low-margin products.
Carl and Rick, your comments about visibility are well said. I define thought leadership as the communication of market leadership, which is consistent with Rick’s post. One way to summarize Rick’s action plan is to plan for leadership in your market niche, and build-in to that plan effective ways of communicating that leadership.
I would add two key characteristics of thought leaders.
1. Thought leaders are generous with information. Rick, you touch on this when you wrote: “Some CEOs worry that, by consistently and loudly sharing their vision and value, they’ll invite competition. And they’re right.” Executives who came of age before the Internet need to get used to the openness of information, and learn that generosity pays off.
2. Thought leaders take risks. Jeff Bezos famously said, “To be a leading company, you have to have a willingness to be misunderstood.” Being out in front is often uncomfortable, but that’s where the visionaries are.
Our white paper on the topic is titled “Is Anybody Following Your Thought Leadership?”.
Thanks for a great post on a topic that is timely amid the hype of the social media explosion.
Carl,
Great feedback!
From our work your statement about “visible – even prominent – in your target market” stands out. We see a lot of companies who have silently and invisibly invested in their company, their people, their technology, their products (you get the picture) and don’t finish the job by proactively leading the market to experience or acquire this value.
Somehow these silent companies believe we will all guess they have the value we want and need – they don’t seem to understand why we won’t pay more or buy more when we don’t see, hear or read about them being different, better, cheaper, etc. than everyone else.
Great points – it is work, but it is worth it when done completely and correctly (like lots of other things).
Thanks,
Rick
I agree. Becoming a “thought leader” takes a lot of work, but it sure is worth it.
The work comes in two parts: First, you must truly become an expert in a topic that is core to your firm’s business. (This isn’t necessarily technical expertise; it could be sales technique, personnel retention, whatever.) Second, you must spend the time and effort to make yourself and your expertise visible — even prominent — in your target market.
An example: Let’s say I am considering making some energy-efficient improvements to my house, and I am looking for a contractor. One contractor paints the legend “Green Retrofits Are Our Specialty” on his truck and puts a few ads in the local yellow pages. The other contractor spends the time to become a recognized thought leader in the field. Everywhere I look, I see newspaper and magazine articles that identify this second contractor as a national expert in practical energy conservation techniques. When I attend my local home show, he is a featured speaker. He makes himself available for face-to-face questions after the presentation, and he demonstrates an in-depth knowledge in every area I ask about.
Which contractor do I want working on my house? The second one, of course. By the time I leave the home show, I am thinking, “Wow, I wonder if I can afford this guy? I wonder how far ahead he is booked?” I don’t even want to look at alternatives unless I am forced to.
I sure would like to be in that competitive position, wouldn’t you?
PS: If thought leadership intrigues you, check out Ken Lizotte. A Google search will find him easily. He’s a thought leadership consultant. That’s what he does – coach people who are committed to becoming thought leaders. He has a concise how-to book on the subject, too. (Come to think of it, he’s built himself into a thought leader on the topic of thought leading!)