1. Business people read, explore ideas and listen to trendsMany senior leaders are open-minded, curious and explorative and see part of their role as introducing concepts and change in an appropriate and structured way to their organisation. In fact, many see this as an important aspect of leadership. As a result, executives at all levels will build knowledge. That’s the rational side of this dynamic. There is an important emotional side too. People do not switch off their emotions when they come to work and emotions guide the hunger for external ideas. As a result of this swirling mix of rational and emotional drivers there are extremes in business circles when it comes to the exploration of ideas – hence the often stark contrast between those leaders who embrace ideas and those who don’t.
2. Thought leadership is linked to corporate reputationReputation appears to be a crucial element in the success of thought leadership. Studies put out by Deloitte, IBM or McKinsey are quoted by journalists, academics and thousands of others trying to convince colleagues or customers of an idea. Reputation is an important mechanism behind the impact of thought leadership, and thought leadership also contributes to reputation. In recent years, corporate reputation has come under closer scrutiny. There has been increasing pressure for businesses to align their operations with modern values and their reputation has suffered if they have not responded. A variety of tools are used to do this (from PR and advertising to pro bono work and community engagement) and thought leadership plays a powerful part.
3. It ‘showcases’ expertise and intellectual capitalIntellectual capital is the knowledge, experience and expertise of a person or organisation and it is all that a pure advisory firm has to offer. In order to attract clients these practices must therefore find ways to demonstrate their expertise, and thought leadership is one important mechanism. But in this context it must be more than just the communication of a technical development or a new capability. It shows the ability of the people involved to apply, develop or innovate around concepts.
4. It fits with industry belief systemsBelief systems affect business life to a shocking degree. The late Wroe Alderson, a professor at Wharton Business School, noted that markets adopt herd behaviour. They evolve their own language, history, icons, beliefs and behaviours, which all who participate in the market adopt. Business leaders and other executives evolve a framework of ideas in which their products and services are developed, launched and communicated. As a result, conventional wisdom grows up within an industrial sector that becomes the basis of business policy. Businesses who simply reinforce the restrictive mental models of any market will eventually be found out and their reputation damaged.
5. It can generate demandHarvard Business ReviewThere is no doubt that the publication of thought leadership through respected communications media attracts buyers. If an expert writes a credible article that is published in the Harvard Business Review, or has an idea reported in the Wall Street Journal or the Financial Times or presents convincingly at a leading conference such as Davos, then work will follow. People will see these communications and, if it resonates with their situation, will be drawn to discuss the application of the concept to their organisation.
6. It can educate a public, creating a framework in which products or services will be boughtThis is one of the most interesting and powerful aspects of Thought Leadership. It has been used to help create latent demand for products or services that people did not know they wanted. The PR and viral messages about a new idea act as a bow-wave, generating interest in a new technology or improvement to life.
7. It connects with modern buyer behaviour and valuesCreators of consumer-orientated thought leadership define it as insight that connects with societal values. They set out to understand evolving beliefs and to produce programmes that resonate with modern consumer values. It has been known for a long time that good thought leadership connects with very senior executives for instance. It often relates to strategic issues that they are trying to resolve. They contact suppliers who produce relevant content because they feel they have an understanding of their situation and issues they are facing. As a result, it has been used by organisations trying to go ‘up the value chain’ and side-step harsh buying processes by having more consultative engagement with their customers. A wide range of companies has used it to help develop advisory businesses in this way. Laurie Young is the author of ‘Thought Leadership – Prompting Businesses to Think and Learn.’
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