The term ‘thought leader’ seems as much in vogue today as ‘digital media expert’ was yesterday and has quickly become a new paradigm for how businesses market themselves. To separate the hype from the substance this post looks back at the origins of the thought leadership industry and looks forward to some of the issues driving this critical business subject in the years ahead.
The impact of macro-economic instability, combined with the rapid adoption of social and business networks and a collapse of traditional business beliefs has in some ways created a type of leadership vacuum. Some companies see this as a chance to influence the way their markets think at a much faster rate than was possible in the past. Using business information, insights and ideas they’re arming thought leadership strategies with more gravitas and noticing a significant correlation between their reputation and their perception as ‘thought leaders’.
Whilst the business case stacks up the route to creating effective thought leadership campaigns is becoming more complex. There is already an abundance of commercial information and content and communication channels to ferry them to market. Even the most road-worthy insights and ideas don’t travel far in gridlock. To ensure that their ambitions to be ‘followed’ are matched by an ability to be influencers, companies need to know more about the business of thought leadership and what is involved in becoming a master of the genre.
A brief history of thought leadership. Joel Kurtzman, editor-in-chief of Strategy and Business, the magazine of the management consulting firm Booz Allen Hamilton, is generally credited with creating the term “thought leadership” – back in the 1990s.But its origins go back still further to the 1960s, when the strategy consultancy McKinsey & Company launched McKinsey Quarterly. As a relatively new profession lacking the rules and regulations and associated gravitas of lawyers and accountants, management consultants craved respectability and so it is probably not coincidence that the management journal resembled an academic publication.
But then McKinsey went a step further – effectively inventing the management book bestseller with 1981’s “In Search of Excellence”. The book made a guru of co-author Tom Peters and helped pave the way for all those books that now compete for the attention of business travellers at airports across the world. Suddenly, marketing became a significant activity at firms that not so long before had been almost secretive. Before long, management consultancies were sponsoring golf tournaments and other sporting events to almost the same extent as their corporate clients.With its stories of how McKinsey had helped clients overcome problems and seize competitive advantage, it also served as a powerful marketing tool – appearing in the offices of many leading executives. Not surprisingly, other firms adopted the policy and serious-looking journals began to proliferate.
At the same time, the convergence of information technology services and traditional consulting helped change the ways in which firms came up with their ideas. This included a shift towards more programmatic research which focused more on the business operations and management implications of IT and less on issues around products and vendors. By the early 1990s, IT consultancies like Index Group had launched several such programmes out of which came the concept of “business re-engineering.” This was described in the book by Hammer and James Champny that became a bestseller to rival In Search of Excellence. Reengineering ultimately became a multibillion-dollar consulting industry and the fuel behind Index’s growth from $30 million in revenue in 1987 to $250 million by 1995.
As the race to be first to come up with “the next big thing” intensified, other consulting firms formed or acquired thought leadership R&D organisations. But the game was changing. Originally, management consultancy – particularly as practised by the likes of McKinsey, Boston Consulting Group and Bain – was a fairly private exercise involving briefings and reports for senior executives only. The consultants were not unlike the officers of a club that dispensed its secrets to a chosen few. Over recent decades, though, there has been increasing access to data and methodologies, particularly in the decade or so since the development of the internet.
If knowledge was no longer power, the consultancies had to take a different approach and promote themselves and some of their key personnel as “thought leaders” spending heavily on marketing to keep themselves in their customers’ sights. Nor were they the only ones. Firms in every leading business sector from advertising and marketing to finance and energy invested large sums on publishing articles and books, printing whole management journals, running seminars, speaking at public conferences and, more recently, creating topic-focused websites.
Thought leadership today. The problem is that when the field is so crowded confusion rather than insight reigns. In a more transparent and less deferential world, it’s easy to confuse being heard with being heeded. Ceaseless chatter within the crowd can mean that nobody’s message really gets through. So will ‘thought leadership’ go full circle and end up as yesterday’s business fad or will it break through into new circles and re-merit attention?
The most noticeable feature of the thought leadership business today is that traditional ways of developing ideas that merit attention no longer seem to apply. Whilst the consultancies are as prevalent as before, smart thinking is now as likely to come from inside client companies as from external advisors. Equally, ideas are as likely to emerge from the lower levels of management hierarchies as they are from the top of organisations. They may even emerge from individuals who are only very loosely connected to the enterprise.
The first challenge for aspirant thought leaders is how to be a leading light among many. The one downside of a more collaborative age is that every idea has many times more apologists than used to be the case and the task of leading thinking involves a broader community of contributors than was previously possible or practical.
Beyond the challenge of accreditation, the major obstacle many companies face remains that of insight conception. When every element of contemporary business life is changing at speeds last seen at the peak of former industrial revolutions, the difficulty of creating durable insights is considerable. From the way companies work to how they use and make money, core business behaviour is now fundamentally different from how it was 10-years ago, and the differences will be even more pronounced in 10-years time. All of which makes the challenge for aspirant thought leaders doubly complex. They not only need to understand the changing business dynamics of today but they also have to anticipate and interpret their effect as they unveil themselves.
The good news is that, just as in former industrial cycles, the key engines of commercial change are highly visible and increasingly predictable. In our case, information technology rather than steam has become the agent of change, affecting all aspects of company life as they emerge. In such a context it’s no surprise that the thought leaders of yesterday might struggle to be the those of tomorrow. It’s impossible to think of a sector that is remotely the same as it was a decade ago, when Apple was an ailing computer brand and Facebook didn’t exist. Therefore it’s no surprise that the companies and organisations of real influence are often technology firms. If you know where the railway tracks are heading you might have a better idea than most about what’s in store at the end of the line.
Fortunately, technology companies do not have a monopoly of the future. The opportunity to see what’s heading down the track exists for everyone if you know where to look. And in times of great uncertainty the value of leading the thinking about what happens next in your field or sector is doubly valuable. Many of the world’s largest companies already know this. Shell has a 15-person global business unit which publishes summaries of its long-range scenarios. GlaxoSmithKline operates a think-tank that looks at scientific developments likely to shape ‘Big Pharma’ in the next 15 years and the discipline of scenario planning is far more widely embedded in corporate planning than a decade ago.
Yet here’s the contradiction. You don’t have to be a big company to merit attention anymore. Very often you don’t even have to be a company, as many of the world’s most followed business experts so capably prove. With communication increasingly driven by social media activity it is individuals rather than enterprises that tend to be ‘followed’. As a consequence, the challenge for aspirant companies is to work with this phenomenon and leverage the power of their own ‘crowd’ to more telling effect. By doing this they not only benefit from the greater bandwidth brought about by a more distributed thought leadership approach, they also send a signal to the marketplace that their personnel are empowered to think, which can be thoroughly contagious in itself.