Many B2B companies (and not only professional services firms) are investing vast sums today to be regarded as “thought leaders” – as renowned experts on the issues their products and services address.
One very large professional firm that we know of estimates spending at least $150 million annually on it. Another (Accenture) in its Securities and Exchange Commission filings discloses spending nearly $4 billion of its $28 billion in revenue on research, innovation, sales and marketing. In light of the reams of white papers, studies and other content it produces – one thought leadership tracker (Source for Consulting) says Accenture produces more thought leadership content than any other consulting firm -- some chunk of that money is going for thought leadership.
When any corporate activity gets expensive, it's time to assess whether it’s going in the right direction – i.e., whether it needs an overarching strategy. This is especially the case with decentralized initiatives, which is the way thought leadership is practiced in most firms we know. When a cavalry splinters into many different directions, it is easy to lose a battle. The same happens with thought leadership initiatives: multiple parties work independently to create content on the same issues, which means they lose the opportunity to pool their resources and dive deeper; messages created by one unit squarely contradict those of another unit; and rogue efforts explore topics that have little to do with the company’s core business and thus become a distraction.
All to say that in many B2B firms, the time for having an effective thought leadership strategy is now. From our work, with see seven core elements of a sound thought leadership strategy (see exhibit). The first one is that top management clearly understands what thought leadership is and why it’s essential to the firm’s success. That is, a firm’s thought leadership strategy needs to be viewed as an essential part of its overall business strategy.
Sounds pretty elementary, right? In fact, we took it for granted until one of our sharpest clients (Serge Perignon of TCS) told us of the need to connect thought leadership strategy to overall strategy -- especially to business objectives defined at the top of the company. He’s dead right. We had fallen into the trap of assuming just because a company spends heavily on thought leadership that its senior executive team recognizes its value.
Yet from our experience, in most cases a big appetite at the top of a company for thought leadership doesn’t exist. Take professional services firms, where we’ve spent most of our time. In these firms, the CEO, managing director and CFO don’t question why their organization has sales people. (“They get the customer to buy our products/services.”) Or internal recruiters (“They find us employees whom we then bill out to generate revenue.”) Or a finance department (“Someone has to keep our books straight and make sure we collect on our invoices and pay our bills.”) But I doubt most of them could clearly explain to a Wall Street analyst how their thought leadership investments boost revenue and profit.
The problem with this, of course, is that when revenue begins to soften, top management questions investments whose purpose and returns they don’t fully understand. In many companies, thought leadership invariably will be one of them. But that isn’t the only problem when senior executives aren’t sold on thought leadership. The attitudes at the top trickle down to the subject experts in your firm – the professionals who need to be recognized as thought leaders by the market. The lawyers, consultants, accountants, or software architects whose expertise your firm sells won’t give you the time you need from them to codify and market their expertise.
So how do you get top management to see that thought leadership is vital to their and the company's success? How do you show that thought leadership strategy is an essential part of their strategy? We see four key aspects in making a compelling case:
- Explain how thought leadership supports the business strategy. For example, if part of your company’s business strategy is to increase sales of a particular set of products or services, describe how thought leadership could position those offerings as superior to competitors’ offerings and thus increase sales. If the strategy is to raise margins, show how thought leadership could do that (by making the company’s offerings more desirable). In professional services firms, I look at thought leadership content development as R&D, which I've written about before here. And I blogged about another aspect of this issue here.
- Show them the money. An important part of talking to top management about thought leadership is demonstrating that it works – that it has generated revenue and profit. Find examples in your organization of someone who used thought leadership content to open a client door and generate work. Those examples are out there. But they rarely just show up on your door. You have to mine them. When you find them, they can be gold.
- Let them take a test drive. Perhaps nothing will be more persuasive in making the case for thought leadership than having your CEO watch it work himself. What I’m saying is make him a thought leader on some topic, get him published and speaking in prestigious places, and then let him personally experience the kinds of inquiries that great thought leadership produces. I know of one consulting firm CEO who after becoming a widely recognized thought leader never wanted to run a consulting firm again. He wanted the public adulation of being recognized as a guru and a rainmaker.
- Use their vernacular. All of us evangelists of thought leadership have developed our own language, starting with the very term “thought leadership.” When we vouch for thought leadership, we must do so in terms and concepts with which the uninitiated are familiar – even if they sound elementary. Lay out with simple but inarguable logic how thought leadership can generate revenue.
Of course, these four steps will take time. But without them, thought leadership evangelists are unlikely to get top management to back even the most thoughtful thought leadership strategy.