Define Thought Leadership To Get Ahead

Successful pursuit of a thought leadership strategy means first defining your ambition. Start with this sound definition.

Are we on the same page?

I approach the topic having been involved in thought leadership efforts for a number of financial service companies that had varying levels of success with their thought leadership programs, where messages worked very well or less well, and the cultural and linguistic issues were identified and managed to different degrees. Perhaps the most important lesson I’ve learned from the experience is that a thought leadership effort requires a common understanding/definition of thought leadership. Otherwise, problems can arise.

One clear challenge for organizations that have either embraced or are intending to embrace thought leadership is to nail down exactly what kind of thought leadership they want to produce and identify their intended audience. The fact that the definition of the term ‘thought leadership’ remains elusive, and does not translate easily into foreign languages can severely hamper efforts in multinational firms to agree on a course of action. Even in situations where everyone speaks the same language, thought leadership often means different things to different people.

Also known as…

As far as business jargon goes, thought leadership is not the worst term out there. It does however lend itself to considerable confusion and misinterpretation due to its seemingly straightforward meaning. Variants on the term ‘thought leader’ exist, and range from equally serious constructs such as opinion leader or guru, to the more vernacular rock star or even ninja.

Pictured: Teenage Mutant Thought Leaders? By 専門店の即時から via Wikimedia Commons

Coming to terms

For my money, it’s hard to beat the definition provided by Clayton Christensen, professor at Harvard Business School, who in an interview stated:

“I would define a thought leader as someone who stands above subject-matter expertise and is an authority in their field. And they have to be able to prove that expertise with a track record. Think of it this way: subject-matter expertise resides within a company. Thought leadership resides within an industry. Thought leaders provide clarity, especially to industries that are in flux. They teach.”

At face value, the term ‘thought leadership’ suggests being at the forefront of innovation and the ability to offer new ideas. But this is a narrow view that–while fairly clear for an individual–hinges too much on a single person and thus makes it harder to apply to an entire company. To anchor thought leadership in a wider organizational context, I offer the following definition:

Thought leadership (n): the practice of achieving an ongoing dialogue using educational content that influences how your audience thinks in order to achieve recognition as a trusted expert in your field.

A thought leader plays 3 roles: 1) recognized expert, 2) valued communicator and 3) muse.

1. Recognized expert

It’s widely agreed that the designation of ‘thought leader’ is socially defined–that is, it’s a function of being perceived by others as such. The definition calls out the social nature of the concept by identifying an audience along with the role to which one aspires–that of trusted expert. It implies a relationship just as leadership does between leader and follower(s). Note that obtaining recognition as a trusted expert is the goal or stated objective here (‘in order to achieve’) which gives it a sense of purpose.

2. Valued communicator

This definition also offers an indication of how this occurs: through an exchange of ideas–educational content–that are both helpful (people find a use for it) and compelling–meaning that the audience values it so highly that they  strongly embrace and even shared it with other. It’s important to distinguish the kind of content that’s transmitted as thought leadership content from more garden-variety content such as product specifications or advertising which companies produce in abundance.

3. A muse

Describing the nature and impact of the type of content that is transmitted defines what kind of thought that we’re dealing with here. The message must be formulated in such a way that it leads the audience to change their way of thinking (influences or significantly alters the way they think)–that is, in receiving the message the audience cannot help but react, though how this is accomplished will vary. It may be done by re-framing a familiar issue and portraying solutions in a new light, offering up data that shocks or surprises, advocating actions that run counter to current practice, etc.

Now head that direction

This definition provides guidelines as to the actors, mechanics and purpose of thought leadership. As you can see, this interpretation strips away the sheen of thought leader as innovator or contemporary Einstein that consistently churns out groundbreaking ideas one after the other–a difficult if not impossible task.  By highlighting the audience and the nature of the content, it shifts the focus to that of a strategic communicator acting as a guide to prospective and existing clients. It also places thought leadership squarely in the realm of content marketing.

Leverage Your Market Sizing to Raise Your Profile in 5 Steps

If you already do market sizing, use that as fuel for content that raises your firm’s profile.

When it comes to business, certain bits of information are essential for us to put a firm or its products into context. The size of the market is one such tidbit. It allows us to grasp how a firm ranks versus its competitors, shows whether its share of the pie is growing or shrinking, and how the pie itself is growing or shrinking.

Picture of pie
Pictured: The pie (that I made myself that was every bit as delicious as it looks)

Show me the pie

Market sizing is curious activity. It can consume a lot of resources and serve as a key input for strategy and investment discussions. It’s also closely guarded and rarely communicated outside of the company. There is, however, a reason to use key figures from the exercise: namely, to gain credibility with stakeholders including clients, prospects and the media.

Minimum required information

In some cases, the size of the market is a basic data point that you have to provide prospects in order to gain their custom. In financial services, investors will want to know how an asset class compares to what they already hold in their portfolio. Institutional investors are looking to gauge capacity issues. Any basic case for investment type of material will detail both the primary and secondary market volumes: the first in total outstanding and the second in yearly amounts. In other sectors, clients may be completely indifferent to these considerations–though you can still leverage the data to gain an advantage.

Here are a few tips for turning market size figures into thought leadership:

1. Choose the market

You have 2 options: either size the market for your product (choose 1 category) or for your clients’ products (again, choose 1 category). With the former, you position yourself as being knowledgeable about your own activity–a step down the path of demonstrating expertise and later thought leadership. With the latter, where your clients compete globally and their production volumes (supply) have an impact on prices (demand)–you’re offering them a kind of customer service to help them better understand their industry and competitive context (B2B service).

Pick one. I’ve seen either work for different firms.

2. Confirm the target

I meant to do that.

Is there a common understanding of annual market turnover? For a product such as smartphones, the answer is clearly yes. Those manufacturers release regular reports on the number of products sold. For public firms, it’s a clear factor for revenue and earnings projections closely followed by analysts. No mystery there.

If you’re tackling more of a niche sector that may be highly fragmented and there doesn’t appear to be a trusted source of this data, that’s a sign you have an opportunity to build a common reference point for the industry. (Bear in mind that consultants and market research firms will also be fishing in these waters).

3. Pull back the curtain

Is anybody out there?

Share some of your key figures with the outside world. Start with where you’re at today, or perhaps fill in the past few quarters or years to provide context and show a trend. Be descriptive. From there, you can begin to discuss trends and factors that influence them. It’s an opportunity to speak to clients about those trends, and for you to solicit their views. For highly regulated or compliance-sensitive sectors, it gives you the chance to talk about something other than product when you have a public platform (live event, webinar, etc.).

4. Be bold

If you’ve got the courage and internal support, give your views on where the market is headed in the future. Make a projection. Caution: this one can be intimidating for many folks. If you can stomach it, you’ll benefit from the anchoring effect. In essence,  Being the first to put a number out will tie the discussion around your reference point. Clients and journalists may go around asking your competitors for their views/estimates, but largely to compare with your figure. You gain the lead.

5. Rinse, repeat

The source of all marketing strategy, less dandruff

Marketing basically follows the instructions on your shampoo bottle. Repetition is key, so insert your market figures into discussions with clients, journalists, etc. And if you gain traction, plan to repeat the exercise on a regular basis (probably quarterly or yearly). Good luck.


How NOT to Write a White Paper

New York Zoological Society - Picture on Early Office Museum Public Domain File:Monkey-typing.jpg Created: 1 January 1907

Your client has amassed a wealth of evidence in support of purchasing Solution A. The problem: you don’t offer Solution A. You have Solution B. You’re faced with having to engage the client in a dialogue about the results of their research and analysis (which speaks against your Solution B) to somehow steer them into reconsidering their impending decision.

You opt for what many B2B firms do in this situation: scramble to create some thought leadership that portrays your company and your products in the most attractive light possible, given the circumstances.

At this point, you recruit a few colleagues to launch a response –a white paper– the go-to format because, hey, it even sounds impressive.

Here’s what NOT to do.

Start with a tired metaphor

Relate every element of the client’s situation to some unoriginal and unentertaining other situation that conveys corporate inspiration. Classic example? The race car. Whether you go for Formula 1 or Nascar, it’s got all the elements of business imagery: competition, teamwork, engineering, high performance and so on. Because when clients look to solve real life business problems, they prefer to do so while imagining themselves as Speed Racer.

If you’re feeling more creative, reach for something more imaginative. If you’re offering cloud computing, why not a Jack and the Beanstalk metaphor? I’m sure there are clouds in that story. Even seemingly apt metaphors can be considered groan-worthy depending upon your audience. Japanese prime minister Shinzo Abe’s efforts to revitalize Japan’s economy rely upon ‘three arrows’ which come from a folktale–variants of which are found throughout the region, sometimes replacing arrows with chopsticks.

If those are too mundane, aim for the non-sensical. I’ll never forget one piece that read ‘it remains to be seen whether the proposed regulations will become an all-singing all-dancing cabaret.’ Not particularly meaningful, but certainly memorable.

Stack the deck

The devil is in the details, so weigh them in your favor. Provide a perfunctory sketch of Solution A, then devote most of your time explaining the inner workings, advantages and benefits of Solution B. Yours will seem more tangible. Even better, introduce a few permutations of Solution B –let’s call them Solution C and Solution D– and then compare all four options. The amount of discussion dedicated to Solution A will shrink considerably. Whatever you do, avoid an apples-to-apples comparison of Solution A and Solution B. Switch out one of the apples for a banana, a pear and a kiwi.

Cloud the issue

Your client has set out a chain of logical steps supported by evidence that point them to a clear destination. Create diversions and set up ambushes at each step along the way. Plant a field of straw men. Pile irrelevant information and spurious relationships into a big, messy heap. Do anything you can to turn their road map into a jumbled maze. Put lots of focus on the least important elements–particularly if they play to your strengths.

Go on the offensive

You’ll want to put forward your own analysis–something that sounds good without committing to any claims that could be challenged. This will require you to stay vague. Couch any claims in broad generalities or use conditional language to deliver purely hypothetical scenarios. Imply unsubstantiated facts or buttress your own view with ‘common sense’ applied to a technical field where it likely doesn’t belong. Minimize the preponderance of quantitative evidence with infinitely sparse counterexamples to cast doubt on Solution A. Because even if the expected results have an incredibly high likelihood of occurring –let’s say 99.1%– there’s a miniscule chance — the remaining 0.9%– that something else happens; for example, that the results disappoint. Play to that uncertainty. If that doesn’t work, invent unlikely consequences of Solution A and embellish every gory detail. Remember, so long as you’re exploring hypothetical cases, you cannot be proven wrong.

Appeal to emotion, not reason

To the greatest extent possible, you’ll want to avoid precise construction of logical arguments. Since you won’t have numbers that speak in your favor, it’s best to hammer on emotional appeals. Wield flattery, indulge your audience’s overconfidence (e.g. how a large majority of people consider themselves better-than-average drivers which is statistically impossible), and then scare the daylights out of them with what could be the most effective emotion in B2B sales: FOMO, the fear of missing out. Remind your audience of all the theoretical benefits of your Solution B and how horrible it would be for them if someone else had them first. This plays to the herd mentality that underpins decision-making in more than a few sectors. Alternatively, exaggerate their initial acceptance of Solution A into a forever-binding, static commitment that locks them into an eternity of inflexibility and disadvantages galore. Or, on a lighter note, when possible create a ‘cool factor’ that makes your Solution B more awesome than Solution A.

Sell your product, not your ideas

You never want to miss an opportunity to sell. Your sales team will probably discuss this white paper with the client, so make sure to pack all the key features of your product(s) into the document AND talk about your firm’s capabilities. Make it all about you. Be sure to throw in the copy from your last ad campaign–because repetition is an effective tool. An effective tool. Repetition.

But seriously

Why would anyone write a white paper as disastrously described above? Good question. Unfortunately, plenty of firms cram (sometimes desperate) sales content into a white paper format and, in doing so, frustrate their clients. It doesn’t have to be this way. White papers and other thought leadership materials are meant for firms to demonstrate their expertise and help find solutions–not to sew confusion.

Tips to keep in mind when writing a white paper:

  • A tired metaphor shows lack of originality and can distract from the matter at hand.
  • Stacking the deck by skewing the arguments in your favor can stray too far from the objectivity required to match a business need to a solution.
  • Your audience expects clarity, so provide it. Clouding the issue undermines your apparent mastery of the topic and makes you less credible in their eyes.
  • Try to avoid emotional appeals (they’re cheap and difficult to fit into organizational decision-making), or at the very least, balance the rational and emotional appeals.
  • Avoid selling. Audiences will shout out commercial messages–particularly where they don’t belong.

Why Asset Managers ‘Do’ Thought Leadership

Few asset managers lack the ambition to be recognized as a thought leader. Many publish white papers and studies on a regular basis.  Some unequivocally stamp sections of their websites with the ‘thought leadership’ label just to dispel any remaining ambiguity of purpose. What is less clear, however, is WHY they do it. It’s useful to look at the purpose thought leadership serves.

I had the good fortune of speaking with the head of an investment team who addressed the question in a recent client meeting. (All names have been withheld to protect the innocent). The actual question was “so why do you do thought leadership activities?” I find the answer incredibly instructive.

There are many reasons for asset managers to conduct thought leadership, namely:

Thought leadership helps provide structure and promotes rigorous thinking.

In the context of ever-evolving markets, investment and research teams tackle interesting and important questions every day. Rendering that output in an accessible, external form forces you to construct a compelling narrative that leads the audience from the introduction all the way to the conclusion. It sounds simple. Logical missteps or unanswered questions are not permitted. The benefit here largely goes to the team undertaking the activity, in that it raises the quality of analysis and communication.

Thought leadership fosters innovation and product development.

If you have a new client request or regulatory change, you have an impetus for identifying a solution. The path you take to tease out the right approach and the client’s decision (e.g. change strategy, shift assets, adopt a new framework), along with the final outcome–the client’s success–form the crux of a case study. Investors (whether they admit it or not) often exhibit a herd mentality. This is not a criticism. There are several reasons investors should care a great deal about what others are doing–not least because whole groups of investors share similar concerns. For asset managers, sharing that knowledge and client ‘win’ with the outside world makes good business sense, because it can bring the ‘lessons learned’ to a broader audience for whom it can be quite relevant.

Thought leadership allows managers to differentiate and deliver more than ‘just’ financial performance.

Lots of players on (often) clearly demarcated fields mean it’s rather difficult to stand apart from the herd among, for example, first quartile US large cap strategies. Investment management is tricky, in that while delivering strong performance trumps all else, there’s still the ‘else.’ Investors value clear, timely and insightful communication. Anything you can deliver that lights up their ‘priorities radar’ — be it a market or regulatory outlook, new portfolio construction techniques, or investment committee best practices — can strengthen the manager-investor relationship.

Thought leadership creates awareness.

Clients of professional services firms often prove willing to lend their attention to insights,  new solutions or trends–especially when it’s about ‘them’ and their area of activity. Thought leadership content with real substance stands out from what Jack Bogle dismisses as ‘financial pornography.’ All other things being equal, a thought leadership piece will garner substantially more client engagement than a product launch press release. Journalists give greater consideration to the former. It’s not hard to understand why. Thought leadership materials create an opportunity to engage with journalists in a more meaningful way–the clear advantage being that discussions with journalists translate into press coverage, boosting brand awareness and credibility, as any PR manager will tell you.

What’s more, for asset managers that have adopted ‘cause marketing’ either bolted-on (more common) or as a founding principle (think Generation IM)–a broad category that could span activist hedge funds, green investing boutiques, long-only managers with a focus on corporate governance, or more ‘plain vanilla’ shops with a specific corporate social responsibility focus (i.e. workplace diversity, a low-carbon future, etc.)–raising awareness on a particular topic counts itself as a win.

A win for all

While this list of reasons why asset managers do thought leadership may not be comprehensive, it certainly puts forward a number of valid purposes that can serve to inform an asset managers’ thought leadership activities. Coupled with the ways that thought leadership can add value for investors, it provides key elements for making thought leadership a mutually-beneficial proposition for asset managers and investors alike.

What’s your view? Are there other reasons for asset managers to conduct thought leadership programs, in your opinion?  Do you think that thought leadership is worth the effort, and that it ‘pays off’ for all parties involved?

The Fight Club Rule of Thought Leadership

Views, advice and opinions on thought leadership abound. Trawl the world wide web long enough and you’ll stumble across debates about the ‘real’ definition of thought leadership or whether a company (rather than a person) can be a thought leader. The Fight Club rule of thought leadership, on the other hand, enjoys seemingly unanimous agreement.

The first rule of thought leadership is you do not talk about thought leadership.

It’s difficult to pinpoint the precise origins of the Fight Club rule of thought leadership. I make no claims as to authorship. You can find recent posts referring to the rule here, here and also here. (Sidebar: the formulaic first rule of Fight Club lends itself to pretty much any business or social media topic, which means there’s a whole section of the internet dedicated to corporate riffing of a single line from a 1999 movie. Why it’s reappeared after 14 years is anyone’s guess–possibly an interesting observation related to demographics and blogging).

 In practice, there are two corollaries to the rule.

 Corollary 1: You do not apply the moniker ‘thought leader’ to you or your colleagues.

This morning while eating breakfast I saw a guest political consultant on a news program call himself a ‘rock star’ on national television. The fact that he did so to prove a point he was making nearly caused me to spit half-chewed cereal and milk across the kitchen. The lesson? If you choose to behave like that you’ll probably come across as boastful, arrogant, pretentious, or just plain silly.

 Self-proclaiming yourself a thought leader is counterproductive to your desire to be seen as an expert. Audiences will be less receptive to your message. Know-it-alls tend to monopolize the conversation and be more close-minded: two things aspiring thought leaders should avoid at all costs.  Also, a recent study shows that people suffering from narcissistic personality disorder have fewer brain cells in a certain region of their brains…which means you risk being a few sticks short of a full croquet set (kidding: the science is still out on that one).

While there’s not a single, agreed definition of the term thought leader, most online commentators tend to agree that it’s a mantle bestowed upon an expert earned through years of hard work in an industry. Fly-by-nights and self-promoters need not apply.

Corollary 2: You do not apply the moniker ‘thought leadership’ to the materials you publish or the words you speak aloud.

You’ll find the term thought leadership plastered on brochures, web pages, smartphone apps, etc. This is also a no-no, for the same reasons as Corollary 1. This one proves tricky, though, because while it’s easy to follow, the genie is already out of the bottle. The IBM Institute for Business Value, for example, offers “leading edge thought leadership and practical insights for business executives.” SAP’s website offers thought leadership by topic. Both firms are frequently cited for the high quality of their thought leadership platforms. Does the label ‘thought leadership’ irritate their B2B audiences? Not enough to make the practice obsolete, obviously. In the financial services industry–my sandbox, so I won’t name names–plenty of firms similarly group white papers and other materials on a landing page under the banner of thought leadership.

The bottom line.

Not every company reaches the point of being recognized as a thought leader. Those firms and individuals that are successful appear to respect Corollary 1 and portray at least an outward appearance of humility. So it makes sense to respect Corollary 1. Clearly, the same cannot be said for Corollary 2, which appears to be more of a stylistic preference than a hard-and-fast rule. Ultimately, you’ll gain agreement within your organization as to whether you follow the Fight Club rule of thought leadership and its corollaries.

Do you follow the Fight Club rule of thought leadership and its corollaries? Do you know of any other generally-accepted rules to conducting thought leadership?

How Asset Managers’ Thought Leadership Creates Value for Investors

Not everyone is convinced that an asset managers’ thought leadership content in its various guises–email, video, slides, events and long-form articles–can add value for its audience of investors.

According to critics, thought leadership amounts to a mundane, me-too effort that succeeds only in killing trees and filling pixels in a way that provides sales teams something to shove in front of prospects and clients–just like the competition does. While these naysayers may often be justified in their cynicism, especially regarding mediocre content, it’s not always the case: successful thought leadership can create value for investors.

Thought leadership, simply defined, is a company’s effort to communicate innovative and compelling analysis/information that proves useful to the audience, thus driving the business relationship forward. It’s necessarily differentiated from that of other firms, because it’s meant to support that particular company’s relationship with the intended audience (often a specific type of investor). The firm expends time and resources, and expects a return on the investment in the form of higher profits in the future. It’s a fine proposition for the manager, but what can it offer investors?

An asset manager’s thought leadership can deliver three kinds of value to investors:

  1. Technical value
  2. Personal value
  3. Social value

Knowledge, or technical value.

Financial markets evolve constantly, with new types of investment strategies and even asset classes emerging from the sheer force of innovation. Investing today is not the same game it was 50 years ago, wen investing in timber meant that you had a pile of wood, and quantitative computer models that generate buy/sell lists or machines that trade at fractions of a second were not readily available (to say the least).

Thought leadership provides investors with information about new strategies or product offerings, along with explanation of how they work and how to put those products to use within a broader investment plan. To be effective, it must be clear, well-structured, and explicitly tie the key messages to the investor’s objectives. Successful thought leadership in financial services hinges on investors’ needs and paints a full picture of both the risks and potential rewards linked to a given trend, strategy, or asset class.

Successful thought leadership in financial services hinges on investors’ needs and paints a full picture of both the risks and potential rewards linked to a given trend, strategy, or asset class.

Reassurance/confidence, or personal value.

It would be as mistake to categorize investors as simply rational. While sophisticated investors tend to be quite rational, comfortable with models and financial calculations, there is an emotional element to even the most rational psyches. Providing a case for investment or current macro economic analysis that supports their way of thinking can reassure them in feeling that they have made the right decision (to invest or not, choice of product, timing). The audience can use this confidence to persuade other people (especially other members of the decision-making unit such as investment committees) to accept their view.

Acknowledgement/notoriety, or social value.

Thought leadership can, and often should, engage the audience in the discussion. A case study, for example, where a firm goes out and interviews clients could be distributed as part of a thought leadership effort. The interviewee, giving answers if not also ideas, receives recognition of his/her peers. It also provides recognition that the company 1) really listens to its clients and 2) has experience addressing the needs of that type of investor.

Taking a look at these three kinds of value (technical, personal and social), the impact of thought leadership will vary depending on the particular audience member and the effort the firm makes to leverage the value created. In most cases whether a household or large institution, the investor is not a single person, and the decision-making process involves multiple individuals in multiple roles, such as those acting as a gatekeeper, providing advice, approving the final decision, etc. Whether it’s a member of an investment committee, an adviser, or even a spouse, the individual can make use of technical, personal, or social value—or a combination thereof—in the way they see fit.

Whether it’s a member of an investment committee, an adviser, or even a spouse, the individual can make use of technical, personal, or social value—or a combination thereof—in the way they see fit.

A company well-equipped to aid them in realizing this value will engage the audience by delivering pertinent content as part of a broader consultative selling process in order to grow the relationship. In financial terms, the consultative selling process backed by successful thought leadership can, but does not always, translate value into better financial performance (risk-adjusted return, better diversification, avoidance of loss) for the investor.

So, what do you think? Do you know of any other ways that asset managers’ thought leadership can create value for investors?