Rethinking thought leadership as an operating principle

Thought leadership risks becoming an empty marketing phrase just as it becomes essential to long term success. In an idea economy more and more firms understand the importance of getting credit for being on the leading edge, but getting credit is best preceded by actually being there. Organizations that depend on generating and exploiting ideas need to become more systematic about integrating thought leadership into their operating principles and practices not just their marketing.

Value of thought leadership

How many of today’s successful organizations are built on top of better ideas? Some, like FedEx or Southwest Airlines, were built on top of a powerful core idea. Others, like Amazon or Apple, were built on a powerful core plus ongoing extension and elaboration of that core with new ideas. Still others, like the best professional services firms, depend on a steady stream of new ideas.

If you’re fortunate enough to come up with a FedEx or Southwest quality idea, ongoing thought leadership isn’t much of an issue and you can focus your organizational energies on execution. On the other hand, if you’re in an organization or industry where the half-life of ideas is continuing to shrink, then you need a more explicit strategy than waiting for the next flash of entrepreneurial genius.

There have been many attempts to make thought leadership more manageable. These range from the full fledged research labs of large organizations (e.g.,  Xerox PARC, Microsoft Research, IBM Research, Bell Labs) to various research centers in professional services firms (e.g., Deloitte Center for the Edge, McKinsey Global Institute, Accenture Global Research).

Most of these examples separate research from practice and model themselves along academic lines. While they often produce excellent work and contribute to the overall market reputation of their parent organizations, they have been less successful at leveraging the experience of their parents or at feeding their insights back into their organizations. These examples also stamp thought leadership as a luxury available only to the largest and most successful organizations.

Where we went off track

While we can recognize the value of thought leadership as a component of innovation and of attracting new customers, we’ve had less success in transforming thought leadership into something systematic and manageable. While the end products of thought leadership are attractive, they shed limited light on what practices contribute to those end products.

Thought leadership presents a situation where working backwards isn’t helpful. Seeing the marketing and reputational value of a published article, senior executives will call their Chief Marketing Officers and order an article for the next issue of the Harvard Business Review. Wise CMOs, recognizing that this request has not come from someone named Gates, or Buffet, or Welch, will negotiate a more plausible timeline, identify some plausible topics, and search for potential authors within the organization.

With a great deal of luck and effort, this approach might yield an article in a year or so. Successful or not, marketing has now come to own the thought leadership problem. If the focus remains on the end products, which is likely, marketing will pursue opportunities to create materials that can easily be used as marketing and sales collateral. Perhaps they will enlist help from customer service or training groups to leverage their materials as input to the process as well.

This is a classic confusion of form over substance. At an extreme, we see such nonsense as Gartner Group trumpeting TLM (thought leadership marketing) as the next frontier for IT services marketing. Somewhat more sensibly, we see a variety of marketing and PR consultants pushing thought leadership as a key marketing strategy. Some good recent examples include:

Getting back on track

Whatever the marketing value of thought leadership, it is secondary to the operational value of increasing the effectiveness of how an organization learns from and disseminates practice. When you recast thought leadership as a core operating principle instead of ancillary marketing program, several implication follow. First, it changes what you recognize as relevant data. Second, it changes the kinds of support you provide to your front line practitioners. Finally, it shapes the practices you promote among your workforce.

Where you see data

A survey of current customers or prospects often passes for data in faux thought leadership attempts. Or, a few thin paragraphs passing as a case study. The insights that fuel real thought leadership flow from the interaction of rich data and penetrating questions. Those are typically found at the edges of current practice.

Organizations will find their richest data in the histories and traces of those projects that challenge their capabilities and are placed in the hands of their most adept staff. It’s often difficult to know in advance which projects will fall into this category. More often, it’s easier to predict that certain efforts will likely be routine.

How you support the field

The best time to collect this rich field data is as it’s being generated. The greater the delay between action and reflection, the more that real insight is displaced by revisionist history. Organizationally, you can provide systems and tools that make it simpler to capture and catalog working papers and work products as they are created. Second, organizations can set aside the time and create expectations that professionals will reflect on their work as they perform it.

What practices make a difference

Despite the fervent wishes of bureaucrats, the kind of reflection and learning from practice that fuel meaningful thought leadership won’t map into standard operating procedures or fixed processes. It is much more fruitful to think in terms of practices to encourage. At the team level, for example, After Action Reviews are a simple practice to amplify learning among the team.

Individual practices can range from debriefing a meeting over a beer to maintaining a journal of questions and reflections. The journal could be as simple as a Moleskine notebook or as extensive as a private blog.

Payoff to knowledge workers and their organizations

Treating thought leadership as a marketing responsibility does create organizational value, but at a significant cost in terms of effort and disruption within the organization. Marketing staff need the full support and participation of those line contributors generating the experience on which thought leadership must be based but if they drive thought leadership efforts from their immediate needs they risk alienating those on whom they most depend with requests for substantial incremental work.

On the other hand, treating thought leadership as an operating principle better aligns the demands on those core contributors. Now, rich, high quality input to thought leadership efforts are relevant components of ongoing work. Moreover, this approach enhances individual and organizational learning as a primary goal; thought leadership becomes a valuable side effect of doing work, instead of being an onerous additional requirement.

Professionals grow and develop through reflective practice. They build and test mini-theories of how their actions lead to outcomes. In a simpler world, that reflection was built on the slow accretion of experience. In today’s world, it is more effective to build on a foundation of explicit reflection.

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Can you design business models? A review of "Seizing the White Space."

[cross posted at FASTforward blog]

Seizing the White Space: Business Model Innovation for Growth and Renewal, Johnson, Mark W.

What is a "business model" and can you create a new one in a systematic and disciplined way? That’s the question that Mark Johnson, chairman of the consulting firm Innosight, sets for himself in Seizing the White Space.

The term entered the popular business lexicon during the dotcom boom in the late 1990s. There wasn’t any particular definition behind the term at the outset. Effectively, it was shorthand for the answer to question zero about any business – "How are we planning to make money?" Before the dotcom boom, nine times out of ten, the answer was "we’ll copy what Company X is doing and execute better than they do." During the boom, the answer seemed to be "we have absolutely no idea, but it’s going to be great." Now we recognize that both of those answers are weak and that we need some theory to design answers that are likely to be successful.

Over the last decade and a half, there’s been a steady stream of excellent thought and research focuses on building that theory. One of the major tributaries in that stream has been the work of Clay Christensen on disruptive innovation. Christensen and his colleagues, including Johnson, have been engaged in a multi-year action research program working out the details and practical implications of the theory of disruptive innovation. Seizing the White Space is the latest installment in this effort and is best understood if you’ve already invested in understanding what has come before.

Johnson starts with a definition of white space as

the range of potential activities not defined or addressed by the company’s current business model, that is, the opportunities outside its core and beyond its adjacencies that require a different business model to exploit

p.7

Why do organizations need to worry about white space? Even with success at exploiting their current business model and serving existing customers, organizations reach a point where they can’t meet their growth goals. Many an ill-considered acquisition has been pursued to plug this growth gap. Haphazard efforts at innovations to create new products or services or enter new markets get their share of the action.

Johnson combines an examination of white space and business models in an effort to bring some more order and discipline to the challenge of filling those growth gaps. One implication of this approach is that the primary audience for his advice is existing organizations with existing successful business models. He is less interested in how disruptive innovation processes apply in start up situations.

Johnson’s model of business models is deceptively simple. He illustrates it with the following diagram:

Johnson-WhiteSpace-Four-BoxBusinessModel

Johnson expands the next level of detail for each of these elements. Most of that is straightforward. More importantly, this model places its emphasis on the importance of balancing each of these elements against the others.

In the middle third of the book, Johnson takes a deeper look at white space, dividing it into white space within, beyond, and between which correspond to transforming existing markets, creating new markets, and dealing with industry discontinuity. It’s a bit clever for my tastes, but it does provide Johnson with the opportunity to examine a series of illuminating cases including Dow Corning’s Xiameter, Hilti’s tool management and leasing program, Hindustan Unilever’s Shakti Initiative, and Better Place’s attempt to reconceptualize electric vehicles. While the organization of the stories is a bit too clever, it does serve a useful purpose. It takes a potentially skeptical reader from the familiar to the unfamiliar as they wrap their heads around Johnson’s ideas.

With a basic model and a collection of concrete examples in hand, the last third of the book lays out an approach to making business model innovation a repeatable process. This process starts from what has evolved into a core element of Christensen’s theories – the notion of "jobs to be done." This is an update on Ted Levitt’s old marketing saw that a customer isn’t in the store to buy a drill but to make a hole. The problem is that most established marketers forget Levitt’s point shortly after they leave business school and get wrapped up instead in pushing the products and services that already exist. "Jobs to be done" is an effort to persuade organizations to go back to the necessary open-ended research about customer behavior and needs that leads to deep insight about potential new products and services.

With insight into potential jobs to be done, Johnson’s four-box model provides the structure to design a business model to accomplish the job to be done. In his exposition, he works his way through each of the four boxes, offering up suggestions and examples at each point. With a potentially viable design in hand, he shifts to considerations of implementation and, here, emphasizes that the early stages of implementation need to focus on testing, tuning, and revising the assumptions built into the prospective business model.

Johnson clearly understands that creating a new business model is a design effort not an execution effort. Seizing the White Space puts shape and structure underneath this design process. All books represent compromises. The compromise that Johnson has made is to make this design process appear more linear and structured than it can ever be in practice. He knows that it isn’t in his emphasis on the need to balance the elements of a business model and  to learn during the early stages of implementation. There’s a reason that the arrows in his four-box model flow both ways. I’m not sure every reader will pick up on that nuance.

He also clearly points out the role of learning from failures as well as successes during implementation. But the demands of fitting the story into a finite space again undercut this central lesson. The models here will go a long way toward making business model design more manageable, but they can’t make it neat and orderly.

This review is part of a "blogger book tour" that Renee Hopkins, editor of Strategy and Innovation and Innoblog, arranged.

Previous stops on the tour:

Upcoming stops

If you’re interested in digging deeper into the work of Clay Christensen and his posse, here are some previous posts where I’ve pulled together some reviews and pointers. I hope you find them helpful.