A thought leader is an individual or company that clients, peers, and other stakeholders recognize as one of the foremost authorities in a selected field of expertise. True thought leaders give back to the business community or society, but also profit significantly from their status. In this article I’ll cover eight benefits of thought leadership from the company’s point of view.
Not every services-buying client sees thought leadership as critical. Based on my experience I would say that around 20 percent of clients favor leading visionary professionals. I got backing on this assertion from the recent Visible Experts℠ study by Hinge Marketing. In the study, around 19 percent of the clients said that they “want to work with the best.” On the other hand, the value of being a thought leader can be huge from an individual company’s point of view in all of its client relationships.
1 – Competitive advantage through differentiation
Companies try to create temporary monopolies or “Blue Oceans,” where competition is not as harsh as in run-of-the-mill businesses. Thought leadership is a way to create unique services or provide services that are hard to come by. In the right client and project combination, thought leaders have a competitive advantage over at least 80 percent of other firms in the same industry.
Being among the few opens up opportunities to gain global attention and attract the most valuable clients in the market. A good example is Hermann Tilke, a German engineer and auto racer. He turned his passion and innovative thinking into a company that is one of the four of Formula One motor racing circuit designers recognized by FIA.
2 – Brand reinforcement
Marketing professional services is demanding. It is basically selling the invisible. Developing and maintaining a thought leadership position in your domain is a springboard for marketing.
Being a thought leader leads to a unique selling proposition that stands out. This has both external and internal consequences. Clients associate the company’s brand with visionary thinking and leading edge knowledge. Employees see their company as a professionally demanding, but also a rewarding place to work.
Most of the companies I provide consulting services to are thought leaders. I’ve noticed how that position not only brings them personal esteem, but also enhances their company culture.
3 – Sales boost
Thought leadership has an effect on sales. In a survey by DesignIntelligence, more than 65 percent of AEC firms with thought leadership programs made a direct or indirect correlation between the program and new work.
Thought leaders don’t only land more high-quality work than their less prominent competitors. They are also invited to competitions and they receive limited RFPs.
Companies with a large portfolio of services benefit from cross selling. Experts can promote and sell work of other departments or disciplines in their company. Granlund, one of my clients, is a leader in energy efficient construction. Around that central idea they have developed specialized services and systems that cover the whole life cycle of a building, including design and management software.
4 – Increased profitability
Profitability is a critical dimension of a company’s success. Companies should consider all the elements affecting profitability: clients, fees, project types, marketing and sales efforts, project schedules, change management success, work productivity, partnerships, technologies, and value of expertise.
Thought leadership can increase profitability in two ways: creating higher than average margins and fostering internal efficiency and work quality.
Many companies lose money because their processes are inefficient and prone to errors that are expensive to fix. Companies also undervalue their expertise unnecessarily. Making thought leadership a keystone, firms become more confident in value-based pricing.
It is a known fact that getting new clients is time consuming and costly. Thought leadership facilitates deep and lasting customer relationships. That shortens sales cycles and strengthens the company’s position as a trusted partner.
5 – Improved offering through development and innovation
Thought leaders have to be ahead of the curve. As Arup, one of the leading AEC firms, declares: “Arup people are driven to discover new ways to turn ideas into tangible reality. This passion is behind many of the world’s iconic architectural, engineering, infrastructure and planning projects. It is also behind the firm’s relentless pursuit of technical excellence and willingness to invest in research and innovation.”
The forward-thinking attitude leads to improvements and innovation that lead to better services, which further increase the value that clients receive.
6 – Personal satisfaction
Individual thought leaders work harder than average. Traditional monetary rewards are not their primary motivations. Thought leaders are driven by passion to become the best and give their best to the world.
Giving professionals freedom to develop themselves and opportunities to create something completely new leads to great job satisfaction and unsurpassed productivity. Responsibility follows without patronage.
7 – Recession-proofing
Economic downturns hit AEC professionals when their clientele is unwilling to invest. Thought leadership can be a savior for many professionals, as new ideas and fresh approaches are in demand in dire economic situations.
Individuals who have been able to build a thought leader status are less likely to end up unemployed. They are resourceful and employers want to cling to them, even during layoffs. Thought leaders also find opportunities in new businesses if they have to give up the old one.
8 – Company value and growth
Eventually, thought leadership can be as valuable to a brand as the products or services it sells. A thought leader is a good investment for owners and investors. Large, listed companies have monitored the effect of thought leadership at a campaign level and have reported double digit growth in brand and stock value as a result. For example, IBM’s Smarter Planet campaign increased brand value by 20 percent and stock price by 64 percent.
Thought leadership at a company level is a strategic choice. It requires consistent and diligent effort. It is not the choice of every company, but once implemented in the right way, it can create superb results.