Here is a tale of two retailers and a salutary warning to any business leader tempted to rest on past laurels.
A decade ago, Marks & Spencer and Woolworths faced similar predicaments. Both were ubiquitous presences on the high street. Both had lost their relevance to consumers and both were in serious financial trouble.
Fast forward and Marks & Spencer is thriving - it has even reopened the Champs elysees branch it was forced to close during the dark days of the early Noughties. By contrast, Woolworths has ceased to exist.
Why did one prosper and one go bust? The reason is M&S adopted a Thought Leadership approach and Woolworths did not. In 2007, M&S launched a bold, 100-point sustainability strategy, known as Plan A, which helped place this once frumpy brand at the heart of the ethical consumer zeitgeist. Woolworths, meanwhile, failed to innovate and define what it stood for, selling the same pick 'n' mix sweets for ever-diminishing returns.
There is a lot of discussion about who or what a Thought Leader is, as well as the benefits that this status confers, much of which frankly misses the point. Put simply, a Thought Leader is an individual, or business, that changes attitudes and behaviours.
Thought Leadership is a means to an end: a stronger reputation and, as M&S discovered, stronger business performance. That is why TLG has spent the past five years analysing the individual elements that combine to create Thought Leadership, as well as the practical steps needed to become a successful Thought Leader.
There is no silver bullet to a better reputation. There is, however, according to our research, a significant link between businesses that enjoy strong reputations and those regarded as successful Thought Leaders.
In particular, being a Thought Leader leads to higher scores on the crucial metrics that companies measure, such as trust. Thought Leadership can also help a brand transcend national geographies, a phenomenon that TLG is measuring in its ongoing research in the emerging BRIC nations. Our research with opinion formers suggests there are three types of Thought Leader firms: First, the 'category leader'. Think Apple. Second, the 'issues leader'. Think M&S. Third, the 'values leader'.
Think The Co-operative Group.
It is worth dispelling a few myths. First, Thought Leadership status does not inevitably follow from being a market leader. Many do not even feature in the TLG top 20. The omissions include the biggest players in the banking and FMCG sectors.
Second, being a 'challenger brand' does not equate with being a Thought Leader. Opinion formers do not regard brands such as Ryanair or comparethemarket.com as Thought Leaders.
Third: Knowledge capital firms such as management consultants should not assume that they are Thought Leaders just because they publish so-called 'Thought Leadership reports'. Too many of these are built around the repackaging of other people's views rather than genuinely original insights.
In conjunction with a leading business school, TLG has developed a methodology for measuring, evaluating and developing Thought Leadership.
This transforms an abstract concept into a tangible campaign tool to measure and build reputation. We call it the PROACtiv model(TM).
Underpinning the model are five elements critical to Thought Leadership: the Pioneer, challenging established wisdoms; Rigour, developing robust services; Objectivity, delivering benefits for stakeholders; Authenticity, what the business says reflects what the business does; Clarity, communicating clearly the core mission.
As our research among opinion formers shows, successful Thought Leaders can enjoy an enviable status as 'most trusted' and 'most admired' brands. If brands want to enhance their 'trust' rating, they should pursue a Thought Leadership strategy, rather than focusing merely on becoming 'trusted'.
In short, trusted brands can go out of fashion - and business.
Thought Leaders do not go out of business, they become market leaders.