ETL 27: Malcolm Frank on Why Thought Leadership Needs Thought Leadership

Transcript: Malcolm Frank and Alan Alper

Alan Alper:  You’re an astute observer of knowledge business and their use of thought leadership to drive expertise, pursuit of revenue recognition. How has the thought leadership profession in your eyes evolved and changed over the years?

Malcolm Frank:  I think thought leadership is in need of thought leadership today. What you and the (Buday Thought Leadership Partners) team are doing, I think, is fabulous. We really need a lot more of it. And I got to tell you, I grew up working with and learning from these titans of thought leadership.

When I entered the industry three decades ago, it really blew my mind. For example, when I read Ted Levitt’s Marketing Imagination, and then Michael Porter with the Five Forces Model and Value Chain Analysis. It was as if I was walking through this business landscape and trying to make sense of things. And then these lenses got put on top of it. And all of a sudden, everything made sense. And you could make decisions and understand how firms compete and what steps to take next. When I was in my 20s, I thought this was just a remarkable cheat code. And it was that value of thought leadership really coming to bear. And it wasn’t just them. Obviously BCG (Boston Consulting Group) really made a name for themselves and drove a lot of revenue with their growth share matrix. Geoffrey Moore led marketers in the B2B context with “Crossing the Chasm,” which was really a seminal piece. Michael Hammer with Business Process Reengineering, Clayton Christensen. We could go on and on.

The point is that there was extraordinary value that came from that form of thought leadership. And here’s what’s peculiar. Right now, when you look at what’s happening with AI, it is so transformative. It is the biggest wave we’ve ever seen. Everything is up for grabs. And at an atomic level — how work is delivered, how companies are formed and build value, how you compete, how industries are going to be re-architected and commerce itself is going to be transformed. We need thought leadership today more than ever. And weirdly, we have so little of it.

Why Thought Leadership is Needed in Today’s B2B World

Alan:  When I look at what’s going on, there’s a lot of uncertainty out there. You look at generative AI. I mean, there’s so much news reported on a daily basis. It’s hard to really put your mind around it. A lot of business leaders and technologists that we speak to are still trying to come to grips with its implications. Business is complex. I don’t think there’s any getting around it. I don’t know if people are really spending the time really thinking through these issues; they just seem to be knee-jerk responding. Markets are dynamic; product and service life cycles are compressed. It’s hard to get out ahead of these things. And you mentioned a litany of folks: Christensen, Porter, Hammer, our friend Geoffrey Moore.

You always seem to have your finger on the pulse of the up-and-comers. I mean, you introduced me to people like Pranav Mistry, who was the MIT researcher who developed a breakthrough technology whereby intelligent devices could be controlled with hand gestures. And NYU professor Scott Galloway, who I think just has the most mind-blowing takes on what’s going on in the business-technology space. So, what do you think makes for good or maybe even great thought leadership in this context? You know, looking at it from a B2B lens, of course.

Malcolm: This is just a guess, but part of the reason that we’re not seeing this, it could be how people are educated. If you look at folks who grew up early in a social media context, it’s all about quick bursts. It’s winning the immediate argument as opposed to stepping back and understanding exactly what’s going on and building a thesis and models against that. So, you talk about Scott. He’s a professor. It’s interesting to watch him because he falls in both worlds.

He goes and gets involved in all sorts of Twitter or X battles and is part of that social media mindset. But at the same time, like with his “Algebra of Happiness” and other things, he will take a step back and try to understand what’s going on. But right now, that’s few and far between. And so I think that it could be a function of educational systems, it could be a function of how people build credibility in their markets, but I’ve never seen a greater opportunity for true thought leadership when you consider that the demand for it is so significant, and — on the supply side — if you’re good at it, you’re not going to have a lot of competition these days.

Cutting Through the Din of the Marketplace

Alan: That’s a great point. I know you’re lamenting the lack of good thought leadership and good thought leaders these days. And you’re right, in these uncertain and sometimes fact-free times, thought leadership is more important than ever. If not just for established companies, but for the startups trying to be heard through the din and make an impression in the marketplace. So, do you have any thoughts on how to cut through the BS and to make this happen?

Malcolm:  Well, you said two important things in there that I think are a scourge of our time, fact free and BS. And when you see people put things out that are quote, unquote thought leadership, I think it’s not that thoughtful and you’re really not leading. And actually what you’re doing is you’re just pitching your book. With thought leadership you need to go where the facts lead you. You need to be completely objective. You may find things that are a bit controversial or that you may not like, But you’ve got to be in the truth-telling business and have the discipline to follow a process to get there.

So many people are trying to shortcut that process to score quick wins. And as a result, I think of it as sort of like can of Coke thought leadership, meaning it may taste great initially. And then 15 minutes later, you realize there was no value to that, there was no nutrition in it whatsoever. And so, you know, again, I think we just need to get back to that discipline of building true thought leadership capabilities and assets.

Seeing Patterns and Issues at Scale

Alan: You were on the front lines of this with “Code Halos”, and “When Machines do Everything,” and you really need to do a lot of upfront research. You really need to understand what’s going on. You’ve got to collect hard data, soft data. You’ve got to interview people. So, what is your impression of where things are going wrong today? And what would you recommend? What are the best ways of going about understanding what’s happening so you can really lead and have unique perspectives that will drive awareness, create recognition for your firm, and hopefully build business streams?

Malcolm: The first is, this is not an individual pursuit. It really takes a team to do it. And you have to be on the right platform, either academia or, if you are in a very large tech or professional services firm, it could be consulting. So, these would be McKinsey, Accenture, Capgemini, Infosys, Cognizant. Or sometimes you’ll see it from some of the large software firms. So, there are things that a Microsoft, a Google, an SAP, Oracle or ServiceNow may see that others would not. The point is, is that you can see patterns and issues at scale.

When I was at Cognizant, I remember distinctly just spending time with clients on their particular challenges. I’ll just pick one. It was like 10, 15 years ago when retail banks really needed to get into digital banking.  Instead of somebody going to the branch, they could just do everything off their mobile device. That was new back then. But the point is, every time we met with that client and helped them with that issue, they would say, this is the first time we’re doing it. But then they would look at us and say, you’ve done it 50 times, or 100 times. Tell us what the best practices are, tell us what the worst practices are, what technologies, what methods, how do we do things in sequence, so forth and so on. When you start to see those things at scale, you can recognize the patterns. I think thought leadership, number one, has to come from those organizations, those platforms that have that visibility where they can aggregate all of these issues and then understand exactly what’s going on.

So that’s number one. And then number two, do you have the people, the leadership, the budget, the time, and the culture that really enables that? I think that those are really important ingredients.

The Thought Leadership Value Chain

Alan: You’ve talked about in the past about creating this value chain or supply chain to build your thinking and to go back into the lab and say, this is what we’ve heard. Let’s stress test it. Let’s do some research around this. Let’s then show it to the client. Let’s see what the client has to say. Let’s then make improvements to our thinking. Let’s go out and find best-case examples. And then let’s write something up that will reflect what’s really going on in the world and provide a prescription, a vision for how to go forward.

If you remember our friend, Bruce Rogow, who used to say, “you can’t just sit around and admire the problem,” right?  You got to have a way to solve it and work through it.

Malcolm:  Bruce was a mentor, just an incredible person, one of the greatest intellects in our business. And for folks that don’t know Bruce, he was one of the people that built Gartner and (its) Magic Quadrant. Whether you love him or hate those things, you can thank Bruce. But he still has his fastball. He’s usually the smartest person in the room, but he has this intellectual humility (with what he) calls the Odyssey.

What he does is, he actually goes on a journey. He physically gets on the road and spends lots and lots of time, often half a day, with CIOs to understand what their biggest challenges are, where they’re seeing success, what their frustrations are, and how to help them, and over time the patterns emerge. He has a wonderful model on how to do this properly. But if you abstract it, there is a value chain. And it has very distinctive steps. And if you skip these steps, you’re not going to produce anything of quality. The first may be a thesis — you just stumble across something and go, wow, we’ve seen that five, six times. Maybe there’s something going on. Maybe there’s a change in the market and we need to share this insight. But then you take that thesis … and do the research. And then coming out of the research, you get back to the lab and you start to formulate it.

And then the next step is to market test. And this may be the most important one. I would do this all the time. Strap an airplane to your back, go meet with clients. And what I love about clients, they are the first people to tell you you’re completely full of shit. They’ll say, maybe that works in the ivory tower, but let me explain to you why that’s going to fail inside my organization. Or (what) would really give you a lot of motivation and optimism is when you get the second date.

This means you’d go meet with that client, share a model with them, share your research, and then they would say, “whoa, my boss needs to hear this. I’m gonna schedule a meeting with the CEO and the whole management team or the board of directors.” Then you really know you’re onto something. Then you come back and you tighten it. And if you think of those that have been most successful, you need to reduce the sauce of the model to a sentence or two that could be explained at a cocktail party.

And that’s hard. That really takes a lot of effort, but that’s what the best have done. And then you need to write the darn thing and then market it properly. If you miss any of those steps, you’re simply not going to be successful.

Thought Leadership’s Payoff: Deferred But Substantial

Alan: When you look at this process, it’s not inexpensive to do great thought leadership. You really have to make an investment if you want breakthrough ideas that will resonate and propel the organization forward and help your clients solve their business challenges. How do you convince senior leadership that it’s worth making the investment when ROI, like with many marketing expenditures, is hard to measure. It’s a little squishy. It may take time to really crystallize.

Malcolm: Well, just on the cost piece, there is a direct cost. But there’s also an indirect cost because you’re taking your best people out of the field so they’re not delivering to clients or making rain. They’re working through ideas instead of working on two projects today, (but) it’s going to generate a hundred projects a year out. It’s really pretty simple in my mind.

It’s a perspective on return on investment around marketing, even though (thought leadership) is not a marketing discipline (exclusively). When product marketers come into services firms, they start to do product marketing activities. It’s a really noisy world so it is very hard to distinguish service firms. And you get a one-to-one ratio on that spend. But if you can get thought leadership right, you’re going to get a one-to-20, a one-to-50 ratio. It’s rare when a CEO, CFO, management team understand that. But boy, those that do and support it properly are handsomely rewarded.

Challenges in the Tech Sector

Alan: We did some research last year that focused on thought leadership across a variety of market segments. And what we found was very interesting relative to the tech services space. The tech services executives who answered our survey essentially did not value or appreciate thought leadership as much as their clients did. This wasn’t the experience I had at Cognizant, obviously, but looking around the industry, I can understand it now that I’m taking a more dispassionate view of the quality of what is produced. Why do you think tech services firms struggle with (generating really good) thought leadership?

Malcolm: I think there’s just budgetary pressure. When you’re managing a publicly traded services firm, particularly when it matures, there’s a lot of pressure in the system. You live 90 days at a time. And particularly in sectors that are maturing, how do you create the room to allow this to be built out properly? But let’s take a step back because you said something really important there about the mismatch between what clients desire and what the providers are giving.

Clients right now are confused. I spend a lot of time in the marketplace and I’ve never seen this level of confusion.  It’s like those old films where you have the devil on one shoulder and the angel on the other; that’s what clients are feeling right now. They can build scenarios where it’s going to be this incredible positive future, or others where they may be out of business in a few years. They need help. And instead, these vendors just enter the breach and offer them more HRM (human resource management) or something else. … It’s a bit maddening. Let’s play a game. You and I are sitting in the cheap seats and let’s look at EY, PWC, KPMG, Deloitte. Can you distinguish between them?

Alan:  Not a lot of differentiation.

Malcolm: There’s almost none. And let’s pick another category, Infy, TCS, Wipro. If you really are inside the space, you’ll say, oh, there’s some nuance here around culture or some of the industries that they serve.

Alan:  A lot of sameness in messaging and positioning and the way they articulate what they do, the value prop and whatnot.

Malcolm: It’s amazing. Go to their websites, any of these firms, any of these categories, and just spend 10 minutes on each website. And then an hour later, ask who was whom. You can’t figure out. It’s like those magnetic stickers with words that you put on refrigerators: They all have the same 20 words, and they just recombine them. And there’s really very little distinction in today’s market. Everybody’s competing around the edges.

Remember the power that CSC index had with Champy and Hammer around re-engineering? You couldn’t compete with them in those markets. They had the catbird seat on almost every project. Whenever you got into the C-suite, you were so thrilled to be there, and then you realized they were there three weeks ago setting the agenda. So, when you’ve lived through it, you understand how powerful it is. But it’s peculiar that we’re just not seeing a lot of firms compete properly with thought leadership.

Turning Ideas into Action

Alan: You talked about the models that drove real breakthrough thinking. You mentioned Hammer and Porter and folks of that ilk. We believe strongly that thought leadership can help to inform and shape product and service innovation. You kind of touched on that a little bit in your supply chain/value chain (riff). How do you do this and do it well? You mentioned that you have to listen to customers, you have to pressure test things with your clients, but then sometimes getting the whole organization to get behind it and to start building things is not easy.

For example, “Code Halos” contained wonderful breakthrough thinking, but it was very hard to translate into real product/service innovation that really made a difference with clients. It opened minds, maybe their pocketbooks, but it was unclear if companies were able to really step in and take advantage of it.

Malcolm: Associates want to do great work. They want to have pride of place. Professional services is a tough industry because you are going to work those 18-hour days. You’re going to take those red-eye flights when there’s a runaway project. It can really be difficult at times. But the point is, you want to have pride of place. And in this innovation economy, you want to be in a place that’s really building the future. And that can be very exciting. You may be on your own individual project and don’t see that.

But when you recognize what the firm is doing overall, it can be very, very engaging. And when you talk about “Code Halos,” we had many, many accounts where between the three of us we got pulled into a dozen board meetings, within the first two months. The phone would just ring off the hook. That was such a shot in the arm for the associates who were on that account: They were buried in IT operations, and then all of a sudden, boom, they were talking to the whole board.

We had many cases where CEOs would make the book required reading. They would give their leadership teams a month to read it and then figure out how to implement the ideas inside the company. It’s powerful when you may have been toiling inside that account for years on end, and then, all of a sudden, your firm is thought of in a very different way. Project opportunities and doors are opening that you just thought you couldn’t open. Along with building the firm’s reputation and attracting attention,  it’s actually more valuable in terms of employee engagement.

Where Thought Leadership Belongs in the Organization

Alan: Thinking back over our time at Cognizant, you presided over both strategy and marketing. You handled that very adroitly. But it seems like thought leadership really fits better with strategy. If it reports into marketing, it ends up to some degree just supporting some insipid mottos rather than doing the deep research that reveals your company’s best and brightest thinking and how it solves a client’s thorniest challenges. What’s your thinking on where thought leadership should report so you actually unlock its true value for the organization?

Malcolm: It needs to sit in one of two places. It either sits in strategy, where it could be centralized, or it can sit inside a practice. If you get a large practice at a technology company, it could fit in organizational change management. I think those are the two places it would typically sit. The strategy houses are very good at making this much more organic coming out of the practices.

Think back to the value chain, the first five steps or so: building the thesis, doing your research, formulating the ideas, market testing them, tightening the model. Marketing is counterproductive in that it’s just a different discipline. It’s a different culture with different people. But when you get into how do we write it, what is the right language? There’s always this balance between you can be too inside baseball, too technically focused, as opposed to understanding the mindset of our reader.

Who’s the archetype that we’re going after? How do we distill these ideas properly and communicate them properly? And then, how do you market the darn thing? So those last few steps are a marketing discipline. But the first few are absolutely more strategically focused. Just a final thought on that: Look at what’s been happening with generative AI. Many firms are just falling all over themselves to build leadership in that segment. But boy, it just falls so flat because it’s been marketing-led. There’s a lot of taglines and a lot of sloganeering. And then you get three clicks deep and you’re realize: there’s really not much here.  I think you’re exactly right on where it should reside.

Putting AI on Your Side

Alan:  Let’s transition over to AI. Let’s look at what’s going on thought leadership-wise at TalentGenius. I see that you’re publishing a lot of timely and relevant thinking on your LinkedIn handle and on Medium, and you’re driving readership and creating community through a newsletter that curates the best thinking on AI from a variety of sources. How is that working out and how do you see that evolving over time?

Malcolm: This gets back to what I’ve been looking at for the last 10, 15 years — the nature of work and how it’s being transformed by technology. At Talent Genius, we are trying to empower individuals with AI, putting AI on their side. You look at this wave that’s crashing over knowledge work. You may have seen Elon Musk last week at the Bletchley AI Summit, where he was saying that AI is going to eliminate every job. And I think he had some comments such as, well, if you just want (work) as a pastime, I guess you could keep working, but AI could do that work anyway.

More seriously, Goldman Sachs was outlining the 300 million jobs are going to be severely impacted by AI over the next several years. (TalentGenius is) empowering individuals in the tech industry on what’s exactly happening with their jobs. How is AI going after specific skill sets — eliminating them, enhancing them, or maybe having no impact on them. What tools should they be using and just how do they stay ahead of the game? It’s a platform to help (people to) optimize their careers going forward, because a career is your number one economic asset.

Most people spend more time figuring out what they’re going to binge watch on Netflix as opposed to what are the next three steps in their career. (Our approach) tested incredibly well. We think we’re onto something and we’re going to be releasing it this month. In terms of the thought leadership, it’s helped us immensely because we need to contextualize what this is all about. We’ve had great feedback. People have said we have really given voice to the problem.

We can then outline and understand exactly what people are thinking and feeling and then build a product against that. As a startup, (thought leadership) is all about getting a product market fit.

Will Knowledge Workers Become Obsolete?

Alan:  So how do you balance the tone, tenor and the substance of it all, given the fact that people fear that AI is gonna eat their jobs. You want to be honest with them, but not overly dystopian. You want to provide a song of hope. How do you achieve that?

Malcolm: Again, it’s following the facts. You can read (some thought leadership) and by the second paragraph you see they’re spinning, and they’re trying to make this a song of hope. And it’s too Pollyanna-ish. Or a thread that people always start to pull on is that AI is going to increase our humanity. How? That is somebody who’s trying to spin the case. Or you get the fear porn, where people are saying that it’s going to be a very dystopian thing.

Look, we lived through this 100 years ago. I think there’s a parallel. When industrialization and the assembly line hit American society, there were ice harvesters. That was an enormous industry. In fact, there were over 5,000 ice trucks in New York City alone. In the winter, you’d harvest the ice in lakes in New Hampshire and Maine and put it on boats and take it to major cities for the summer. And then you also look at farming and then you look at (the International Brotherhood of) Teamsters or truckers. When this wave of automation hit, what did it do to those three sectors? It’s interesting. We don’t even know what an ice harvester is anymore because you just bought a refrigerator and you made ice in your kitchen. Boom, gone. Farming is fascinating. One hundred and ten years ago, 40% of all workers in the US worked on a farm. Today it’s 1% because there was enormous improvements in productivity, but the output is pretty much the same.

Now, look at the Teamsters and the need for trucking. When it went from horses to tractor trailers, the productivity went up 50 times, 100 times, but it also created entirely new markets. It created suburbia, it created malls, it created department stores, so forth and so on. The employment in that category absolutely boomed. I think we’re going to live through something similar. You need to be honest with people to say, in today’s context: As a knowledge worker, are you an ice harvester?

Are you a farmer? Or are you a trucker? And, you know, in certain categories, AI is going to create massive demand, and you’re going to have a wonderful 20 years. But then there may be other categories where people would look at each other and say, “Remember when we used to have call centers?” I think you need to be honest with people because that’s where you give them the most value.

Using AI for Writing

Alan:  Here’s a topic that I know hits home for you because so much has been made of generative AI’s ability to create prose that sounds as good or in some cases better than those written by human beings. Is it fair for B2B organizations to use generative AI to craft thought leadership? Given all the issues around hallucinations and fabrications, I think there was a study done a couple of weeks ago that said something like 3% of everything that’s created by OpenAI’s ChatGPT is made up. I think Google BARD fared even worse, around 27%. Can we use these tools to really enhance our creativity, our productivity, our ability to scale thought leadership better — or do we still need governance and checks and balances to make sure that we’re not perpetuating fraud?

Malcolm: I think the answer is yes — judiciously. Generative AI produces prose that reads like it was generated by generative AI. It’s just milquetoast, like listening to pop music. Sometimes I’m in the car and something comes on that doesn’t even feel like music. That’s what happens when you read a lot of this stuff that comes out of generative AI. Let’s go back to our value chain. Recognizing the thesis just comes organically and experientially. Gen AI may actually help in portions of the research process. But then you have to formulate the idea, you need to build the models, you need to market test them.

Let’s just take one that we both know quite well, which is “Crossing the Chasm.” I think it’s pure genius what Geoff created. How in the heck would generative AI understand there is a chasm and that there are buyers on one side of it who are completely different archetypes than those on the other? And AI can’t recognize how adoption and change occur inside very complex organizations that have their own demands and stresses within them.  Could (generative AI) help in terms of finding additional data points on certain topics in a certain well-managed context. Yes.

And to your point about hallucinations, you really need to understand, the data sources that went into that. And the good news is there are tools, which are AI tools on top of the AI, to actually fact-check it. But I think it’s just another productivity tool that can speed up or scale up certain portions of the process, but the process still needs to be governed and managed by people and ideation. That’s going to be just a human-driven endeavor.

Alan:  I heard an interesting story recently, about a tech services company where a client partner wanted to put together some thought leadership for a client meeting and wanted it posted on the website and told the individual who was responsible for thought leadership that it needed to be produced and ready on Monday.

And this was on a Friday. He said he was going to put it together over the weekend. And the person responsible for thought leadership said, “how are you going to do that?” The client partner responded: “Well, I’m going to use ChatGPT to do it, of course.” And the (thought leadership leader) said, “it’s not going to be published without checks and balances. There still needs to be an editorial process for doing this the right way.” So, you really can’t cut corners. I think we’re all going to be heading for a major wake-up call if that’s what people start doing.

Malcolm:  Well, look, I’d love to lose 20 pounds by Monday. It’s not going to happen. You see the motivation: People are trying to take a shortcut, but gosh, that person is going to put their name on it and they’re going to be outed and it’s going to live out there forever. That’s a foolish and dangerous game.

Alan: At least some publications today are noting that they’re using ChatGPT for certain functions in the editorial process to gather facts, to put together financial results stories that are very formulaic. I think ChatGPT can do things like that and do them fairly well and do them faster than people can do that because they can find all the information and put together a standard formulaic presentation fairly quickly. But it’s not a replacement for good creative, constructive thinking, at least not yet.

Malcolm: I mean, I use it all the time. Any journal should be using it. It’d be foolish not to. For example, I’ll write something that may be a paragraph of 200 words, and it’s just a stream of consciousness. I’ll just throw it into ChatGPT or BARD, and say, “act like you’re an editor at a certain magazine, so you get the voice and tighten this up and shorten it by 40%.” And it’s actually pretty good. And then you can go back and say “I really, I wasn’t clear with that.” That was run on and you go back and tighten it up again. That’s a real efficiency gain, so I think people should be using it in that context.

Alan: Right. It could make good thinking maybe better and tighter, more succinct, but it can’t make bad thinking even good.

Malcolm: Exactly.

The Next Big Thing

Alan:  As we wind down, what do you think is next in the thought leadership discipline? And what advice do you have for people who want to pursue this as a real job?

Malcolm: As we were saying earlier, I can’t think of a better time. Clients need this when there’s change. When things are stable, they’re really not that interested. But when there’s change, they need to understand what’s happening elsewhere. They need frameworks to make sense of what’s going on. I think there’s no better time to be in this game. And as I was saying, to be in a field where there’s huge need and not a lot of competition, what a wonderful place to be.

The second bit of advice is that you need to get to the right place. And it has to be one of these large consulting firms, large services firms, or even a large software platform where you can see all of these trends at scale and see exactly how clients are making mistakes or where they’re getting breakthroughs. And then on top of that, you need to work with a senior leadership team that’s deeply supportive of this. And there’s no faking it. Are they devoting the teams (to thought leadership)? Are they creating the budget? And have they developed the culture that really fosters this? Or is it a very salesy culture or very product-oriented? Is it populated by a lot of people with product backgrounds or a lot of people with consulting backgrounds? If you do your homework, you’re going to see that very quickly.

Alan: Malcolm, thank you so much for offering your time and your insights here. It’s been a great conversation as always, and let’s keep the good thought leadership coming.