The path from commoditization to thought leadership.
“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
– Peter Drucker
During a thought leadership marketing panel that I was on this week, we discussed the question of whether or not there can be multiple thought leaders in an industry, even highly competitive ones. My answer is “of course, there can be multiple thought leaders in an industry.” How so? Well, it works like this.
The answer to the question “how can I be a thought leader in my industry” is three-fold path of differentiation, segmentation and innovation. I know, simple…but if it’s so simple, why don’t we all do it and why did 100 people show up to learn about it? Read on…Image may be NSFW.
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Differentiation – This is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors’ products as well as a firm’s own product offerings. According to the first accounting of differentiation in the 1933 paper by Edward Chamberlin entitled Theory of Monopolistic Competition – “Any producer whose product is significantly different from the products of others has some monopoly of it, subject to the competition of substitutes.” Think about that…a monopoly on it! Differentiation gets you…a small monopoly and a window of opportunity for leadership!
Segmentation – Target markets are huge. Thought leaders choose smaller segments in which to ply their trade. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention.
Innovation – There are few more overused words that innovation (well, perhaps thought leadership comes close). According to Wikipedia, Innovation is a change in the thought process for doing something, or the useful application of new inventions or discoveries. If you subscribe to Drucker’s philosophy on business value – in that it is derived from innovation and marketing – then innovation is the final and most important hallmark of the thought leader.
Q&A | QUESTIONS & ACTIONS
Take out a sheet of paper and think about your differentiation, segmentation and current policy on innovation and what you’re doing TODAY to move the ball forward on all three.
Think about it this way: Real innovation can be just a small change! Take 10% of what you’re doing and do it better/different and publish your point of view! You’re on your way, at least in part, to being an industry thought leader