5 things your board needs to know about innovation and thought leadership

There are many ways to educate your board about preparing the organization for tough times. Here are five specific areas to focus on regarding innovation and thought leadership.

Innovation is critical despite economic cycles or company performance

Especially in difficult times, the board may look for additional ways to improve profit margins and generally tighten the belt. While corporate departments such as innovation may be easy targets and considered “overhead” for cost cutting, this can be a serious mistake since innovation is a strategic investment in the future of the company. It can also be an essential part of the solution, not the problem, by helping grow revenues and improve profit margins with ongoing tech enablement and automation. Cutting innovation can also have adverse effects on employee satisfaction since many employees join organizations in part for their innovative culture.

To educate your board in advance on these topics, include innovation updates on a suitable cadence, like every other board meeting, and include a full scorecard or dashboard for innovation that details its quarterly contribution toward revenue growth, cost savings, and other key areas such as helping foster a culture of innovation across the organization.  

Innovation needs to be seen as critical regardless of economic cycle or company performance and, when times are hard, it’s time to continue to innovate even more diligently to improve the status quo or even turn things around.  

Thought leadership can generate tangible ROI

In professional services and the technology industry, it’s well known that thought leadership can help brands command a higher premium in the market. The Thinkers360 B2B Thought Leadership Outlook Survey, for example, found that close to half of all respondents saw thought leadership adding over 75% to the brand premium they command in the marketplace.

In other industries, or in smaller organizations, boards may question the value of thought leadership and its ROI simply because it’s a less common practice. They understand marketing, of course, but thought leadership is a lesser known entity and may be viewed with skepticism. To overcome this, be sure to educate your board on the strategic value of thought leadership to your brand, and how it’s an integral part of your marketing strategy.

Instead of just speaking to and sharing non-financial measures, such as metrics related to the marketing funnel, be sure to tie thought leadership directly to the sales funnel as well. You can do this by correlating items such as marquee whitepaper downloads to specific clients and prospects. This will give you a sense of how your thought leadership content is influencing both types of audiences and impacting pending revenue opportunities. This data will give you valuable insights as to how many of your top clients and prospects are reading your thought leadership content and the timing compared to key new deals.  

Innovation and thought leadership: strategic initiatives for the long-haul

The most successful organizations have a programmatic approach to managing innovation and thought leadership, which helps them build organizational competency over time in both disciplines. How it’s structured is less important since it can be centralized, decentralized, or hybrid, but having a defined program with a mission, vision, strategy, and operating plan at a minimum is critical. As an example, the US Navy set a vision for 2030 related to the future of naval information warfare, creating a Hollywood-produced video, which became a north star for the organization, unlocking millions in funding for AI.

The focus and types of innovation and thought leadership you pursue are important, too. In addition to an internal and client-facing focus, have a known set of innovation enablers you plan to pursue such as data and analytics, automation, adaptability, cloud, digital twins and AI, but be open to adding others as needed. The same is true for your editorial calendar for thought leadership and the topics you plan to address. And hear out new thought leadership topics that may come from left field, which could benefit customers. 

In addition, keep the board appraised on your multi-year innovation journey, goals and objectives. If you’re early on, you’ll likely focus on tactical, quick wins to build success and prove the value, and then over time, you’ll focus on more strategic, disruptive efforts. In this way, you’re adjusting your innovation focus from perhaps an 80/20 split on tactical versus strategic innovation, to a 60/40 split, and so on. These are all great conversations to have with the board as part of your multi-year journey.

Innovation parallels your portfolio strategy and governance

Another key item for the board to understand is that the targets of innovation can be directed in multiple avenues: the organization’s business model, its portfolio of client-facing products and services, its internal work processes, and much more.

Set strategic goals such as a certain contribution to revenue growth through new business models; an increase in revenue per FTE; and a certain percentage of cost reduction by way of hyper-automation.

By making it directly relevant to the things the board cares about, you’ll get far more support and interest. Show how the organization is innovating products and services, and metrics like refresh rates that are less than three years old. Also show how AI and analytics are being infused into those products and services, or how they’re being moved from one-offs to annuity revenues. All this takes portfolio innovation, which should be an integral part of portfolio strategy and governance.  

Customers expect innovation and thought leadership without asking for it

One of the common arguments against innovation and thought leadership is if customers don’t ask for it, why focus on or invest in it? The fact is customers expect it from their service providers even if they don’t explicitly ask. In some requests for proposals, you may see innovation called out explicitly and in others not. In either case, it’s important to understand what your customers are looking for in terms of innovation.

This generally breaks down into innovation within the scope of work, and innovation above and beyond. They either want to see innovation in how you deliver your day-to-day services across people, processes, and technology, or in terms of helping them continuously innovate within their own organizations, and bring in new innovations over time. This is especially true for multi-year engagements or contracts where, as a strategic partner, you’ll be expected to stay on top of the latest trends like gen AI, and either bring this into your products and services or educate your client on what’s possible.

On the thought leadership side, customers want to know your company’s not only an expert in your domain, but also that you’re thinking ahead and coming up with new approaches and techniques to solve problems more efficiently. By surveying your customers about innovation and what they’d like to see, you’ll be able to break down and categorize their free-form responses and see exactly where their common needs and interests lie.

Educating your board on innovation and thought leadership emphasizes its strategic nature and areas of contribution, and shows the ROI it can produce for the business regardless of economic cycle. How you define, position, and report it will make all the difference.