Journal of Business Administration and Education

ISSN 2201-2958
Volume 6, Number 2, 2014, 57-65

The Relationship between Thought Leadership and Innovation: A Look at

Strategy
Hanan Alhaddi
Lawrence Technological University, Southfield, MI, USA

Abstract. Strategy is the creation of a unique and valuable position that involves making tradeoffs
and executing activities differently than rivals. As a primarily organizational challenge, the
development and reestablishing of strategies is a leadership function. This creates an inseparable
connection between strategy and leadership. In its traditional form, leadership style can vary from
charismatic to altruistic and transformational. Different leadership styles are more effective than
others based on the strategic space. Innovation (the creation of new ideas), in particular, mandates
an additional form of leadership: Thought Leadership; the championing of new ideas. A critical
element to the success of the organization, innovation is becoming a strategic priority and core value
to companies.

Based on the power of ideas to transform our way of thinking, a strong tie is

established between innovation and thought leadership. Therefore, the duo becomes a differentiator
that enables organizations to achieve their strategic position in a competitive environment. In light
of that, this paper suggests the importance of thought leadership in developing strategies geared
toward innovation. Therefore, this work addresses leaders and strategic managers of reasoning to
ensure the presence of thought leadership capacity if they are to succeed in developing effective
strategies for innovation.
Keywords: Thought leadership, innovation, strategy, differentiation strategy, leadership.

Copyright 2014 the authors.

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Introduction
Strategy is the creation of a unique and valuable position that involves
making tradeoffs and executing activities differently than rivals. As a primarily
organizational challenge, the development and reestablishing of strategies is a
leadership function. This creates an inseparable connection between strategy and
leadership. In its traditional form, leadership style can vary from charismatic to
altruistic and transformational. Different leadership styles are more effective than
others based on the strategic space. Innovation (the creation of new ideas), in
particular, mandates an additional form of leadership: Thought Leadership; the
championing of new ideas. A critical element to the success of the organization,
innovation is becoming a strategic priority and core value to companies. Based on
the power of ideas to transform our way of thinking, a strong tie is established
between innovation and thought leadership.

Therefore, the duo becomes a

differentiator that enables organizations to achieve their strategic position in a

competitive environment. In light of that, this paper suggests the importance of
thought leadership in developing strategies geared toward innovation. Therefore,
this work addresses leaders and strategic managers of reasoning to ensure the
presence of thought leadership capacity if they are to succeed in developing effective
strategies for innovation.
Thought Leadership
Defined as a radical departure from traditional leadership, thought
leadership is the championing of new ideas rather than anything to do with
managing people or helping a group achieve a goal., (McCrimmon, 2005, p. 1064).
Thought leaders inspire leadership; they ignite imaginations, explode old myths,
and illuminate paths to the future that others can follow (Butler, 2012, p. 1). It is
very important to draw a distinction between thought leadership and traditional
leadership. The latter mandates authority over others and can vary in style
including charismatic, altruistic, transformational, and commanding. Some form of
traditional leadership is indispensable regardless to the organizational structure.
On the other hand, thought leadership does not require management of other people

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and is particularly vital where innovation is essential to the success of the

organization (McCrimmon, 2005). Therefore, thought leadership should be an
integral part of an organizational structure that is focused on innovation.
McCrimmon (2005) outlined key characteristics of thought leadership. In his
work, thought leadership is the promotion of new ideas; an initiative rather than a
position or role. Thought leadership qualities can be exhibited by non-managerial
employees with revolutionary mindsets and the capability of championing new
ideas. Moreover, thought leadership is egalitarian, ephemeral, non-hierarchical,
and is not easily monopolized. Unlike traditional leadership that needs to exist for
the life of the organization, thought leadership starts with the spark of a new idea
and ends with the implementation readiness for the idea. A thought leader
continues to champion other news ideas until the implementation phase.
Innovation
Core competences are important for the performance and success of the
organization (Goddard, 1997; Duysters & Hagedoorn, 2000). Despite the variation
in competences based on the organizational structure, innovation is a one core
competence that every organization needs (Drucker, 1995).

A learned behavior

(Dyer, Gregersen, & Clayton, 2011), innovation is among the metrics used to reflect
the growth prospects of a company (Eccles, 1991). In a broad sense, innovation is
an organizations inner capability and is not limited to product or technology. The
pursuit of innovation optimizes the new value proposition which could be in the
form of a new process, product, or the way of doing business (Dervitsiotis, 2010). In
many situations, innovation has been applied to a wide span of disciplines including
service, design, process, approach, methodology, or offering.
In its simple form, a global organization defines innovation as the creative
thinking and development of new ideas, technologies, and processes that are
explored to create differentiated products (Alhaddi, 2013).

Extensive literature

shows significant research on innovation from definition to intertwinement with

leadership and strategy (Battistella, Biotto, & Toni, 2012; Stowe & Grider, 2014;
Chalhoub, 2010; Innovation & Leadership, 2008). The consensus in the literature

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supports that innovation as an essential management practice is considered a

driver for growth and has a positive impact on the performance of the organization.
Therefore, organizations are starting to recognize that in order to succeed in a
global competitive environment, innovation is required (Chalhoub, 2010).

This

explains the elevation of innovation as a top priority for executive leadership

(Innovation & Leadership, 2008). Crossing innovation into the strategy domain has
a significant potential, particularly in a complex and competitive environment.
Hence, as innovation evolves into a core value, organizations are integrating it into
their strategic planning by setting it as a strategic priority that ensures long-term
success (Alhaddi, 2013).
Innovation and Thought Leadership: a Duo
Research revealed that thought leadership is intertwined with innovation
(Butler, 2012; McGrimmon, 2005). Although similar, the two are not the same.
Thought leadership is based on innovation. In simple terms, innovation creates the
new idea and thought leadership champions it until it is ready for implementation.
The Innovation and Thought Leadership Diagram illustrates the connection
between the two outlining the essence of new ideas as the basis for both, see
Figure 1.
Figure 1. Innovation and Thought Leadership Diagram

Figure 1 above, illustrates the common element between innovation and

thought leadership, which is the new idea. While innovators are creative thinkers
with the ability to create new ideas, thought leaders are early adopters of these

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ideas. They possess influential skills that enable them to inspire and persuade the
organization to implement such ideas. Once the new idea is accepted, traditional
leadership takes over to ensure successful implementation of the new project
(formerly, an idea) through project and operations management practices. This is
illustrated by the New Idea Process Diagram shown in Figure 2 below.
Figure 2. New Idea Process Diagram

As shown in Figure 2 above, the cycle is initiated with an innovator that

creates a new idea for a product, service, or process. Next, a thought leader adopts
the idea and champions it until it is accepted by the organization. Once accepted,
the implementation phase starts, which is overseen by traditional leadership that
ensures proper execution through effective allocation of organizational resources
including project managers and operations managers in addition to the other
functions.
Drawing from literature, innovation and thought leadership are inseparable.
For example, a recent study by Alhaddi (2013) showed a strong connection between
thought leadership and innovation. In a global organization (Johnson Controls,

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unit of analysis), innovation was set as a strategic priority to ensure long-term

success of the organization.

Analysis showed that the organization drives

innovation through thought leadership; a connection that differentiates it from

rivals and enables it to achieve its strategic position. Johnson Controls defined the
term thought leader as an innovator with the ability to anticipate needs and
proactively design and provide solutions. Providing thought leadership is a critical
concept for the global organization and spans multiple spaces in its operations.
Additionally, Chalhoub (2010) showed that the relationship between
innovation and thought leadership is a cultural requirement in a global and
competitive environment. In his theoretical framework for innovation drivers,
several

dimensions

including

thought

leadership,

entrepreneurial

culture,

participative management style, performance evaluation criteria, and compensation

mechanism drive innovation, which in turn influences the organizational
performance. Although there is no evidence of significant research on integrating
thought leadership into strategy, scholars have extended research on innovation in
the strategy literature. For example, Stowe and Grider (2014) presented strategies
for advancing organizational innovation.

Their work discussed structural

innovation (the organizational capacity to be innovative) and suggested that

organizations should integrate innovation into the organizational strategies in order
to cultivate a culture of creativity.

Other research suggested that in order to

establish a foundation of innovative culture, strategies should be developed to

embed innovation into the organizational structure (Innovation & Leadership, 2008).
Practical Implementations for Organizations
Drawing from the literature and building on recent research, this paper
suggests a set

of recommendations for

practical

implementation

at the

organizational level. Addressing executive leaders and strategic managers, this set
of recommendations encourages the integration of thought leadership into
innovation strategies.
Foster a culture of innovation throughout the entire organization. As
innovation is a learned behavior, executive leaders are encouraged to create an

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organizational culture that cultivates innovation and creative thinking throughout

the organization. This can be done by increasing the employees awareness of how
critical innovation is to the success of the organization.

Understanding that

innovation is not limited to the R&D function, employees will be inspired to think
creatively turning the entire workforce into an innovative engine. Additionally,
executive leaders are encouraged to promote the generation of new ideas through
employee recognition, award systems, and compensation incentives.
Develop strategies to integrate innovation and thought leadership into the
business model. As the benefits of innovation and thought leadership continue to
unfold, particularly in a global competitive environment, strategists are advised to
deepen the incorporation of innovation and thought leadership into the business
model of the organization. Practitioners in strategic planning, communications, and
human resources should develop strategies to use innovation (driven by thought
leadership) as a source of competitive advantage. For example, as an innovation
strategy, include novelty and originality of ideas in the decision making process of
funding new investments.
Use innovation and thought leadership as a differentiation strategy.
Extensive literature shows positive relationship between differentiation and
organization performance. Differentiation allows the organization to gain enduring
advantages that enable it to improve its performance overtime (Razak & Llias, 2011;
Heikkurinen, 2010; Tripathy, 2006).

Building on findings from the literature,

leaders and strategists are advised to use the innovation-thought leadership duo as
a differentiation strategy.

Strategies can be developed to target specific talent,

customers, and other stakeholders. Marketing campaigns can also be done to

promote innovation and thought leadership as a source of differentiation that
enables the organization to set itself apart from rivals. This becomes particularly
important in a global and competitive environment.
Summary

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This paper discussed the importance of thought leadership in developing

innovation strategies. Based on the power of new ideas, innovators creatively think
and thought leaders passionately champion. Therefore, the duo is inseparable,
particularly in a global environment characterizes by competitiveness.

The

Innovation and Thought Leadership Diagram was developed to illustrate the duo
relationship. The New Idea Process Diagram was developed to briefly show the
process of new ideas from creation to implementation and the role of innovation and
thought leadership. Both diagrams benefit leaders and strategists in understanding
the dynamic between innovation and thought leadership. This understanding is
intended to inspire practitioners with the global mindset to integrate thought
leadership when developing innovation strategies and to use the innovation-thought
leadership duo as a source for differentiation.

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