Why tough times have big upside + Using AI trashed Jo’s reputation + Is thought leadership really dead?

Hi

Prime Minister Anthony Albanese addressed the nation last night and said we face some grim times ahead. We are certainly facing a lot of uncertainty.

But there is one all-weather strategy that works in good times and bad: consistent, high-quality thought leadership and communication.

In fact, as we see in this edition, it has huge upside when things get tough.

I hope everyone has a lovely Easter.

Ben

Tough times? Why you should carry on and keep communicating to reap big upside

The Australian economy is in a tricky spot, with the RBA warning that we risk falling into recession and other experts raising the spectre of stagflation.

Meanwhile, the stock market has entered a nasty correction, yet defensive assets like gold and bonds have also been sold off.

The usual response to tough times is to ‘pull one’s horns in’ – to go defensive and focus on the short-term.

But history and research show that firms that have the discipline to stick to their long-term plan and keep communicating can turn downturns into opportunities.

Marketing and advertising researcher Peter Field looked at two types of firms in downturns:

· Slashers cut spending during a recession. But they paid a high price. They lost market share and pricing power, and ultimately that led to lower profits. The damage wasn’t just short-term. It generally took five years for slashers to recover to pre-recession levels.

 · By contrast, spenders spent more during a recession. Yes, that spending hit their short-term profitability. But when the economy bounced back, these companies gained higher market share, better pricing power, greater market penetration … and recorded a big uplift in profit.

Other experts and research support Field’s findings. And B2B firms that grow spend during downturns also win big.

Obviously, some companies in financial trouble are forced to cut spending to survive a downturn, but for most, recessions and market corrections are an opportunity.

I have found this to be true for many of my clients, particularly asset managers. When they enter a bear market or period of underperformance, my clients don’t go quiet. They keep communicating with disciplined messaging. That allows them to maintain, and even build, trust with investors and retain them during the difficult period.

When markets recover, the asset manager bounces back from a much higher base than if they had stopped communicating. Their surge back is therefore extremely powerful.

As Jo found out, using AI now carries serious reputational risks

Jo Tarnawsky recently had her reputation and credibility shredded for using AI.

Jo is a former diplomat and Chief of Staff to Deputy Prime Minister, Richard Marles, and now a leadership coach, author and speaker.

She has been using thought leadership to proactively promote her practice. That included penning a series of articles on ‘power’ for online publication Crikey.

But then AI researcher Toby Walsh spotted Jo’s articles and ran one through an AI checking tool, GPTZero. He found they had been penned with the help of AI, and Walsh outed Tarnawsky on LinkedIn, an outing subsequently picked up by MediaWatch.

Tarnawsky says that any suggestion the article was AI-generated is just “plain wrong”. She says she used AI to check facts, proofread copy and refine word choice.

But Crikey, which has a zero-tolerance policy with regard to AI use, pulled the pieces. And Tarnawsky has arguably (and perhaps unfairly) taken a very public and very big hit to her credibility.

Jo’s plight highlights that AI use for external communication, content and thought leadership is now a significant risk to reputation and credibility that needs to be managed carefully.

When readers suspect AI use, their trust in that content crashes 50%. (Journalists have been suspended and books pulled from publishing because of issues around AI use.)

I understand we are still in the early days, but to protect credibility, when it comes to using AI, I suggest a few do’s and don’ts for external communication and thought leadership:

Don’ts

· Don’t use AI to write public content and thought leadership.

· Don’t use AI to rewrite whole sentences and paragraphs (Even if you use Grammarly, accepting its changes to whole sentences appears as AI use in AI screeners.)

· Don’t assume you are in the efficiency game, when you are in the insights, creativity and judgment game (most knowledge workers).

· Don’t pitch AI-written op-eds and media releases to serious journalists and editors.

· Don’t assume AI can replace your marketing and communications team!

 Do’s

· Do have an AI policy for external communications and thought leadership that is widely distributed internally.

· Do train talent in the appropriate use of AI.

· Do use AI as a ‘souped-up Google’ for background research and brainstorming (though doing your own Google research still generally allows you to go deeper)'.

· Do use AI to check for basic typos.

***

In a similar vein, a recruiter recently advertised a job. He received many applications. In an email, he let everyone know their application had been received and outlined the rest of the recruitment process.

A huge number, some 80% I believe, then responded to him with exactly the same email.

Presumably, they had all typed into AI: “How do I respond to an email from a recruiter confirming they had received my application?”

Instantly, a huge swathe of the applicants had shredded their credibility and lost an opportunity to connect with the recruiter.

No, thought leadership is not dead

A new article in the Harvard Business Review asks whether AI has killed thought leadership.

Entrepreneur and Harvard Business School executive Jon Winsor says that AI has created an “endless stream of polished, confident and frequently hollow insight”. “We are drowning in it,” he says.

Winsor’s solution is to shift from ‘thought leadership’ to ‘thought doership’.

But as I’ve pointed out before, good thought leadership has always been deep intellectual work with strong practical implications. It has never been just about content.

As mentioned, I work a lot with investment firms. Thought leadership enhances their investing. It provides an impetus and structure to do high-quality, deep research that leads to better investment outcomes. The work, when made public, then helps build profile and credibility.

Good thought leadership has always delivered practical outcomes.

One of the most famous examples is the Boston Box (Growth-Share matrix), popularised by Boston Consulting founder Bruce Henderson in the 1970s.

The Box elegantly divided a business into four quadrants based on two factors: market share and market growth. A ‘cash cow’, for example, has high market share, but low growth; a ‘star’ business has high market share and high growth.

It was pure thought leadership. But the Box led to practical actions: milk ‘cash cows’ for cash … invest heavily in ‘stars’ to fully exploit their potential, etc.

The thinking guided the action.

(British investor and the founder of L.E.K Consulting, Richard Koch, has become a billionaire by simply focusing on the star quadrant.)

AI has spawned a surge in content. It hasn’t spawned a surge in thought leadership, true thought leadership.

Rather than dying, as AI floods the internet with content, high-quality thought leadership will be more important and more valuable than ever.