Over the past two weeks I’ve spoken to two groups about business changes happening in the UK and thought I’d share some of the discussion.

As we all know the past few years has been full of stories of greed, corruption and poor business practice. MP’s expenses, Bonuses for failure, phone hacking, payments to officials by journalists and even match-fixing in sport. No wonder some people wonder if the whole world in on the make!

Marketing being reviewed
So it’s come as no surprise to me that many business teams are looking at their marketing and highlighting their ethical and moral values image to customers and to each other. It includes behaviour of staff both inside and outside of work, guarantee of product satisfaction, standards of production, client handling, remuneration and so on.

Extravagant displays of wealth
But how will this translate in the future? I think that extravagant displays of wealth by companies and their employees are a thing of the past in order to avoid this reflecting badly on companies. Gone are the days when bankers will be photographed swilling Krug after their bonus payments. Not because they aren’t buying Krug or getting a bonus but because the Bank doesn’t want such photographed splashed all over the media and causing adverse comment from clients and regulators. Teams are being warned to avoid displays of wealth that may reflect badly on the employer.

Future displays
One wonders how business will display to clients in the future?
Will offices be more spartanly decorated, how much will be spent on flowers and art, whether to have leather or plastic visitors chairs for reception and how will employees dress?

I also suspect that in the future customers will favour businesses that look as if they don’t spend too much on employee comfort. This will be especially true of professional firms such as solicitors and accountants that charge fees and supply a service. On the other hand they won’t want to look as if they are short of money!

Yet I can’t see the customer abandoning their desire for the latest Apple Iphone and even the latest fashion clothing item.

It looks like being an interesting balancing act for business.

“Is there a world leadership crisis?” was the question posed to me yesterday by someone in the group I was speaking to yesterday.

Lack of political leadership
I had been talking about business team leadership and the question opened up a flood of thoughts that I’d had myself about leadership. In the recent past the world seems to have been led by rather uncharismatic political leaders. A few years ago we had great hopes for President Obamah but due to his problems with Congress his light seems to have faded. The European Community seems to have few politicians who understand or even identify with the people they are leading and their handling of the current debt crisis is leaving many exasperated. Popular revolutions replace dictators with “much the same as before”.

Business leadership not much better
But is business also suffering from a leadership crisis?
Bankers, all over the world, are as popular as a bad smell in a confined space, Journalists, in the UK, are viewed by many people as having little or no moral scruples, business leaders of all shades seen as feathering their own nests with undeserved salary increases and bonuses whilst their workers are laid off and have their salaries cut.
Perhaps it’s not surprising that there seems to be a universal lack of leadership.

Influenced by headlines
In reality, however, it’s always easy to become influenced the “Headlines”. In doing so we can ignore the huge numbers of people beavering away and producing small successes that move a business team forward. In the past few weeks I’ve met dozens of small business leaders that are managing to keep their business teams motivated, enthusiastic for the future and actually growing their business results.

That’s not to say there aren’t difficulties. Youth unemployment is a huge problem, the value of retirement annuities a disaster for many and industries laid bare a tragedy. Yet walk up any street and you notice so many business start-ups. Open up any magazine and you can see new and innovative products. Go into millions of businesses and you can find great team leaders.
I wonder if we can persuade some of these leaders to run for government?

Reducing costs is a main focus for all business owners and Director these days. The most obvious cost to tackle are the “people costs” but these also happens to be the most problematical.

The problems
The first problem is that, even in difficult economic times, there’s an inbuilt process in most firms that increases people costs. Once a person is hired increases in pay to keep up with inflation, promotions, increases in employment taxes and so on all add to increased costs. If salaries are frozen or small then there will be increased pressure from staff who claim that they are “Unvalued” and continually justify increased bonuses and promotions. Then there is the hidden future pension costs, often not included in company accounts, but which increase staff cost significantly.

Reducing people costs is an issue that Directors talk to me about almost daily. The problem is that getting rid of staff is often a problem. In some countries it’s almost impossible and even in the UK and the USA the process takes time and substantial management time, which is all cost!

Reducing costs by shedding under-performers
Many Directors and firms find it difficult to reduce staffing levels until forced to do so. Concerns over company morale, culture and team spirit all cause delays in shedding staff. However, the fact is, that often reducing dead wood actually improves the morale of those that remain.

A main flaw
One of the most effective ways to manage staff costs is through a robust performance appraisal system. Yet I’m still surprised at the number of companies that have a poor system of staff appraisal. This is so costly, makes change and restructure difficult. Ideally a good performance review is held every six months, is focussed on targeted results and linked to time-framed development and which actually identifies the best talent as well as the costly talent.

The final stage is to ensure that action is taken to manage the bottom end of the talent pool effectively so that it is continuously pruned.

One has to wonder how likely it is that anger over the financial downturn will spill over into prosecutions of those bankers found to have been negligent, incompetent or having given themselves huge salaries and bonuses despite being aware that their companies were in trouble.

Reports that bankers have taken upwards of $300 million in salaries and bonuses have been greeted with some disbelief by both customers and politicians. Such revelations can’t generate sympathy for any banker hauled before the courts.

However, one has to question whether such a series of court cases might be more of a reflection of “revenge” as opposed to justice?

There is one thing for sure, that is that banks can be expected to be saddled with rafts of restrictive legislation in the future.