Leadership with integrity and trust

Gordon Brown has realised that leadership is not only to be displayed at a G20 summit but in all areas of work and life. The current 'ethical' and 'out of touch' issues surrounding the government is clearly a reflection of its leadership and the values that are promoted within the party. It is therefore imperative that those running businesses appreciate the impact that their leadership and ethics have on their organisations AND their customers.

In this business climate it is very easy to negate these values in the race for 'that contract' or 'tweak' an export code to reduce the duties on a piece of equipment. We examine the benefits of having integrity and trust in your leadership ability:

• In uncertain times it is important that clear leadership provides vision and direction.  Obama has established a huge element of trust with the American people.  This must be used effectively to carry out what he said he would do.
• If redundancies are necessary, do your best to soften the blow to those affected staff. Being visible during this time is important to reassure the staff that you care and that 'we will get through this together'.
• Do what you say you will do.  Treat staff the way that you would like to be treated.
• Be open and honest with your customers.  Even though customers do not like to be let down they value suppliers who take responsibility in putting it right rather than those who just walk away.
• Lying catches up with all people.  As one board member said to a Chief Executive, 'If I can lie for you, I can lie to you'.  This is the quickest way to burn bridges in relationships with your colleagues and your customers.

Doing the right thing in difficult times can sometimes be perceived as weakness.  However former business leaders such as Sir Robert Maxwell, Sir Allan Stanford, Jeffrey Skilling of Enron, Sir Fred Goodwin and others too numerous to mention would certainly have reflected on how lack of strength of character and integrity greatly hindered a favourable reputation in history.

Steps to grow profitably

The saying goes 'revenue is vanity, profit is reality'. It is very easy, in this buyer's market, to slash prices to gain business. But many organisations do not adjust their business model to reflect the changing times and therefore it is beholden on directors to take a forensic look at how efficient the business is being run. We take a closer look at the areas that typically can have a dramatic effect on a company's ability to be profitable.

Typical areas to review include:

• Consider reviewing utility bills, stationary, travel and raw material purchasing activities. The simple case of turning off lighting and other power equipment at the end of the day could have a dramatic impact on overall costs.
• Review electricity, gas and water bills. There are alternative suppliers and it is now easier than ever to move or negotiate new prices.
• Telephone, mobile and broadband bills can now be lumped under one supplier. Voice over IP (if you are in a strong broadband city or area) can save tens of thousands of pounds on telephony bills.
• Look at the business processes critically. Can things be done simpler? Focus on simplifying processes that improve customer satisfaction and retention.
• Can you speed up delivery, improve call out times, createf new products, simplify manufacturing etc? All these areas can have a big impact on profitability and reduce waste.

Too many companies during these times look at cutting staff as the ONLY way of reducing overheads. It is worthwhile mobilising staff to consider ways of reducing waste and improving efficiency in the business.  You never know how this simple activity could lead to other business opportunities.

Changing times needs change management

Those companies who are agile and adapt to change will survive in this downturn as well as outperform their competitors. The art of change management ensures that the processes and systems to move the culture and working practices quickly and effetively to line up to customer needs is ever needed during these times. We outline an example of how implementing change at Kodak saved the business from extinction.

For Kodak the success of photographic film and flash or Magic Cubes made it a household name for high quality products.  However the advent of the digital age put a nail in the coffin of a growth market.  Digital cameras and printing quickly left Kodak behind and profits spiralling to losses.  The arrival of Perez from HP in 2003 heralded an opportunity to move the business back to its core markets of cameras and print.  Today Kodak are selling some of the cheapest digital cameras and are to launch a suite of printers which will print photos that last 100 years rather than 15, and ink cartridges that are half the price of current brands.  From this real life example a number of lessons can be learned in changing the culture of the business:

• A clear vision on where the business is going was needed and the execution of a vibrant communication strategy to ensure ALL employees understood the new direction of the business.
• Focus on creating new products (Perez is constantly talking to scientists on latest developments).
• Reskilling the staff to cope with new manufaturing practices (film to digital for example).
• Hiring talent that understood the new customers that they were trying to reach.
• Outsourcing and licensing their old technology to service their existing clients rather than pull out of the market altogether and leave those customers high and dry.