The luxury economy doesn’t rely on just a few investment banks. And even Manhattan has proven fairly resilient to the shocks on Wall Street in the past year.

But the fall of Lehman Brothers Holdings and the inevitable cuts at Merrill Lynch, which has agreed to be bought by Bank of America, could be the big bang that changes the face of the New York luxury economy.

It is too early too see any impact yet. Still, over the coming months the lost jobs and shrinking bonuses in finance are likely to be felt by the army of companies and staffers that serve Wall Streeters: from black-car chauffeurs and Breguet dealers, to pricey restaurants, wine auctioneers, art galleries, household-staffing agencies, Lamborghini salesman, private-jet operators, African safari planners and interior designers. Most importantly, it could effect real-estate–though not immediately.

Here are some expert views on the potential fallout for a few luxury sectors.

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The makers of kid’s movies today seem to understand that parents will be watching these movies with their children.  They have mercifully made these kid’s movies with enough humor that even an adult can appreciate.  Unfortunately for parents they will not have to view these movies just one or even two times, but most likely several thousand times each and every day.  Just how do parents muster the same enthusiasm every time their child pulls out the beloved DVD?

Every parent knows that when a kid becomes entranced by a movie they want to view it every chance they get.  They learn the lines by heart, can sing along with every song, and sometimes quote from the movie in real life situations.  I have personally found myself singing Hakuna Matata while washing dishes.

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Some years ago I accidentally discovered that my new boss hadn’t bothered to fill out the forms to ensure I would receive a small annual bonus. He had been busy and a bonus was not guaranteed, but I had received excellent appraisals from him and had spent much of the previous six months helping him find his feet in his new role.

I was disappointed, but I didn’t make a fuss. It was only when I overheard him mention to a colleague that he had managed to bundle the bonus from his previous job into his new salary that all became clear. It didn’t take much investigative work to discover that the bonus he received had been more than my annual salary. I suddenly — and painfully — realised the extent of the pay gap between us. We were the same age, had similar backgrounds and experience, yet he was taking home three times my salary.

It was the first time that I had experienced discrimination. In truth, I had never believed it existed and I had certainly never looked for it, yet there it was. I felt humiliated and angry. Thereafter I looked at my boss in a completely different light — the knowledge that he was literally valued at three times my pay corroded my relationship with him and my employer. Eventually, I left the company because it became obvious that I was not the only woman who wasn’t being rewarded or being given the career opportunities the men enjoyed.

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What is Lean?

The Roots of Lean Manufacturing Henry Ford developed and used some very specific management tools as he built his Model T factory, a tractor factory or two, airplane factory, component factories and a railroad. The management tools he used eventually turned into what is now known as Lean manufacturing. This evolution occurred after crossing the ocean twice and being interpreted and re-interpreted between languages, cultures, among engineers, accountants, toolmakers and dozens of other specially trained people.

Japanese manufacturers, Toyota in particular, adopted Lean in its manufacturing process and spent several decades refining it while Americans ignored it. By the time it started to come back to the United States, much of what Henry Ford had learned, used and published was forgotten. The methods he had used became somewhat rigid and institutionalized, and in doing so became less adaptable to different manufacturing models.

When Lean manufacturing returned to the United States in the 1980s, many viewed it as a one-size-fits-all tool. That tool happens to have great value in the right environment but is not readily adaptable to others - for example, job shops, custom manufacturers and short-run manufacturers).

The management tools Henry Ford developed can be used to implement true Lean manufacturing in a high-variety, low-volume plant just as readily as in a high-volume, low-variety plant. His tools centered on observation and adaptation. While that might mean setup reduction and ‘kanban’ stocking in one plant, it did not necessarily mean that for all plants or all the time.

Responsibility for Health of Business Henry Ford said, ‘The health of every organization depends on every member - whatever his place - feeling that everything that happens to come to his notice relating to the welfare of the business is his own job.’ That statement represents a critical management tool regardless the size of any organization or the complexity of its product or service.

In most cases, people doing the work are going to know where the inefficiencies and waste are. If they trust management, they will tell managers about them and together workers and management can do something about it. If they do not trust management, then the company - and more importantly, the customers - will continue to pay for that waste.

Trust is a big word in this context. If an organization has an environment where there has been some mistrust for awhile, there are at least two things that management can do to dramatically and quickly increase trust.

Everyone Wants to Do a Good Job First, there is a part of normal human psychology that can be used. Almost everyone wants to do a good job. It is part of how people are wired. Individuals gain a large portion of their identity and self-esteem from their jobs, and other people’s perception of their jobs. Here are three simple ways to help build employee self-esteem: 

1. When an employee has an idea of how to make his job more efficient, listen to them. By just this simple act, a manager can signal to the employee that their ideas are important.

2. Give quick and honest feedback. The employee will then know that the manager did hear and understand the idea. Whether or not the idea is implemented, a manager must make sure the input is recognized.

3. If the idea is implement, or changes are made because of an idea, give all the credit to the employee.

Whether a company’s management is in a high-trust or low-trust relationship with its employees, doing these things will increase their job satisfaction and increase their willingness to share those things ‘that happens to come to his notice relating to the welfare of the business is his own job.’

Knowing What Is Being Measured Second, the company must make sure it is measuring the most important things in its operations, like productivity and quality, and that employees know exactly what is being measuring. If employees understand what is important to the company, they will make those same things important to themselves as well.

Managers should talk to employees about measurements that the workforce can influence. It is a good idea to focus on the local results, even if the workplace is part of a large, multi-location company. Concentrate on productivity and quality reports rather than income statements and balance sheets. Employees will see this as evidence that management is focusing on their jobs rather than management bonuses.

Do the men and women who work for most companies feel that everything that happens to come to their notice relating to the welfare of the business is his or her own job? Most likely, they do. The job of managers is to get the employee to tell them about it and then do something about these things that come to their notice.

True Lean manufacturing needs the involvement of everyone coming into contact with the company’s product and its customer.

I know you almost never have the time nor the resources to do the things ERE writers, including myself, suggest you do. I know that you are thinking that many ERE writers don’t run talent functions, don’t understand the pressures you are under, and have unrealistic expectations. But there are ways to get stuff done, even when the going is tough and the workload high.

I was speaking with the VP of recruiting of a very large organization a few days ago. This person’s company is being acquired and is in a geographical location where recruiting is competitive and the cost of living is high. On top of that, he has over 800 open professional positions with hiring managers pushing hard to fill them. Budgets are tight and the focus is on getting jobs filled. Now that’s real pressure. Read more »

In October I wrote about getting creative with compensation in China, see Get Creative in China!

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