Your People Are Not Your Greatest Asset
Among the overused phrases in contemporary business is the earnest proclamation from so many companies that “Our people are our greatest asset” (Or variations like, “Our PEOPLE are our greatest asset!”). This article will strike people from those companies as heresy, especially coming from an HR guy, but that statement isn’t true. Your people are critical to your success, of course; but they aren’t your most important assets.
An asset is something you own or control that contributes to value creation. By that definition, your people are not assets at all. Unlike people, your assets are not “at will.”
Your car is an asset; but no matter how smart it gets, your car will never tell you it’s now going to be driven by the guy down the street, and that’s true whether you spit-shine it every weekend or chock it up on cinder blocks in your front yard. Now, one can of course argue that in a business context there is no practical difference between the logical realities behind treatment of cars and employees: If you take good care of your car, it will be available to you longer. If you abuse it, it won’t. However, the difference between the relationship between treatment of cars vs. people is that you can’t be as confident that your treatment of a person will in fact increase that person’s tenure. You may pay a person well and give her flexible hours; but if someone offers her a job for a higher salary you’ll either be wishing her well in her new job or renegotiating her salary. You’ll never be put into that position by your best CNC lathe.
You can direct and influence your people; but you don’t own them, and you really can’t “control” them (any more than you can “control” your teenagers). You may want to keep employees forever, but short of a firing, they’re your people until they decide they’re not. That’s a very complex, unasset-like capability.
So employees are not assets after all; but they are critical to maximizing what really are your most important assets.
One of your most important assets is your leadership’s attention. What gets managed is what gets done, and what isn’t being done won’t get done until the leadership focuses on it. It’s hard to get anything meaningful done in most any organization, and even harder to get done the things that really drive value. They only get done when the leadership is absolutely clear on what matters, and they’re working on those things above all else. Your leadership’s attention is your most precious resource, so you can’t afford to fritter it away on tasks that could be delegated to subordinates.
The other asset, which really is your most important, is your reputation. The only thing that attracts and retains your customers, and determines what you can charge them, is the value that they perceive you bring. A reputation is built over a lifetime, lost in a moment, and restored only with pain, if at all. There is seldom an individual in an organization who is truly irreplaceable; but no one considered “irreplaceable” is as indispensably precious to an organization as its good name before for its customers, its employees, and its community.
Does this mean your people don’t matter that much after all? Of course not. For one thing, your reputation is largely out of your hands. No matter your business, you have only two things to offer your customers: what your people know, and how your people behave. And if you aren’t growing your people to accept delegated responsibilities from the leadership, your leadership can’t focus its attention on the things that really matter.
However, for all the caveats around your relationship with your employees, remember that they’re not assets – they’re something much better. Most business assets depreciate in value over time. It’s true that people costs will likely increase over time in compensation and benefits; however, once they’ve been around long enough for you to recoup the costs of recruiting, onboarding, and training them as new hires, people have the potential to deliver value to you that far exceeds their cost. Helping your people create organizational value should be among those critical, constant leadership priorities.
People aren’t assets; but if they were, good treatment and strong leadership would place them among the invaluable few that can actually appreciate.