Why People Are Not Your Greatest Asset

In many ways I don't actually believe people when they tell me that. It's not because I think they're lying, but it's because I think it's become a cliche and people are saying it without genuinely believing it. And certainly if you look at the actions that they take within their businesses, they're not really treating their employees as if they're greater cesset. Because if they did, they would be doing the right things to show that they truly value their employees above everything else. I'm Mike Harris and I help businesses to successfully grow their profit and turnover. In the last year alone I have helped over 20 companies at least doubling size. And I work with a mixture of firms for small, medium and large businesses including startups and multi-machines. So I often hear leaders say that they're people are the greatest asset. In fact a potential customer said it to me with real pride just the other day. But every time I hear it it makes me cringe because I don't actually believe it's the case. So I thought today let's explore why. So back to the topic in hand. As I said earlier, I often hear people use the phrase "employees are our greatest asset". So where does this common business sentiment come from? Well apparently it was first used in 2004 but Anne Mulhey who was a former chairperson and CEO of Xerox. And this is what she said in a speech. Employees are a company's greatest asset. They're your competitive advantage. You want to attract and retain the best. Provide them with encouragement, stimulus and make them feel that they're an integral part of the company's mission. And who can argue with that? Well actually guess what? I do. And the reason that I argue with that is because people have focused in on that first sentence. And I've forgotten all the other things that underpin why she said that. So let's explore why I don't believe that employees are a company's greatest asset. Firstly, and let's just assume from moment that we're happy to use the term asset when it comes to people. And we're going to return back to that a bit later. It's not because I think they're lying, but it's because I think it's become a cliche. And people are saying it without genuinely believing it. And certainly if you look at the actions that they take within their businesses, they're not really treating their employees as if they're greatest asset. I'm a great fan of the Dilbert cartoons. I don't know if you've seen them. They're definitely worth googling and have a look at. And there was what was for the other day, which was part of the thing that prompted me to do this podcast. And in the cartoon, you got the manager saying, I've been saying for years that employees are our most valuable asset. But it turns out that I was wrong. Money, I am most valued by asset. Employees are actually ninth. And one of the members of staff says, I'm afraid to ask this, but what came in eighth? And he says, photocopy paper. And I think that actually kind of sums up the real attitude. People say it, but do they really, really believe it and do they implement that within their businesses? And then the second reason that I don't like the phrase is because that even when people do genuinely believe that people are their greatest asset, in most organizations, it is not actually the case. Yes, true, there will be some high performers who are the businesses greatest asset. But most employees, even those who do a good job and who work hard, are not right at the top of the list. And most importantly, there will be actual members of the team who are not doing a good job that are underperforming. And in this sense, they're far from being their greatest asset. Potentially, they're actually a liability. As a result, I find this phrase is not only misleading, but potentially dangerous. Because if you believe all your staff are your greatest asset, then you are being coming complacent. And you will not deal with performance issues when they're needed. And you will not be rewarding those who deserve it most over and above everybody else. And then the third reason is because it seems to become unacceptable to say that something else is actually a greatest asset. And with lots of businesses, it's not people. And maybe it never will be. It's other things such as their brand, their intellectual property right or a patent they hold, or it's their technology, or maybe if you're a shop in a shopping center, it's their location. That's not to say that people aren't really important. And it's not to say that the people aren't contributing to some of the things I've just mentioned. But at the end of the day, the top asset for that business is not their people. And when that's the case, the business needs to know that so that they know what their competitive advantage is. If everybody believes it's their people, then they can be missing a trick. And then lastly, and most importantly, I alluded to this earlier, I just don't agree with thinking of people as assets. Now I accept I might be over thinking this, but in a business sense, an asset is an accounting term. And this is what it means. A resource controlled by the company from which future economic benefits will flow. So firstly, obviously our people are not controlled by companies. If it's anything, it's the other way around. But my problem with the phrase goes even deeper than that. I don't think business leaders should think of or treat people as just another asset. It commoditizes them. It makes them just a number on a balance sheet. Potentially it makes them disposable. I mean, they can be written off, disposed off and buy the business without a second thought. And if you start to think of people as an asset, then you can also start to think of them as a liability. As an aside, it's the same reason I don't like the phrase human resources, which implies employees are merely a resource to be managed. But people are not assets or liabilities or resources. People are people with feelings, unique needs and values. So no, I don't think people are an organization's greatest asset. And it's because I think they're much more important than that. Assets are there to be managed. Assets are there to be controlled. People are to sit above that and there to be valued. So there you have it. Hopefully that all makes sense. So in summary, whilst I agree with the sentiment of M. Mahayi's initial statement that was to get businesses to understand the importance of people, I think the actual message has got lost and I don't agree with the conclusion that employees or companies greatest asset. And the reasons for this are as follows. One, a lot of business leaders may say it, but they don't really mean it and their actions say the opposite. Two, it's just misleading. Not all employees are a great asset. Some are average and some are actually liabilities. Three, there are occasions when other assets are actually more important to a business than their people. But that's all right. That's how it should be. Last but not least, the reason I disagree is that people are not assets. Because if you're not careful, that thought process just turns people into numbers on a banan sheet. Nor are they liabilities or resources. They are people and there's such. They are much more important than any asset. As you know, I like to set some homework and today's homework is this. Are you one of the many leaders who say that people are your greatest asset? And if you do and you probably are, firstly, do you agree with what I've said? Should you be changing your thinking? Should you be looking at this differently? And even if you still believe that the phrase is correct, have a look within your business to see if you underscore that philosophy. In other words, are there things that you're doing within the business really supporting the notion that people are your greatest asset? So by means of follow up, please let me have any comments or questions you have on this episode. Really interested to hear what you have to say. You can message me directly on LinkedIn, which I love receiving your comments there and having great dialogue with you guys. Also, you can email me directly on the company email address. And don't forget to like, subscribe, click on that bell icon if you're watching this on YouTube. And also share with colleagues that may be eager to develop their leadership skills. It's a quick reminder of where you can find us. You can watch us on the leaders and strategy YouTube channel. Listen to us on podbeans, Spotify, Apple podcasts, Amazon Music and podchesa. You will see the new episodes uploaded on both LinkedIn and our website. Or you can read the blogs that we're also now publishing. Thank you for joining us today. Hopefully you enjoyed it and you'll return next time for another episode. What will be joined by another special guest will be looking at the importance of leadership and strategy. I'll see you then.