You have probably heard somebody say something like:
people are our most valuable/most important/greatest asset.
Whenever I hear this, my eyes involuntarily roll around my head, and I have to bite my tongue to prevent it auto-responding:
actions speak louder than words.
Think about it. An asset is as valuable as the money that can be made from it. That is why it is an asset, not a liability. So if people were the business’ greatest asset, the business would be better off with more. Lots more. Businesses would endlessly and relentlessly compete for every joiner, there would be no unemployment and every new recruit would be greeted with an initiation ceremony so splendid that it would rival the coronation of Napoleon Bonaparte. In my experience, new recruits are more often told to sit at the desk of somebody who is on holiday, to keep quiet, to not interfere with anyone else doing their work, and to wait a couple of weeks for their desk phone to be hooked up. No, people are not treated like valuable assets. They are treated like costs to be ruthlessly excised, as pointed out by Tony Poulos in this recent blog.
In an era of data analytics, it should be possible to calculate how much an asset is worth. That is the kind of thing that analytics is good for. “How profitable are customers aged between 25 and 29?”, “what revenues were generated from ADSL lines in the North West of the country?”, “what is the average margin on international calls to Botswana?”. Analytics is supposed to answer questions like those. However, analytics is not used to tell us how much our people are worth, except for the simplest cases like answering how many calls were answered by the contact centre staff. Why not extend analytics further into the realm of human performance? Perhaps it is because we are not sure what our people are for. To know what an asset is worth, you must know how to use it. That way you can tell whether you should make the most of keeping the asset, or whether you should sell it to somebody who can make better use of the asset. This analytical view of staff value is belied by real practice. Staff cuts are usually made using a machete, with an overall target in mind. They are not made using a scalpel, distinguishing the vital organs from the fatty mass. As Tony points out, one common result of downsizing is that some of the vacant positions will soon be refilled because the business realizes it needs them after all. If we knew precisely what each employee was worth, there would be no need for deep and sudden cuts; we would always know exactly who adds value and who is a drain on the business, and hence the net cost-benefit of making any individual redundant. But then, if we knew that, we could calculate the value at c-level at least as well as at any other…