Written by Mike Harris, Managing Director at Strategus Consulting
Introduction
Hello to all you Leaders In Strategy! I’m Mike Harris and welcome back to the latest episode of my blog, where I challenge the widely held belief that employees are a company’s most valuable asset. This idea, popularised by former Xerox CEO Anne Mulcahy, is often repeated but rarely truly lived out. While I wholeheartedly agrees with the sentiment behind valuing your people, the phrase itself is problematic.
Everything that I look at, I look at through the lens of leadership, and remember I’m talking here about business leadership.
Are Your Employees Really Your Greatest Asset? I Challenge the Conventional Wisdom
I often hear people use the phrase ‘our employees are our greatest asset’. So where does this common business sentiment come from? Well, it was first used in 2004 by Anne Mohay, a former chairperson and CEO of Xerox, who said this in a speech.
“Employees are a company’s grace in 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”.
Who can argue with that? Well guess what? I do,and the reason for that is because people have focused in on that first sentence. Employees are a company’s greatest asset and have 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.
1. It’s a Cliché, Not a Reality.
I don’t actually believe people, when they tell me that. It’s not because I think they’re lying, but because I think it’s become a cliche and people are saying it without genuinely believing it. Certainly, if you look at the actions that they take within their businesses, they’re not really treating their employees as if their greatest asset, because if they did, they would be doing the right things to show that they truly value their employees above everything else.
2. High Performers, Not All Employees.
Even when people do genuinely believe that people are their greatest asset, in most organizations, it is not actually the case. Yes, there will be some high performers who are the business’s 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.
Most importantly, there will be actual members of the team who are not doing a good job that are underperforming. In this sense, they’re far from being their greatest asset. Potentially, they’re actually a liability as a result.
I find this phrase misleading, and potentially dangerous. If you believe all your staff are your greatest asset, then you are becoming 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.
3. Ignoring Other Crucial Assets.
It seems to become unacceptable to say that something else is actually a gracious asset. 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 centre, and it’s the location.
That’s not to say their people aren’t really important, and it’s not to say that their 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. 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.
4. People are not assets!
I just don’t agree with thinking of people as assets. Now, I accept I might be overthinking this, but in a business sense, an asset is an accounting term that means: ‘A resource controlled by the company from which future economic benefits will flow’.
Firstly, obviously 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 their employees as just another asset. It commoditises them. It makes them just a number on a balance sheet. Potentially it makes them disposable, they can be written off, disposed of by the business without a second thought.
If you start to think of people as an asset, then you can also start to think of them as a liability. But people are not assets or liabilities. 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 sit above that and they’re to be valued.
In summary
Whilst I agree with the sentiment of Ann Mohay’s initial statement that was to get businesses to understand the importance of people, I think the actual message has got lost. I don’t agree with the conclusion that employees are a company’s greatest asset.
And the reasons for this are as follows.
1. It’s a Cliché, Not a Reality: Many leaders pay lip service to this idea, but their actions often contradict their words. The statement becomes a hollow platitude rather than a genuine reflection of company values and practices.
2. High Performers, Not All Employees: Focusing on all employees as the greatest asset is misleading. The true value lies in identifying and nurturing high-performing individuals who significantly contribute to the company’s success. Attributing equal value to all employees ignores the varying levels of contribution and performance.
3. Ignoring Other Crucial Assets: The statement overlooks other vital assets that contribute significantly to a company’s success, such as brand reputation, intellectual property, cutting-edge technology, and strategic location. Focusing solely on employees as the greatest asset diminishes the importance of these other key factors
4. People are not assets: I take issue with the very concept of referring to people as “assets.” People are not commodities to be owned or controlled. people are far more valuable than mere assets; they deserve to be valued, respected, and empowered, not managed or controlled.
Please let me know your thoughts on this blog. Do you agree with me or do you believe your employees are your greatest asset?
I’m 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. Or you can email me directly on the company email address.
Thank you for joining us today. Hopefully you enjoyed it and you’ll return next time for another blog where I’ll looking at the importance of leadership and strategy. I’ll see you then.
About the author
Mike Harris is an experienced business leader and founder & lead consultant at Strategus Consulting. With 40 years of experience, Mike offers a unique opportunity for readers to learn and grow as strategic leaders. He is also the host of the Leaders In Strategy Podcast, which can be found on Podbean, Spotify, Amazon Music, Apple Podcast and YouTube.
The Leaders In Strategy Blog is brought to you by Strategus Consulting, a management consultancy that works with organizations and individuals to achieve their ambitions by focusing on their strategic plans and providing leadership, guidance & support.