The Corporate Maverick: Your People. There is a group of phrases in the business language that burns my core.
“Our employees are our greatest assets! Our strength lies in our employees! Because those are our greatest and best asset! No asset we have is more valuable than our employees.”
This band of sad phrases represents the biggest pile of poppycock ever invented. Let me tell you why.
An asset is a useful or valuable thing or quality. It is property owned by a person or company, a thing regarded as having value and is available to meet debts, commitments, or legacies. In financial accounting terms, an asset is any resource owned by the business. Specifically, anything tangible or intangible that can be owned or controlled to produce value and that is held to create positive economic benefit.
Simply stated, assets represent the value of ownership that can be converted into cash. Furthermore, assets are depreciated or amortised until they no longer have any value.
In all my experience, employees, otherwise known as people, aka human beings, are not ‘owned’ by corporations. They are not available to meet debts, commitments, or legacies. While many will argue that they are controlled (i.e. managed) to produce results, I submit, all employees have the free will to walk away, leave or quit at any time. I am pretty sure the outright selling of persons for the conversion into cash was outlawed centuries ago. In most countries, the law does not take kindly to people-trafficking of any kind. Lastly, I have yet to meet an older employee who lacks value.
Your employees do not form your asset base. Your employees form your equity base. Your. Equity. Base.
The basic definition of equity is the difference between the value of the assets owned and the value of the liabilities owed. Say your company has assets of $10,200,000, and you have a total debt load of $2 million. All things being equal, your company has an equity value of $8,200,000. That equity arose from the brainpower, sweat power, and person power of all the employees in your organisation.
The Corporate Maverick: Your People. Sure, you the great leader might have had most of the ideas, and you likely steered most of those ideas into existence. BUT it was your team’s brain, sweat and person power that delivered that equity for you. Your team, your employees are equity. Your equity.
Assets can be replaced. Assets are impersonal. Equity needs to be protected. Equity is personal. I will even go so far and say YOUR equity is priceless.
People are human beings. Human beings are social. They are also social creatures in need of protection and in love with all things personal. Between you and I, people are priceless. And deserve to be treated as such.
Making the mental switch from asset to equity is a choice. For great leaders, the switch is natural because the only way to do business is People First, Profits Second.
This is the second part of a three part series about Maverick Leadership in a multi-million-dollar organisation.