Protect your assets!
I hope this picture doesn’t offend anyone, but, apart from appealing to my sense of humour, it serves to make a useful point – that we generally protect our assets! Of course this is appropriate because, by definition, they have a value. Yet somehow there are always assets that are overlooked and inadequately protected.
The most glaring example of this is people in an organisation. It is a cliché for business leaders to say “Our people are our greatest asset” and yet, the fact is, they do not actually regard or treat them as such. It is stating the blindingly obvious to say that no organisation can operate without people, and thus it is self-evident that organisational performance is directly dependent on the performance of its people. By any definition this makes them assets. Yet it is always people who are the first to be jettisoned when the economic climate deteriorates – something that manifestly demonstrates how little management recognises the asset value of their people.
This behaviour, and the attitude that gives rise to it, really bothers me, for several reasons.
- Unless managers have not been doing its job properly, these people were, presumably, all hired because they were needed. Consequently, that being the case, unless the economic change is a permanent one, they are likely be needed again in the future. So redundancy programmes are therefore nothing more than a cost reduction exercise for a limited short term benefit, that take no account of either the past investment in people or the future costs of replacing them. This is something most managers freely recognise but argue that their hands are tied due to market pressures. This runs completely counter to any sense of people being assets.
- Since you cannot have a business without people and every individual plays a part in shaping its performance, it follows that the organisation is a team. Consequently, such behaviour has to disrupt the team. Inevitably this has to have a detrimental effect on personal performance and so exacerbate a decline in organisational performance, in both the short and long term.
- As I argue in my latest book, “A Feeling of Worth”, this is a misuse of resources that has wider economic implications, not least in extending the effects of the downturn.
There are, however, signs that things are changing. The Times recently reported that KPMG is asking its 11,000 British staff to take unpaid leave or face an extensive redundancy programme. The global accountancy firm wrote to all of its employees asking them to volunteer for sabbaticals of between four and twelve weeks on 30 per cent pay or move to a four-day week. The rationale for the proposal, which it referred to as a contingency plan, was designed to help KPMG avoid a company-wide redundancy programme in the future.
This goes some way to addressing my first objection, albeit by avoiding the issue completely rather than adopting the more structured approach of recognising people as assets. It is certainly as step in the right direction, and is definitely a more humanitarian approach in so far as it:
- Removes the likelihood of the permanent pain that would be suffered in job losses.
- Is more democratic and offers people a choice.
Nevertheless it still falls short on my latter concern and completely fails to recognise the organisation as a team. There remains an inherent assumption that a proportion of the people have to make some sort of sacrifice on behalf of the rest. This is as opposed to simply finding an equitable means of applying a universal, temporary pay cut. Of course, this is more difficult to introduce in an environment where management has failed to build a culture that recognises the organisation as a team; something that I would posit is considerably easier in an organisation where people are both valued and treated as assets.
If people are truly an organisation’s greatest asset, they have to be protected, and valuing them as assets is unquestionably the best way to do this