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Marketing speak or

Corporate cliché of recent years.
Fiduciary and Legal
The view that “people are our most important asset” has business. Within this logic people are a simple recurring cost
become something of a corporate cliché in recent years. – pretty much like the electricity bill. This is a useful fiction in
You can find it in any number of websites, in numerous that it makes it very simple to model things like payroll. But
recruitment brochures and, most ubiquitously of all, in the it also makes it difficult to measure and model some of the
chairman’s forward to so many sets of accounts of publicly things that people actually do in a business. For example;
quoted companies. So is this phrase so popular because it that employee who was just about to have an idea that
encapsulates one of the axiomatic truths of doing business saved the business £2M a year – how do you account for
in the modern global economy? Or on the other hand is it her value? That manager who drives away so many good
simply a piece of mindless marketing-speak, doled out when people that the recruitment costs of replacement hiring
the writer cannot think of anything more intelligent to say? come to £90,000 a year – how should his value be
Or, more subtly could this phrase be a clue to unravelling a recorded?
deeper misunderstanding that plagues many businesses,
especially those in the offshore finance sector? There is also a knock-on effect into organisational practices.
Consider a typical process involved in the acquisition
The origins of the phrase lie over 100 years ago in the process for a £50,000 piece of new machine plant or
words of Lord Seiff, who built Marks and Spencer into the hardware. It would typically involve lengthy specification,
grand bulwark of the High Street. He observed that “… planning, ROI analysis, sanction at various executive levels,
ultimately, whatever the form of economic activity, it is installation, testing, user training and a thorough preventative
people that count most”. Harvard professor Chris Argyris maintenance programme. A process that could involve
regards this as an oft espoused and seldom enacted value hundreds of management hours. Compare this with a not
that ranks up alongside other business clichés such as “the untypical recruitment process for a £50,000 per annum
customer is always right”. role, which might involve a brief reading of some CV’s, some
interviews with untrained interviewers, a selection against
The overuse of the phrase has spawned its own backlash of hazy and undefined criteria and an induction process that
critical and indeed cynical reaction. It ranks number one in rarely goes beyond seven hours. To Professor Argyris the
Paul Lafontaine’s “The five most common lies in business.” lesson from this, inferring enacted values from such
Lafontaine links this delusion to HR practice; “When prevalent practices, is that people are a less valuable
management starts talking about how important people are resource than computers or machinery – as less practical
you can bet there is going to be an unpopular human care is taken over the process of managing them.
resources decision coming soon!”
Thomas Stewart has mounted a thorough and damning
On a more serious level the terminology of “asset value” in critique of this mindset. In a discussion entitled “accountants

the phrase is familiar to us in the Finance sector. The can’t count intellectual capital” he writes; “The Chief Financial
implication being that by dressing a statement about valuing Officer can tell you how big the company’s payroll is but
people in financial language it will sound more important, cannot tell you the replacement costs of employee’s skills,

precise and analytical. This is an obvious untruth. Financial much less whether they are appreciating or depreciating.”

accounting conventions and rules are under constant review One would have thought that HR professionals would have

and amendment, but the broad theoretical framework was rushed to join in Stewart’s intellectual campaign, yet few

largely formulated in the coffee houses of the eighteenth have. This may in part be down to his equally strong critique
century. From these times concepts such as ownership of of most contemporary HR practice, whose leaders “…are

capital, corporate personality, limited liability and the unable to describe their contribution to value added except
treatment of assets, liabilities, revenues and costs became in trendy, unquantifiable and wannabe terms” and of whom
firmly established. he says, rather tongue in cheek; “Why not blow it up.”
Carey House Les Banques
S Guernsey GY1 4BZ
These conventions and rules are in essence a fiction, in that So as business leaders we have a challenge, when it comes
they overlay a logical and fairly static framework over a to measuring people and performance in meaningful and
dynamic and chaotic system – but a very useful fiction if all robust ways, but by trotting out platitudes like “our people
parties in the economy adopt a common set of are the most important asset” we do ourselves and our
assumptions. Over time these conventions become the audience the disservice of patronising their intelligence or
accepted “common sense” and define the “rationality” of revealing our own lack of it.
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