Our people are our most valuable resource

A transcript of the CEO’s media statement following any PR disaster almost invariably contains the words “Our people are our most valuable resource”. This phrase has become so pervasive, that it is used to explain away everything from a gross safety breach to fraud, poor customer service or even mass redundancies. But is it true?

It’s hard to believe one organisation’s workforce is so superior to another organisation that it is a true source of competitive advantage. This is especially true if you are in an industry like manufacturing where other factors like your technology or process flow might be a much bigger source of advantage.

Professional service firms full of knowledge workers might argue the people dimension is more important to them. However, even in these industries, the average employee in one big accounting firm looks a lot like the average employee in every other big accounting firm.

Are people actually an organisation’s most valuable resource?

Let’s start by taking it at face value and assume that of all the available resources in the organisation, the people are the most valuable. What does this assumption look like in reality?

Presumably, the organisation treats those resources well, maintains them to ensure they are in good working order and creates an environment where those resources can thrive.

The decision-making process to select people (the most valuable resource) is rigorous, collaborative to ensure they fit in with the other people and draws from the widest possible pool of candidates locally, nationally and internationally.

Once inside the organisation, the person is supported, developed and looked after. No one is permitted to abuse, neglect or mistreat this resource.

It is a treasured asset, cared for and maintained to increase its lifespan, productivity and value. If the organisation experiences any financial hardship or disruption, this asset is quarantined whilst other, less valuable, resources are sold off to save the business.

Now let’s consider the opposite position. What does it look like if people are not the most valuable resource?

The recruitment process is ad hoc, sloppy, biased and “any warm body will do”. The resource is overused, burnt out and allowed to fall into a state of disrepair.

Mistreatment is ignored or even condoned – after all we can always get another one. Should we need to find some quick cost savings, then off-loading this resource is an easy, guilt-free decision.

Of these two descriptions, which best describes how people are valued in your organisation?

Disappointingly, it’s likely the second description of people being mistreated by the organisation that’s the most common. People feeling like a commodity to be exploited does not align with the public statements of being a valuable resource.

Why are people the first to go?

If people are the most valuable resource, why are they one of the first resources to be shed in an economic downturn?

Other fixed assets have the advantage of depreciation schedules that spread their costs over multiple decades, but even with these financial quirks, why aren’t the company’s best assets saved for when the economy improves?

What’s wrong with CEOs saying their people are valuable?

Any CEO who needs to say “Our people are our most valuable resource” has missed the point.

If this were true, they would not need to say it. It would be obvious to every employee through the way they are treated and led.

If this people resource was so valuable, the CEO would not have placed them in a position where they could be injured or corrupted.

Is there another more valuable resource?

An alternative proposition might be that the source of superior performance can be found in the quality of the leadership, not in the people themselves.

If your employees are no better or worse than they are in other organisations, then it is the behaviours of your leaders that is the real asset.

If your leaders can draw just a little extra discretionary effort, productivity or performance from those same workers, then suddenly the chances of your organisation succeeding increase rapidly.

It could be argued the resources of leadership capability and people are the same thing. However, the suggestion here is that just having people of equal quality to your competitors in similar organisations is not enough for them to be your most valuable resource.

Having a technology that is identical to that available in a rival organisation would not elevate it to be your most valuable resource. What’s different about the people is that they can be supported, coached, mentored, guided, developed and managed by leaders displaying a set of behaviours that bring out the best potential of these people.

Of course, people are valuable to the organisation. Equally valuable is the development of leadership behaviours across the organisation that enable each of these people to thrive.