Don't call us `assets'
Sunday 12 September 1999
Or rather the conference was concerned with managing all this knowledge. And there lies the problem. This emphasis - inevitable, given the obsession of business with measurement and process - has led to the concept of intellectual capital and hence to the almost de rigueur chief executive's insistence that "our employees are our greatest asset".
Forget for a moment that many companies pay little more than lip service to the idea. What this is all about is conjuring up some kind of explanation for the fact that Microsoft and all those other hi-tech stocks have such huge market capitalisations and so little in the way of traditional assets.
Just as accountants invented "goodwill" as a catch all to explain why companies seeking to acquire businesses laden with brands had to pay so much more than the plant and machinery were worth, so management consultants have developed "intellectual capital" as a method of understanding the value of all that knowledge, expertise and intellectual property.
But as Thomas Davenport, a consultant himself, points out in a book published last week, this argument goes only so far. He says employees can't be assets as assets depreciate in value and people should become more valuable as they become more experienced. He suggests that we should see employees as investors. The idea put forward in Human Capital (Jossey-Bass) is that organisations should not seek to own or control employees - as the term asset implies. Instead, they should see them as free agents who invest their abilities, energy, behaviour and time in companies that give them the best return.
It is a powerful notion, and Mr Davenport claims to have seen it beginning to be put in place in a few organisations. But one can't help feeling that just as senior executives never truly adopted the idea of people as assets rather than costs, they're not readily going to see them as investors. Doing so would require a fundamental rethinking of the realities of business and, in particular, a full abandonment of the command and control attitudes that linger on, despite protestations to the contrary.
The challenge is particularly tough for human resource departments - not least as human beings can hardly be regarded as resources.
More seriously, though, the only way that such a move towards "deals" between employers and these free agents can possibly come about is if the HR departments devolve many of their traditional functions to line managers. The problem then is for the HR specialists to find something meaningful to do.
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 4 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...