People don’t currently get a line item on the balance sheet, but more likely than not they are your greatest asset.
To be fair to our accounting brethren, valuing and testing a “talent asset” would be quite the headache.
However, with the right development and growth, individuals and teams can be a longer-lived asset than any piece of equipment.
Still, personnel costs flow through the income statement, so they get called expenses.
People on the balance sheet may be unattainable, but treating people like investments doesn’t have to be about accounting.
To us, it’s about bringing the return on investment (ROI) mentality to hiring and incremental development.
You wouldn’t hire somebody and expect to get less value than what you pay them, so think through that ROI potential. It could have direct, quantifiable impact (e.g. sales) or indirect, less quantifiable value (e.g. HR/culture), but the ROI is there.
Use that “People ROI” to make critical team decisions, set goals, and hold people accountable.
Turns out that if you treat people a bit more like that machine on the production floor, you may actually treat them more like…people.
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