Your People Are Not Your Most Important Asset!

Go to any company’s web site, pick up any company’s annual report, read any company’s marketing material and chances are good that you will come across the phrase, “our people are our most important asset”. In some cases in order to emphasize how important, the phrase is often in bold and italics.


Do the leaders of these companies actually believe that their people are assets? If they do then why aren’t they managed in Finance rather than HR and why not use an Asset Management System instead of an Applicant Tracking/Employee Management System?

In accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent ownership of value that can be converted into cash (although cash itself is also considered an asset). Assets are tangible and include such things as inventory, buildings, equipment, or intangible, which are nonphysical resources and rights such as goodwill, copyright, trademarks, patents, computer programs, accounts receivable, bonds, stocks. But not People.

In his best selling book, Delivering Happiness, Tony Hsieh, CEO of, Inc writes about his company’s strategy for growth. “Many corporations like to say that their people are their most important asset. There are a few problems with that approach. First, if someone leaves, you have lost an asset. Second, if the company grows, there will come a time when the company outgrows an employee because the employee still has the same skill set that he had when he first joined.” Hsieh suggests that for most companies the solution is to let that employee go, and hire a more experienced outsider who may or may not be a good fit for the company.

Zappos’s solution was to not consider their employees(people) as assets, but rather create and build a pipeline of talent for each position in each department, from entry level to the most experienced consisting of current employees and outside candidates(qualified, interested, available). Once the pipeline is built and filled then anytime a single individual leaves the company, there will always be someone in the pipeline who can assume his/her duties and responsibilities. This pipeline is the asset and this pipeline of talent is the company’s most important asset.

This pipeline of talent as an asset concept seems to work for Zappos, just look at how successful they are. Could it work for your company?

Here is a checklist that will help you develop the pipeline as asset mentality.

  • Have a clear performance profile, job requirement written for every position in every department.
  • Look to both internal and external candidates to fill the pipeline.
  • Always have the pipeline filled.
  • Always reevaluate the business strategy of the company and department and realign the pipeline to match.
  • Provide training and opportunities for every employee to move up in their department and in the company. Provide the tools for them to help manage their careers.
  • Never be caught by surprise. Employees will leave your company, especially the good ones. Always have a replacement at the ready.
  • Keeping each and every pipeline filled and current should be the most important job for your internal recruiters. Reward those who do so.
  • Lastly, change the statement regarding employees as your most important asset to the following, “Our Talent Pipeline is our most important asset.”

One of the services that our company, Q4B, offers each and every client is talent pipeline management. It is a critical piece to how we engage with our customers and is one of the areas where we receive high praise from our customers. We do this well. However, after reading Tony Hsieh’s book I am even more convinced as to how important our pipeline management service is, or should be to our clients and prospects.

We are really managing their most important asset. And how cool is that!


Views: 2183

Comment by John W. Ferneborg on August 3, 2011 at 2:06am

That's an interesting perspective and probably a good sign of the times.  I remember hearing Lee Iacocca quoted as saying "In the end, all business operations can be reduced to three words: people, product, and profits.  Unless you've got a good team, you can't do much with the other two."

It just goes to show how much has changed in the last decade.  Interesting post, I can't say I want to live by Tony's philosophy, but I can't argue it's not working for him or

Comment by Nick Tubach on August 3, 2011 at 10:12am

Thanks John, even though you may not want to live by Tony's philosophy, I am sure that like many people you wouldn't mind being in his shoes, or any of Zappos shoes for that matter

Comment by John W. Ferneborg on August 3, 2011 at 1:52pm

He and the company have done quite well.

Comment by Trish McGarrell on August 3, 2011 at 4:49pm
I was always taught to have my replacement ready to go as well as don't recruit when the position is open - Always have a pipeline of candidates ready to go! Great insight Nick!
Comment by Tom Dimmick on August 4, 2011 at 1:28pm
Good post Nick.  It is especially true that people are NOT the most important asset in an economic downturn.  The question I have for this employment model would reflect that reality.  When you are asking 3 to do the work of 4 it becomes very difficult to fill the pipeline behind them because the things that get done with 3 are very different than with 4.
Comment by Sue Orr on August 4, 2011 at 5:00pm
I disagree.  I have to say I'm disappointed.  Who would want to work for a company that doesn't consider it's employees to be it's most important asset.  If your pipeline is your most important asset, that means you don't care about me or see me as an asset to your company.  You just see me as a replaceable cog in your pipeline.  I don't think you can just go find someone else that will be as efficient, intelligent, and reliable as I am.  Everyone has different strengths and weaknesses.  Your article assumes that employees are easily replaceable.  If that's how you feel about your employees, then you don't have top talent and you should trying to replace them so you can view your employees as assets.  I'm glad I don't work for Zappos.  I'm shocked that you think Zappos' strategies apply across the board.  Their pipeline strategy makes perfect sense for a retail organization, but it is a very poor strategy if you try to apply it across the board to other industries and professions.
Comment by John W. Ferneborg on August 4, 2011 at 7:49pm
I agree with you Sue... I was reading Dr. Seuss's "Yurtle the Turtle" to my kids last night and it made me think of Hseih's view on employee assets.


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