Every day, somewhere in America, the chairman of a corporation stands in front of the stockholders, pounds his or her fist on the podium, and proclaims, “People are our most important asset!”

Meanwhile, back at the Human Resources office, a personnel jockey is shoving resumes through a key-word scanner like so many soup cans at the grocery checkout.

People are our most important asset.

Yah. Between a company’s public relations, investor relations, human resources, and marketing departments, American business has turned into a voice-mail menu system where your call is very important to us, and thank you for holding while we figure out what the hell to do with you.

Yah. You’re as important as the poor suckers who work for us and as important as the professional community from which we recruit… more suckers.

A reader drove this home for me the other day. Here’s the story of one “most important asset“:

Ford Motor Company ranks employees on a 4-tier scale which estimates how much management potential they have. I was a 4, the lowest. Essentially, an engineer forever. People almost never changed tiers… as though (imagine!) managers didn’t want to admit they might make a mistake in their initial rating of people.

Tier 1’s were “golden children” — they could screw up massively, but they still got promoted. Anyway, after finding out I was a 4, I wanted to move up the list, so I found Ford’s “Leadership Profile” web page — what they said they wanted in their employees as traits of future leaders. Things like:

  • Thinking beyond your own job
  • Thinking systemically
  • Willing to take risks
  • Trying to innovate
  • Willing to challenge the status quo

So — naively — I started to do what was on the list. And I got majorly slammed for it. Here’s what happened.

I attended a meeting about how to interact with customers more effectively. We were told “The Equation.” Profit = Price – Cost.

OK, I buy that. But then we’re told that we cannot affect the price we charge. That’s determined solely by the market, so our only hope of increasing profits is to reduce costs. Now, I have no problems with reducing costs, that’s a good thing… but it becomes a game of diminishing returns eventually.

So at this meeting, in a huge room, with managers facilitating the discussion at each table, I chime in with, “Wait, we CAN affect the price we charge if we have products that are differentiated with respect to function, quality, speed of service, and just the ability to make those parts that our competition can’t handle. If we have differentiation, we can use that as leverage to charge more.”

The manager looks at me, and replies, “That’s just business theory. We’re talking about facts-on-the-ground.”

Me: “But that relegates us to the status of a commodity product across the board. Our customers will beat us against our competition until we have no profit margin left, having given it away trying to buy the business.”

The manager gives me a cold stare, clearly looking at my name tag. I shut up — and that afternoon, at home, I start updating my resume because, as I told a few close friends, “Get me outta this chickensh*t outfit!

I can imagine the huge black mark next to my name in some file somewhere. I left Ford while I was still a 4. I’ve been gone for quite some time now. I think Ford has been, too.

Ford Motor Company posted $2.7 billion in losses in 2007, laid off 40,000 workers in the past three years, and has abandoned a long-standing goal of returning to profitability in 2009. The reader worked there a few years ago.

People are not the most important asset at companies like Ford. The assets these companies are trying to manage include conventional wisdom, complacency, excuses, fear, jargon, public relations blather, fear, advertising slogans, and fear. They oughta put this stuff in their job descriptions and in their job postings.

Meanwhile, like our friend the engineer, the 1’s who are tagged as 4’s because they dare to perform like valuable assets are looking for companies that know what to do with 1’s (other than shove their resumes through the key-word scanner). Any takers?

  1. Typical. My current employer ramped up the “employer of choice” big lie a while ago, beginning less than six months after the most recent round of layoffs. With no trace of irony intended, I might add.

    Most recent example: All members of my team must undergo a 4-hour mandatory training less than a week before the hard deadline for our current major project. This training has nothing to do with the current project, and could easily be delayed until after the project deadline. When our supervisor pointed this out, he was told, “tough.”

    But I can buy discounted health insurance policies for my Beagles.

  2. My last employer came out with a “Good to Great” program, apparently as a result of someone reading the first few pages of a book while in line at Wal-Mart or something. The curious notion that they seemed to be selling us was that we were “good”, but if we were to fire 20 people, we’d be “great”. Oh, plus there were coffee mugs.

    The only thing “great” about being even more short staffed than we already were was that the company got sold not long after to people who seem so far to believe that the work does in fact take people if you want it to get done.

    I threw the coffee mug away.

  3. One of Steve Adams best Dilbert strips:

    Pointy-haired boss speaking to a team meeting (showing what looks like a diagramatic triangle): “Here is one of our new upside-down organization charts, showing management holding up our most important assets”

    Dilbert, raising his hand: “If the companies’ employees are it’s most important assets, why aren’t we paid more?”

    Boss, giving Dilbert a blank stare: “Because they never think of ideas like this upside down organization chart”.

  4. All politics is local. Former Speaker of the House Tip O’Neill coined this phrase which encapsulates the principle that a politician’s success is directly tied to his ability to understand and influence the issues of his constituents. (1)

    A middle manager at Ford cares about one thing – her well-being. When she sees you she thinks – are you contributing to my well-being?

    When you sit opposite an HR person at Ford he thinks of only one thing – are you contributing to my well being?

    Ford Motor Company’s well-being is not a concern unless, of course, it directly and immediately affects my well being.

    That’s the way it is. (2)

    1 Lifted directly from Wikipedia.
    2 Lifted directly from Walter “Uncle” Cronkite

  5. Tyler,
    The examples of managers you mention would be warped. Clearly, Ford’s losses are not contributing to well-being. What’s interesting is how managers’ sense of what contributes to their well-being is shaped. Something is very wrong.

  6. I previously worked as an engineer for a company whose culture turned very weird. The root cause was declining margins due to fierce competition and the cyclical capital spending cycle of that industry. In an attempt to increase profitbility, the company tried out just about every management fad that consultants could think up. It finally came down to fake “diversity” and a class system similar to the one Steve described. There even was cult-like, off site leadership courses for the annointed ones. I had once been a member of that group, but flunked out of the management track because of my inability to shut up and pass along bad ideas. Saying what you thought was not a formula for upward mobility in that organization even if your predictions came true.
    None of the fad programs made any difference except to alienate more of the employees. The profitability kept declining due to the inability of management to maintain pricing. Right before the big layoffs started, the HR department came out with a new slogan, “The best company to work for”. The fact was that it may have been a good company to work for 10 years prior. But it was a pretty wretched place now, and slogans were not going to turn it around.
    That’s when I knew it was time to move on. Seven years later the employee morale there is still foul.
    My only regret is hanging around there too long.

  7. I think I can encapsulate current American employee-management theory in one sentence:

    “The floggings will continue until morale improves!”

    And HR employee-recruitment practice boils down to this:

    “We’re looking for people who fit our paradigm — and you’re not it.”

    All the rest is commentary.

  8. I once worked for an organization in which I found myself in a department that actually did care for employees and did see us as their most important asset. In fact employee satisfaction was seen as a key driver of profitability. As a service company, it made sense; you can’t expect people to really go 110% for a customer if you they feel shafted in the process. It was open book, open door and turnover was around 1%, where as other departments were 10-20%. People worked more, but were happier in my department because you actually got listened to, you were accountable for your screw ups, but you were also rewarded for your positive results and what was seen as a positive was clearly outlined and agreed upon. In terms of my abilities to create new ideas, best time in my career was during that time.

    Two companies later and researching for a new job to be closer to family, company culture is an important piece for me, when I research companies, I have yet to find one when doing informational interviews, that actually means what it says about people being their most important asset. I keep hearing that the bottom line is important, funny, when I was at that company 6 years ago; the philosophy was “employee and customer satisfaction is the key to profit; the bottom line takes care of itself after that.” After 9/11 when we saw competitors lose 25% of their revenue, we were growing 25% and enjoying our time at work.

    It is a shame most companies can’t see the light. I recently was consulting to a company with some major internal problems the cast system was clearly in place and some of the brightest people were not in the chosen group, but a lot of people who could play the corporate politics game really well, were on the fast track to upper management. Even they knew the ideas being put forth wouldn’t work, but felt no urgency to mention that. At the same time, layoffs occurred almost monthly.

  9. John,
    Your company’s “new slogan” reminds me of a company I worked for long, long ago. We could not make a delivery properly to save our lives. Everything that could go wrong, did. So the president of the company solved the problem, by re-naming the shipping department the “Efficient Deliveries Department.” Guess what happened?

  10. Perhaps another way of looking at this is, is the customer always right? Well, not all the time if you ask me. I think a perfect example of this is our nation’s vocational rehab system, where most if not all the time the so-called “rehab professionals” think they have all the answers and that the customers re just little babies who can’t tell right from wrong. On the other hand, there are those companies out there–big and small alike–where the customer actually does come first and is right all the time. I have utilized on a few occasions the tech support for the company who manufactures my main screen reader. I was always treated with the utmost respect and courtesy when calling or emailing them, but there’s one particular instance I’d like to share. I was still living with the folks at the time. Something went wrong with the computer keyboard I was using, but I can’t remember exactly what. I was the only one home at the time, and I had to call tech support for my screen reader as I was pretty sure the problem was not with the computer itself. I was put on hold only for a few minutes, and then a very friendly technician answered and patiently guided me through several steps in an attempt to correct the problem. We were in conversation for about fifteen minutes when it became time for me to go somewhere, so I kindly asked the technician if I could call back at a later time when I had sighted assistance in the house. He said I could, so that night my dad sat with me and I called. As luck would have it I got the same technician I had spoken with earlier that day. He had stayed after the close of business just to help us. So I put my dad on the phone, and voila! Problem solved. I have never had a bad experience with this company, and that is undoubtedly due to the fact that they view their customers as good market share. This screen reader manufacturer and others have recently fallen on hard times and some people will tell you that customer satisfaction is down, but I have yet to see that firsthand.

  11. When Personnel became Human Resources, it was an indication that people were being seen as just one more ‘thing’ – like paper clips, chairs, tools, desks, mops and toilet brushes. To the extent that HR people look out for anyone other than themselves, the look out for the company’ interest. It used to be they looked out for the welfare of the employees. Good companies respect their employees and the employees therefore bust their butts to do the job right. Bad companies treat employees like crap and the employees respond accordingly.
    Of approximately 50 companies I have either worked for or consulted at in the last 45 years, I can count on one hand the number of good ones.

  12. John Zabrenski wrote “…the company tried out just about every management fad that consultants could think up.”

    BTDT. In my experience I’ve seen so many fads come and go… and in the words of my late father Prof. Pearson Hunt of the Harvard Business School, “Big ideas may only be a search for a way out.”

    Zabrenski also wrote: “Saying what you thought was not a formula for upward mobility…” I’d add that being right is the unforgivable sin if what you’re saying is not popular.

    For example, at a major automotive company to be unnamed, I managed to propose to a VERY high up person five “big points” on where we needed to improve. You know that all of them were, later, announced as corporate initiatives. No credit to me, of course.

    When I was finally downsized from there, one woman in the group at the outsourcing counseling service (!) complained “WHY US?” A friend of mine simply stated “Look around the room. Who’s here? Everyone here has a brain and a spine.”