Accounting for people is much more difficult than accounting for profit.
Yet people are the value creators....we are much better at thinking about return on investment of machinery than we are of people. Why? I tend to think it is more emotional, it is sensitive.
- Yet if someone cannot answer a simple question of how they bring value into the business, then they are not fully engaged. A credit controller is bringing in money to pay the wages, to create the ideas, to sell to the market etc
- Of course if we don't measure then we can judge on who we like, on who is easy to manage, on who agrees with us! Yet it is the ones who challenge that will bring out the most value in you!
Imagine if your balance sheet as a leader was created....
The assets being the people who create value for the business. Split of course into long term and short term for people delivering now and people, delivering now but capable of developing as the next genereation of leaders.
The liabilities being the people who either need training, direction or just need to go.....the former being short term and the latter long term.
Any business needs more assets than liabilities.
Any business needs to ensure maintenance programs for those assets to be working at the optimum capacity.
Any business needs to reinvest in assets so that they don't become outdated to the market.
Any business will have to have liabilities...its about managing them not to lose profit from too much interest being paid out to them...not on the assets which drive the business growth.
When was the last time...you took at your peoples balance sheet?
