Brains trump brawn. According to The New York Times, Merv Griffin has made "close to $70 million to $80 million" in royalties from the "Jeopardy!" theme song, which he wrote in less than a minute. One of Japan's largest export industries, reaching an astounding $80 billion in 2004, is animation. Not even two years old, with no profits, YouTube was purchased by Google for $1.65 billion. Disney's Snow White video release generated $800 million in revenue, $500 million to the bottom line, from a movie made in the 1930s.
Compare these supposedly ephemeral products to the value of an automobile from the same decade, and you quickly realize how important knowledge is to wealth creation. The knowledge economy has been a gradual evolution, resting on the shoulders of those who came before us, a testimony to the importance of mind over matter, as well as a further refutation of the physical fallacy.
Yet peruse a corporate annual report, and inevitably you will read "people are our greatest asset" (or "resource"). Stalin used to say it as well. Thinking of workers as resources is equally demeaning, implying people are no different from, say, timber, to be harvested when you run out.
Perhaps one of the reasons for the use of these demeaning words is managers do not understand the worth of their people because they cannot be measured as exactly as accountants record assets, inventory, and other tangible resources.
Humans deserve more respect than a phone system or computer. Assets are passive, bought and sold in the marketplace at the whimsy of their owners; conversely, knowledge workers have ultimate control over their careers. Why do we insist on perpetuating this belief that people are resources to be mined rather than human capital to be developed?
A Chinese proverb teaches the beginning of wisdom is to call things by their right names. Your people are not assets, resources, or inventory, but human capital investors seeking a decent return on their investment. In fact, your people - and especially those who are knowledge workers - are actually volunteers, since whether they return to work on any given day is completely based on their volition.
Consider for a moment how people decide which volunteer organizations to which to contribute some of their time and talent. The choice is usually based on a desire to contribute to something larger than themselves. They work hard for these organizations - some would say harder than at their regular jobs - because they are dedicated to the purpose, and possess the passion, desire, and the dream to make a difference in the lives of others. All for zero monetary pay. Why? This is not just an economic decision, it is a psychological and emotional decision.
This is a profoundly sad commentary on the state of the business world today (no wonder Dilbert is so popular, with his images of cynicism and disdain for everything corporate). Charitable organizations view themselves as real communities, whereas many companies are nothing more than payroll ledgers.
There is much talk regarding "retaining" talent. But who wants to be retained? This is more of the human cattle mindset. Knowledge workers want to be engaged, challenged, inspired, and valued. No matter how well we pay our people, if we don't give them that sense of purpose, the vision of achieving a better future, we will not capture their pride, and their hearts.
In the real world, debits don’t equal credits by Ronald J. Baker
About the author
Ron Baker is the best-selling author of "The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services;" "Pricing on Purpose: Creating and Capturing Value;" "Measure What Matters to Customers: Using Key Predictive Indicators;" and "Mind Over Matter: Why Intellectual Capital is the Chief Source of Wealth," from which this article has been adapted. You can reach him at (707) 769-0965, or e-mail at Ron@verasage.com. He Blogs at www.verasage.com. Copyright © 2007 Ronald J. Baker. All Rights Reserved.