The greatest asset

As a columnist with fairly strong views on things I'm used to criticism. But on this occasion I can only assume that it is because my argument has been misunderstood and that's irritating because it means I have not expressed myself well enough.

I was writing in Human Resources Magazine about the lessons that human resources professionals might draw from the bail out of the Royal Bank of Scotland which, without that bail out, would have suffered the fate of the Monty Python Norwegian Blue - it would have ceased to exist.

One of the things I said, and which I continue to say because I think the expression is dishonest, is that it is wrong for a company boss or a head of HR to declare that "our people are our greatest asset."

I say this because of the accounting convention to declare assets on one side of the balance sheet and employers on the other under costs. This also puts employment costs under the heading of liabilities. While I'm sure no-one would declare "our people are our greatest liability," I think few company bosses would demure from considering employees as their greatest cost.

For this reason I don't think it is helpful to use such accounting terms as assets and liabilities when considering the value of a workforce. Of course people are valuable. In some cases they are the only real value a business has apart from other fragile intangibles such as goodwill. It explains why I prefer to think of people as the living, breathing investment capital of a business. When a company recruits someone it is investing hard cash and not a little faith in the ability of the individual to add value to the balance sheet.

Training, promoting and rewarding that individual might well increase their capital worth. That is what investing is all about. But thinking of people in terms of asset values is less helpful since people can never be described as fixed assets. They can improve their value for a business or their value might depreciate.

It is why companies must think of inputs, outputs and value when looking at employees. Nor should they use such assessments purely with internal employees. External skills have a value too. Some companies prosper by outsourcing almost all of their talent. In fact some ventures, such as a West End musical, rely entirely on assemblies of talent. In such productions it is probably better to think of "we" in a collective sense than in the ownership sense of "our people."

Even companies with employees on their payroll should beware the "our people" claim and certainly any boss should be careful about talking about "my people." It is a highly presumptive phrase. People can never be owned. For that reason they should never be regarded as assets, not as long as they have legs to walk away.

You may, of course, believe this to be "tosh" but I don't know how to express my thoughts on this issue any other way. People are our greatest investment - now I can go along with that.

Free office space

Starting a new business? This new offer from Regus could be worth a look.

25 years, still red hot?

Virgin Atlantic is celebrating its 25th anniversary. But is it still red hot? A customer takes issue.

Cowbells and cuckoo clocks in Davos

This week nearly 1,200 chief executives and chairmen, plus another thousand celebrities, politicians, academics and others who might describe themselves as power brokers, not to mention a small army of journalists, lobbyists and public relations people will converge on Davos for the World Economic Forum.

But there will not be very many women according to this article.

Not that women should alarm themselves too much. Davos does not have a great reputation for getting things done. It produces various publications such as its Global Gender Gap Report. But the above article would suggest that its organisers do not read them.

Yes, it has launched various initiatives that have done something to bring together businesses and political administrations. But its biggest benefit seems to be for Davos itself where increased sales of Swiss Army pen knifes, cowbells and cuckoo clocks ensure the continued health of its shopkeepers.

At least it is living proof that man-made global warming is a reality thanks to the billions of cubic meters of hot air it generates each year. Then there's the giant hole in the snow that is the Davos carbon footprint. We might be thankful, however, that this year it is getting some of the world's most senior bankers out of their offices for a while, saving depositors from even more damage, at least for a few days.

They say that pinstripes are out and sack cloth is in this year. Don't you believe it. The ritual massaging of egos and mutual bolstering of confidence among those disillusioned enough to believe in their omnipotence will continue unabated.

Summing up, a precis of the annual output of Davos amounts to this: "We have got to something about X" where X can be: world poverty, AIDS, malaria, global warming, or, this year, the international banking crisis. It would be a refreshing change one year if the bosses admitted that "x" meant "keeping our jobs."

Cook off, says the FT

I notice that the Financial Times canteen is having a competition among its chefs this lunchtime billed as a "cook off." Several of its editorial staff, meanwhile, have been asked merely to leave.

Back-slapping hacks

It was cocktails in the swish St Martin's Lane Hotel, London, last night for the Work Foundation's annual Work World Media Awards.

Maybe it was something about the venue but there was a pleasing intimacy about the awards this year and there was plenty of bonhomie, which makes a change among journalists.

Polly Toynbee, the Guardian columnist, seemed genuinely touched at receiving a lifetime achievement award. I suppose this is because it comes from within a relatively small circle of business, management and employment writers who are generally sparing in their mutual back-slapping.

As one of the judges, I can confirm that the BBC's Business Editor, Robert Peston was also a popular choice for two awards this year, including Broadcaster of the Year.

I have known him many years, ever since he came to the FT to take-over the investigative team - just as I left it for the employment beat, funnily enough. I have a lot of respect for the man we used to nickname "The Pest." He is not only a first rate reporter but a fine columnist too and a decent guy. He deserves his success.

I was saddened to hear of so many of my contemporaries at the FT who have decided to leave, taking one of the generous packages on offer just now. As one of them said, "it was too good to ignore." But I know, from my own experience, there will be sadness in going. Businesses are still shedding too much grey hair.

A bank too far

I can relate to Fred Goodwin, former chief executive of the Royal Bank of Scotland, in more ways than one. We both had relatively poor backgrounds, both went to state grammar school and both worked on the liquidation of the Bank of Credit and Commerce International (BCCI), he as a Touche Ross accountant and I, as a financial reporter.

If only the similarities would end there, but a couple of others remain a source of pain. The first is that I regarded RBS as one of the best run businesses anywhere, not just in the UK, but anywhere.

I was so impressed with its operations - particularly in the way it handled employees - that I persuaded my wife (what's mine is 'ers and vice versa in our household) that RBS shares would make a good investment. I'm not a gambler. Banks are rock solid, I argued, and this is as solid as they come. They were around £12 a share at the time. Today they are trading at about 12p a share.

Goodwin was the Napoleon Bonaparte of banking, a financial general whose troops - or investors - would follow him anywhere. Even when the bank was suffering and instigated a rights issue, we responded in our thousands, like those who rallied to the Marseillaise at Waterloo.

We remembered the glory that was Nat West - Goodwin's Austerlitz. Few takeovers could have been administered with such aplomb so that Nat West's operations were absorbed almost without a hitch. But Goodwin was always eyeing a greater empire.

His own Waterloo was ABN Amro, a bank that he feared would be plucked from his grasp by a Barclay's Bank-led consortium. This was his undoing. Not all of his board was united over the takeover; some thought RBS was paying too much. But Goodwin by now was the general who saw the business as something of a battle for supremacy among banks. It was never that and ABN Amro was a bank too far.

How many times have we seen great enterprises wrecked on the back of a singular ambition? The thing is that there are still great people at RBS. Many of the old guard might have gone, but enough remain to remember the good days. Can they resurrect the best of the bank for taxpayers? I hope so, I really do, but they won't be doing it with any more of our money, other than our taxes. Even fools can learn.

The darker side of social networking

You open your coffee shop for a new day's trading, a brick comes flying through the window, followed by mayhem. Germany in the 1930s? Think again.