Just stop lying about your employees...

Your assets are your biggest assets

I asked MidJourney to show employees as costs

So for the longest time, as long as I’ve been in L&D, I’ve been hearing the lament that L&D can’t “get a seat at the table” - meaning of course, that usually (unless there’s a CLO) L&D isn’t represented in the C suite. I always attributed that to leadership just not understanding how the learning function could be a competitive advantage or not having good enough metrics on the impact of our interventions to tie them to the bottom line. Those dynamics may have been in play but now I think there is a much more fundamental reason.

This article from HBR nails The Big Lie:

“You hear it all the time: companies touting employees as “their most valuable assets.” But under current accounting standards, that is simply false. By definition, employees are not assets since companies do not have control over them. Workers must convert raw materials – be they commodities or blank computer screens – into finished inventory to be paid, but if these workers want to quit, they can take their skills and training with them.”

So you can put platitudes on posters and repeat things at the company all hands but when the CFO looks across the balance sheet, there are assets and liabilities and employees are the latter. They are costs and you don’t invest in costs. You minimize them. You look to reduce them. You certainly don’t have a way, given the state of Generally Accepted Accounting Principles (GAAP), to describe their value to the company. Want to know why training budgets get cut? Because they’re bill payers.

Now Werner Vogels is a VP and CTO at Amazon. He’s also a DJ but that’s a different story. His and other execs’ pay is well documented in the annual filings but what’s missing is literally everyone else. C suite folks make the big, strategic decisions and face a ton of pressure to be sure but they’re not the ones making last minute code changes or adjusting marketing budgets or making hiring decisions for the SDEs that the team desperately needs. Those absolutely necessary calls are made my mangers, senior managers, and maybe some directors. We’ve all (I hope) have had the chance to work for those folks in the past - the ones who literally kept the wheels rolling and the lights on. You can’t find them on a balance sheet.

There is so much wrapped up in this (IMHO). There is the “I don’t know who invented water, but I bet it wasn’t fish” dynamic. The end result there being that some things that are so important to our daily lives (like GAAP), also manage somehow to become invisible or fade into the background or we begin to regard them as some sort of immutable, received wisdom. There is the age-old warning that investing in training your employees just means you’re getting them ready for their next job elsewhere (what if we train them and they leave and its less-repeated cousin, what if we don’t and they stay?). Part of it also reminds of something that will seem totally off course but bear with me. I joined a fraternity in college. Was actually a national officer and ended up working in the HQ for a couple of years. Now when American fraternities were started, they needed to be secret because membership in one could get you kicked out of college. They also kept their rituals secret because they were founded by men who came from similar groups like the Masons. Now though, in my humble estimation, there is only one reason why we keep our rituals and the things we say we hold sacred in them, secret. Because if people knew what we swore we’d stand for and then saw how we behaved, they’d see many of us as hypocrites. In other words, having our value obscured actually serves us. Now I know many many people across L&D who would love, LOVE, to see an accounting system that actually valued people in a way such that our interventions and their value was visible and traceable. I also think there are some who see risk in that. So what do we do?

We need to turn the considerable brain power of the L&D space toward advocating for a change in these systems and reassuring our people that if we make these changes, it will give us a real chance to make our value known and visible. This dynamic will become so much more critical as AI moves across the face of the enterprise and starts chewing up many of the activities that we do and we’re forced to look for other places to add value up the chain. It would be a huge help to know where we’re starting.