People cannot be managed. Inventories can be managed, but people must be led.

The line contrasts two modes of organizational control: management as the optimization of systems and resources, and leadership as the human work of persuasion, example, and purpose. By saying people “cannot be managed,” Perot implies that attempts to control individuals as if they were inventory—through purely procedural or coercive means—will fail or backfire. “People must be led” emphasizes trust, direction, and shared goals: leaders create conditions in which people choose to perform rather than merely comply. The quote’s significance lies in its critique of mechanistic, metrics-only thinking and its insistence that human agency, morale, and meaning are central to sustained performance.