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9781416533276

egonomics What Makes Ego Our Greatest Asset (or Most Expensive Liability)

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  • ISBN13:

    9781416533276

  • ISBN10:

    1416533273

  • Edition: Reprint
  • Format: Paperback
  • Copyright: 2008-09-09
  • Publisher: Touchstone
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Summary

Using five years of exhaustive research, Marcum and Smith provide compelling evidence and matter-of-fact answers on how to strike the balance between ego drive and the hidden power of humility to work and communicate more effectively. The authors illuminate how ego subtly interferes with team dynamics and stalls business performance but also how the positive side of ego sparks the drive to achieve, the nerve to try something new, and the tenacity to conquer adversity.

Author Biography

David Marcum and Steven Smith travel the world teaching people to utilize the corporate asset of ego and limit its liabilities. With decades of experience and degrees in management and psychology, they¹ve worked with organizations including Microsoft, Accenture, the U.S. Air Force, General Electric, Disney, and State Farm. Their work has been published in eighteen languages in more than forty countries.

Steven B. Smith is chairman, president and chief executive officer of In2M Corporation, a financial software and services company that he co-founded.  For the past fifteen years, he has been actively involved in assisting and educating people in personal and small business financial management.  Before starting In2M, Smith served as a senior member of the executive team at Megahertz Corporation.  He also helped found two additional successful ventures, Floppy Copy and DeltaValve.  Smith holds a finance degree from the University of Utah.

Table of Contents

Ego and the bottom line: why managing the power of ego is the first priority of businessp. 1
The ego balance sheet: the four early warning signs that ego is costing your company, and the three principles of egonomics that turn it aroundp. 21
Early warning sign 1-being comparative: how being too competitive can make us less competitivep. 38
Early warning sign 2-being defensive: the difference between defending ideas and being defensivep. 55
Early warning sign 3-showcasing brilliance: how intelligence and talent can keep the best ideas from winningp. 74
Early warning sign 4-seeking acceptance: how our desire for respect and recognition gets in our wayp. 89
Humility: opening minds and creating opportunity for changep. 100
Humility, part II: intensity and intent: using humility as a bridge to turn silence or argument into vigorous debatep. 137
Curiosity: how different types of curiosity unlock our minds and conversationsp. 168
Veracity: how to make the undiscussables discussable, and closing the gap between what we think is going on and what's really going onp. 199
Appendixp. 229
Notesp. 235
Acknowledgmentsp. 249
Indexp. 251
Table of Contents provided by Ingram. All Rights Reserved.

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Excerpts

1

ego and the bottom line

Every good thought that we have, and every good action that we perform, lays us open to pride, and thus exposes us to the various assaults of vanity and self-satisfaction.

-- WILLIAM LAW

Ego is the invisible line item on every company's profit and loss statement.

And because ego's subtly out of sight on the P&L, that's precisely why for decades, if not centuries, we've become no better -- and maybe no worse -- at managing the most pervasive, powerful force inside every person in every company.

Chances are when you read the opening line of this chapter, the idea that ego isprofitablewasn't exactly the first idea to catch your attention. But despite the negative reputation of ego, it isn't purely aloss.On the profit side, ego sparks the drive to invent and achieve, the nerve to try something new, and the tenacity to conquer setbacks that inevitably come. Surprising as it may sound, many people don't have enough ego, and that leads to insecurity, hollow participation, and apathy that paralyze cultures and leaders.

Invested into every team meeting, boardroom debate, performance review, client conversation, contract negotiation, or employment interview is the potential for ego to work for us or against us. If we manage ego wisely, we get the upside it delivers followed by strong returns. But when that intense, persistent force inside manages us, companies suffer real economic losses.

Over half of all businesspeople estimate ego costs their company 6 to 15 percent of annual revenue; many believe that estimate is far too conservative. But even if ego were only costing 6 percent of revenue, the annual cost of ego -- as estimated by the people working to produce that revenue -- would be nearly $1.1 billion to the average Fortune 500 company. That $1.1 billion nearly equals the average annual profit of those same companies. But whether ego costs us 6 percent of revenue or 60, when people estimate those costs, what are they thinking of? Usually the last time they crashed into someone's ego or the latest headlines.

Under the leadership of David Maxwell and then James Johnson, Fannie Mae delivered unmatched performance from 1981 to 1999, beating the general stock market 3.8 to 1. Fannie Mae was listed as one of only eleven companies in Jim Collins's study of 1,435 companies inGood to Greatthat created and sustained unparalleled performance, with leaders to match. On January 1, 1999, however, Franklin Raines replaced Johnson as CEO. Five years later, under pressure from Fannie Mae's board of directors after questionable accounting practices, Raines resigned. "By my early retirement," Raines claimed, "I have held myself accountable."

Ironically, four years earlier, in 2002, Raines was asked to testify before Congress about the collapse of Enron. "It is wholly irresponsible and unacceptable for corporate leaders to say they did not know -- or suggest it is not their duty to know -- about the operations and activities of their company," Raines told lawmakers, "particularly when it comes to risks that threaten the fundamental viability of their company." Raines walked away from Fannie Mae with a retirement package potentially worth $25 million and total compensation of nearly $90 million during his tenure. He was replaced on December 22, 2004, by Daniel Mudd.

As we were writing this chapter, a colleague emailed us a news release. The headline announced, "Fannie reaches $400 million settlement." The first line of the release read, "Fannie Mae's 'arrogant and unethical' corporate culture led to an $11 billion accounting scandal at the mortgage giant, federal regulators said Tuesday in announcing a $400 million settlement with the company." [emphasis added] Daniel Mudd's leadership was also questioned. "Fannie Mae thought itself so different, so special, and so powerful," wrote Bethany McLean ofFortune,"that it should never have to answer to anybody. And in this, it turned out to be very wrong." It took Fannie Mae almost twenty years to move from good to great, and less than five years to go from great to good to...only time will tell.

The risk in the headlines of ego out of control, or the brutal impact of a long buildup of an egotistical culture, is that we can say to ourselves, "We would never do that. We're just not that bad." That's true. Ninety-nine percent of us will never be Dennis Kozlowski (Tyco), Ken Lay and Jeffrey Skilling (Enron), Bernie Ebbers (WorldCom), or Martha Stewart or earn a nickname like "Chainsaw Al" (attached to fired Sunbeam CEO Al Dunlap). We won't go to prison or single-handedly cause the collapse of our companies -- and that's the trap.

Because those stories are so extreme, rarely do they cause us to ask, "Isanypart of that true ofourcompany?" "What aboutmyteam?" or "What aboutme?"That's when we tune out, and we miss the behaviors that never get that severe but subtly and surely undercut our ability. As authors, we can tell you from experience and our research that ego-driven behaviors rarely feel extreme at any one moment in time. "We started great," as one Fortune 50 manager said to us. "Over time that greatness led to ego, which then led us back to good, and now we find ourselves needing to start over. We were blind to how our egos were escalating along the way."

Organizations are rarely short of people with enough talent, drive, IQ, imagination, vision, education, experience, or desire. As consultants, in our conversations with leaders and managers following failed projects or average results, we've often heard, "He's very innovative, but..." or "She has incredible vision, if she could only..." or "We were on the right track, and then all of a sudden..." The exceptions to the praise are consistently tied to the escalation of one thing -- ego. So if the costs are so deep and persistent, why do people hold on to ego so tightly and, in some cases, even fight for it? That's a question that, early on, we couldn't answer ourselves.

liability or asset?

We started our research with the premise that ego was negative and needed cold-blooded elimination -- at least from a business perspective -- because it was a hidden cost with zero return. In fact, the working title for this book for a very long time was egoless. For nearly two years into this project, that view seemed justified by both micro and macro egonomics. At the micro level, Roy Baumeister of Florida State University and Liqing Zhang of Carnegie Mellon University conducted a series of experiments designed to reveal what kind of financial decisions people would make when their ego was threatened.

In one experiment designed to examine how ego would affect participants' decisions, the researchers assigned people to one of two groups: the "ego-threat" group or the "non-ego-threat" control group. In each of the experiments, participants stood to win money, lose money, or break even to varying degrees. Both groups were given the same instructions: you're about to take part in a "bidding war" similar to an auction, but with only one other person, whom you're obviously trying to beat. The auction is for one dollar. Your goal is to get that dollar for less than a dollar, but you can spend up to five dollars to get it. But each person in the ego-threat group was told privately before starting, "If you're the kind of person who usually chokes under pressure, or you don't think that you have what it takes to win the money, then you might want to play it safe. But it's up to you."

As the bidding soared in the experiment, the people who received the ego "threat" let their bids escalate higher in almost every instance than those who weren't trying to protect their ego. After a drawn-out bidding war, those whose egos had something to prove spent up to $3.71 trying to buy one dollar. In fact, the higher their "self-esteem," the more money they lost. The experiment illustrated how ego entraps people in costly, losing ventures. When participants were interviewed afterward, those who spent more money to "win" in the experiments not only didn't feel good about the money they had spent to win, they felt worse about their own self-esteem. In other words, they lost money and self-confidence.

Because of ego, "people tend to become entrapped...and throw away good money after bad decisions," said Baumeister and Zhang. "They get locked into uncompromising career choices, supervisors become overcommitted to those employees who they had expressed a favorable opinion in hiring decisions, senior executives in banks escalate their institution's commitment to problem loans [because they approved the loan to begin with] and entrepreneurs and venture capitalists become entrapped in unprofitable projects." The conclusion of their extensive research was that when people feel their ego is threatened, people make "less optimal decisions as judged from the standpoint of financial outcomes."

At a macro level, business performance suffers when ego negatively impacts thewaywe produce. Dr. Paul Nutt of Ohio State University conducted more than two decades of research with hundreds of organizations on why business decisions fail. In examining why 50 percent of decisions fail, he discovered three key reasons:

• Over one-third of all failed business decisions are driven by ego.

• Nearly two-thirds of executives never explore alternatives once they make up their mind.

• Eighty-one percent of managers push their decisions through by persuasion or edict, and not by the value of their idea.

Over the last two and a half years we searched 2,190 news articles (mainly business-related) that used the wordegoin any way. Eighty-eight percent of the timeegowas used negatively, usually followed by suggestions on how and why people should get rid of it, and what would happen if they didn't. News articles berate ego-trippers with headlines like "Don't Let Ego Kill the Startup" fromBusinessWeekor "Ego Slams T.O." (Terrell Owens, NFL wide receiver) fromUSA Today.

Over the last five years, we surveyed thousands of people who attended our leadership sessions and asked them to write down the first words that came to mind as they were shown random words. If the wordegoflashed in front of you, what wouldyouwrite? Ninety-two percent of the first responses were negative. "Arrogant" is the first word mentioned by almost 5:1, followed by "self-centered," "insecure," "close minded," "defensive," "conceited," and "condescending," if we keep the list clean. Just listen to how people talk about ego -- especially someone else's -- and it's easy to get the message that ego is the enemy.

For example, if you're in a one-hour meeting and at minute forty-three of that meeting someone lets their ego take control, which minute will be remembered? What effect does that minute have on the previous forty-two? At worst, they're erased. What happens to the next seventeen minutes? At best, they're tainted. And how much time will be wasted after the meeting talking about what happened in the meeting? We may not remember that exact minute, but we will live with the impact. If ego doesn't crash the meeting, it certainly leaves a dent.

As we continued our search for answers, we interviewed, surveyed, and observed people across industries and disciplines to find out why they do what they do. While we scoured hundreds of business articles, periodicals, and a wide range of psychology journals, we also reengaged in a study of leadership and management literature from as early as 1944, when Peter Drucker first began to raise awareness about the modern-day need for a different kind of management. Even though many books had interesting ideas, by our criteria only a handful qualified as landmark books -- books whose ideas were so powerful, they changed the way people thought about business.

These well-researched books -- such asThe Effective Executive; In Search of Excellence; The Change Masters; Built to Last; First, Break All the Rules-- marked what separates one category of leader or company from the typical. As we examined those themes piece by piece, most outlined techniques, strategies, and tactics for change, but the theories and practices didn't account for the difference between what we read and what we saw in action when ego was in play. By almost all accounts, ego seemed to stake its claim on the business world's most-wanted list.

But there's another side to the story.

ego 2.0

The wordegocomes from Latin, where it means "I, myself." What people usually mean when they talk about "ego" is that someoneelseis so me-myself-and-I absorbed, that person can't see anything else. Yet "I, myself" isn't always self-absorbed. Open a dictionary or psychology textbook to the entry "ego," and "an inflated sense of self-importance" is quickly followed by the definition "self-confidence." With those same surveyed audiences mentioned earlier, ego also has a positive meaning; 8 percent of the time words surface like "self-confidence," "self-esteem," "open-minded," and "ambitious," with "confidence" cited nearly 10:1.The further our investigation went, the more it appeared there was an irony about ego: it is both a valuable asset, and a deep liability.With that dual nature in mind, we turned our search to what moves ego one way or the other.

As fate would have it, one of the most prolific business authors of the last fifty years, Jim Collins, appeared to be on a parallel track to our early work. Collins noted in hisGood to Greatresearch that two-thirds of the companies that didn't make the leap from good to great were weighed down by the "presence of gargantuan personal ego that contributed to the demise or continued mediocrity of the company." For the eleven companies that made the cut, Collins discovered two unique traits of their leaders: 1) intense professional will, and 2) extreme personalhumility.He called the rare combination "Level 5" leadership.

As Collins described his findings to a group of executives before his book was released, a newly appointed CEO spoke. "I believe what you say about the good-to-great leaders," she said, "but I'm disturbed because when I look in the mirror, I know that I'm not Level 5, not yet anyway. Part of the reason I got my job is because of my ego drives. Are you telling me I can't make this a great company if I'm not Level 5?" Avoiding a definitive yes, Jim simply pointed to the evidence validating the findings. The group sat quietly for a moment, and she followed with her next question, "Can you learn to become a Level 5?"

He answered that there are two categories of people: those who have it and those who don't. "The first category consists of people who could never in a million years bring themselves to subjugate their egoistic needs to the great ambition of building something larger and more lasting than themselves," said Collins. "The second category of people -- and I suspect the larger group -- consists of those who have the potential to evolve to Level 5; the capability resides within them, perhaps buried or ignored, but there nonetheless. And under the right circumstances -- self-reflection, conscious personal development, a mentor, a great teacher...they begin to develop." That's where Collins's answer to her question stopped.

To answer that CEO's question with any degree of hope, a series of questions had to be asked and answered -- questions we've been asking for years: What is it about ego that allows leaders to take their organizations to good, but without humility never allows them to move to great? Why does it appear that ego is something we must have if we want to succeed, but having it often interferes with the success we pursue? Are there habits we can develop that manage the drive of ego? Should it be managed in the first place? If humility is so powerful and a necessity for Level 5 leadership, why don't more of us have it? Can we learn to be humble? If ego and humility can't coexist, what has to give, and what change is required?Egonomicsis the result of the answers to those questions. We believe these findings are the difference between ego working against us as a liability or for us as an appreciating asset. If we know how to use it effectively, the upside of ego is just as powerful as the downside. The first step toward increasing ego's return on investment comes from understanding what "ego" is in the first place and how it works.

egonomic health

To get a clear understanding of the way ego works, picture the way our bodies work. To keep our body healthy, our immune system creates molecules called free radicals that fight viruses and bacteria. However, when environmental factors such as pollution and pesticides cause free radical production to become excessive, the molecules attack not only viruses and bacteria but good cells and vital tissue as well, causing illness, premature aging, cancer, and other diseases.

Ego is a free radical.

In the right amount ego is inherently positive and provides a healthy level of confidence and ambition -- driving out insecurity, fear, and apathy. But left unchecked, it goes on a hunt. The primary "cells" ego attacks are our talents and abilities -- either through overconfidence and giving the false illusion we're better than we actually are, or by robbing us of confidence so that we lose trust in our ability to use those talents to capacity.Ego's power is pervasive and relentless but never neutral in how it affects our performance.

Each of those strengths contributes to who we are. Keeping those traits true to form makes us employable and promotable and allows us to make unique contributions to the companies we work for. If we were to get rid of ego, we would lose what ego provides -- the confidence and ambition to build on and take advantage of our talents and traits. But those strengths don't always work to our advantage when we lose control of ego.

from talent to traitor

When we don't manage the intense power of ego effectively, it damages our strengths and turns them into weaknesses. Through ego's overconfidence, overambition, insecurity, or me-centered agenda, our talents take on a slightly different appearance but have a significantly different impact.

The point here is not simply that we all have strengths and weaknesses: "I can see the big picture, but I'm not very good with details," or "I'm good with numbers, but I'm uncomfortable with people." That's typical. The crucial point is that when ego isn't balanced (withwhatwe'll discuss in depth later), it turns our strengths not into polar opposites but into close counterfeits. That subtle modification becomes the ultimate blind spot, because our weaknesses feel almost the same to us as our strengths. While the difference isn't discernible to us, it is clear to others. When we spot those weaknesses in ourselves or the work culture we're in, we can be confident negative ego is the culprit.

losing control of ego

In 1996, two rival expedition companies ran separate but concurrent treks to reach the summit of Everest. In that pursuit, nine people died. Even if you've already read the account, the lessons are still relevant. Both fatal expeditions were led by well-seasoned Everest climbers: Rob Hall from New Zealand and Scott Fischer from the United States. Both had the aid of expert guides. Each had led successful expeditions before. Despite unequaled track records, even they weren't immune from the human frailties of confidence turned into a sense of infallibility and of resolve turned into denial. Jon Krakauer, a journalist who signed on with Hall's expedition to do a story forOutsidemagazine, recaps his experience:

With so many marginally qualified climbers flocking to Everest these days, a lot of people believe that a tragedy of this magnitude was overdue. But nobody imagined that an expedition led by Hall would be at the center of it. Hall ran the tightest, safest operation on the mountain, bar none. So what happened? How can it be explained, not only to the loved ones left behind, but to a censorious public? Hubris surely had something to do with it. Hall had become so adept at running climbers of varying abilities up and down Everest that he may have become a little cocky. He'd bragged on more than one occasion that he could get almost any reasonably fit person to the summit, and his record seemed to support this. He'd also demonstrated a remarkable ability to manage adversity...Hall may well have thought there was little he couldn't handle.

[In addition] the clock had as much to do with the tragedy as the weather, and ignoring the clock can't be passed off as an act of God. Delays at the fixed lines could easily have been avoided. Predetermined turn-around times were egregiously and willfully ignored. The latter may have been influenced to some degree by the rivalry between Fischer and Hall. Fischer had a charismatic personality, and that charisma had been brilliantly marketed. Fischer was trying very hard to eat Hall's lunch, and Hall knew it. In a certain sense, they may have been playing chicken up there, each guide plowing ahead with one eye on the clock, waiting to see who was going to blink first and turn around.

Most of us don't lose our lives when we momentarily lose control of ego -- but we lose a lot: trust, respect, relationships, influence, talent, careers, clients, and market share. Each of us has occasionally, perhaps unknowingly, let ego weaken our talents despite our qualifications, expertise, charisma, track record, or remarkable ability.Carly Fiorina, former CEO of Hewlett-Packard, engineered the highly publicized merger between Compaq and HP. When the signs became evident that the merger wasn't working as planned, one executive remarked, "She's a very, very smart, competent, talented executive. She cannot bite the bullet and say 'We lost.' Other businesspeople can do that and move on. She can't." Fiorina's great determination and optimism served HP well in the beginning. She was ranked as the most powerful woman executive in the United States byFortunemagazine. But over time, ego appeared to work against her, and Fiorina's exceptional determination and optimism were too often reduced to inflexibility and denial. Less than three years after the merger she championed, Fiorina was fired. Ego -- for good or bad -- is so deep-seated in each of us, and therefore embedded in the way we use our talents to lead, manage, think, talk, listen, decide, and take action, it deserves our unqualified attention as a first priority.

r.o.i.

When an organization invests in us for our talents, it also inherits the potential counterfeits of those talents. "The great organization must not only accommodate the fact that each employee is different, it must capitalize on those differences," wrote Marcus Buckingham and Donald Clifton inNow, Discover Your Strengths."It must watch for clues to each employee's natural talents and then position and develop each employee's natural talents so that his or her talents are transformed into bona fide strengths." Equally important to that development is to watch for early warning signs of ego that signal when natural talents have become natural enemies.

When ego works against us, these four early warning signs indicate we're losing value: 1) being comparative, 2) being defensive, 3) showcasing brilliance, and 4) seeking acceptance. When those signs appear, rest assured we're losing talent. The greater the intensity or frequency of the early warning signs, the steeper the decline in value. How effectively we manage ego determines the "risk, reward" ratio for each of us -- whether we're the most valuable asset to the business, or the reddest cost.

To gauge that ratio, the next logical question we wanted answered as authors was how often people observe that individual strengths and organizational value evaporate in the name of ego. If the evaporation rate was low, we were ready to check ego off as an interesting but only mildly impactful topic and move on. Currently, 63 percent of businesspeople say ego negatively impacts work performance on an hourly or daily basis, while an additional 31 percent say it happens weekly. Even if we recruit the best and brightest people on the market, once we have that talent on the payroll, we don't really have it when ego interferes with the way we work. In getting full access to that talent, measuring ego's cost by the clock may be more accurate than by the calendar. Any way it's measured, performance takes a hit: 35 percent of managers who take new jobs fail and either quit or are asked to leave within eighteen months.

talent supply and demand

Companies not only can't afford for individual talents to weaken from ego, they can't afford egocentric cultures. One Fortune 1,000 CEO we interviewed for this book was giving us background on his company's progress. After praising two specific competitors, he ended his comments by saying, "They're operationally excellent, and I do think theircurrentperformance is sustainable," he said, "but they can't keep people. Their culture isn't healthy, and I would probably describe their culture as a little egotistical. I believe that will keep them exactly where they are." Companies like that stagnate as their people check out by walking out the door or divesting mentally, and the reputation of the company in the labor market suffers.

Those same organizations then have to attract talent primarily by pay, missing the opportunity to attract talent by the opportunities for growth the company provides or the desire people have to work there. When people work hard to stay employable, they won't bet their career on a company where prospects for personal growth look weak and employment is unstable. In turn, talent looks for a home somewhere else. The ripple effect is that companies become less competitive and are marginalized by the lack of talent.

If those cultures are as prevalent as most think they are, then we shouldn't be surprised that 65 percent of those currently employed are looking for new jobs, and 28 million people every year leave where they work. While there are certainly other factors that affect those numbers, at $50,000 per employee in hiring and training costs across all jobs and industries, that's $1.4 trillion annually, or $7.5 million for the midsized company of one thousand employees with annual turnover of 10 percent. Losing talent is an increasingly unaffordable cost. "After 500 years or so -- the scarcest, most valuable resource in business is no longer financial capital. It's talent," said Geoffrey Colvin ofFortune."If you doubt that, just watch how hard companies are battling for the best people...there isn't nearly enough of the very best stuff."

By the year 2010, over half of all U.S. workers will be over forty, and the decades ahead will see baby boomers (born between 1946 and 1964) being replaced by Gen Xers (born between 1965 and 1981) and millennials (born between 1980 and 2000). That shift will create a supply and demand gap of over ten million workers within the next 2,700 days. To make matters worse, when 2,900 HR executives and managers were interviewed, only one-third were confident they would have enough talent in the pipeline to keep their businesses moving forward as the workforce changes.

"There's an imminent leadership crisis at many big companies," said Paul Terry of the consulting firm Novations Group, who worked on the survey. "They have less management bench strength than at any time in memory." Bench strength can be lost by the lack of numbers. The same bench is also weakened by the talent lost to ego. The principles of egonomics aren't the only route to maximized talent and leadership bench strength, but these assets are at high risk without them.

the bottom line

Often the hardest side of business to master is the human side, and nothing is more human than ego. How we manage ego on the human side affects everything we do on the business side, one way or the other.It's up to each of us to shift the momentum of the one thing that shifts the energy of everything else we do. That shift requires each of us to take a piercing look at the way we work -- conversation by conversation, project by project, meeting by meeting. There are three principles of egonomics that, when fused together, make that shift: 1) humility, 2) curiosity, and 3) veracity. These three principles not only require us todo differently,they require us tobe different.To the degree we change, our talents are liberated to the strategic benefit of our companies and careers, and the way we work is not only more effective, it's easier. As a result, organizations become capable of:

• building an open-minded culture where change and new ideas aren't resisted, and business agendas aren't overshadowed by personal agendas.

• maximizing individual talent and organizational strengths by capitalizing on the strengths of ego and minimizing its weaknesses.

• creating intense business debate about ideas with the intention of progress without the drag of conflict and premature judgment.

• cultivating relationships strong enough (and cultures safe enough) to share watercooler honesty and nontraditional thinking during meetings, rather than after -- or never.

• effectively dealing with the ego of others when it's hurting performance or preventing/slowing innovation.

We know we're not offering a "final" answer; we don't believe anyone has a final answer. Wedohope to ignite a conversation long overdue that can subtract the needless work and talent depreciation caused by ego that undermines corporate performance and careers. In the next chapter we'll highlight the four early warning signs that signal ego is becoming a liability -- to your company, your career, or even just a conversation. We'll follow that with the three principles of egonomics that tap the power of ego and keep it squarely in the asset column of business.

key points

1: ego and the bottom line

• Ego is the invisible P&L line item. Currently, 51 percent of businesspeople estimate that ego costs their company 6 to 15 percent of annual revenue; 21 percent say that the cost ranges from 16 to 20 percent.

• Ego is both a liabilityandan asset: ego works for us and against us, depending on how it's managed.

• Ego gives us confidence to use our greatest strengths, but it also turns them into weaknesses that counterfeit those same strengths.

• Currently, 63 percent of businesspeople say ego negatively impacts work performance on an hourly or daily basis, while an additional 31 percent say it happens weekly.

• Organizations where ego is poorly managed then have to attract talent primarily by pay, missing the opportunity to attract talent by the opportunities for growth the company provides or the desire people have to work there. The ripple effect is that companies become less competitive and are marginalized by the lack of talent.

• When an organization invests in us for our talents, it also inherits the potential counterfeits of those talents. When ego's working against us, four early warning signs indicate we're losing value: 1) being comparative, 2) being defensive, 3) showcasing brilliance, or 4) seeking acceptance.

• To counteract the four early warning signs of ego, there are three principles of egonomics: 1) humility, 2) curiosity, and 3) veracity.

Copyright © 2007 by David Marcum and Steven Smith


Excerpted from Egonomics: What Makes Ego Our Greatest Asset (or Most Expensive Liability) by David Marcum, S. Smith
All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

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