What Makes Ego Our Greatest Asset
What Makes Ego Our Greatest Asset - 
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Doug Krizner: In 1923, Sigmund Freud introduced his concept of ego. Today ego has many meanings: one's self-esteem or an inflated sense of self-worth. And in business, as in life, the role of ego has huge impact. Let's bring in Steve Smith, he's co-author of a new book Egonomics.
Steve, the term ego seems to have many more negative connotations.

Steve Smith: When we first started Doug, the working title for the project for two years was Egoless, and the further we got into it, the more we realized that it wasn't just a negative thing, it was how we managed it too often that was a negative thing.

Krizner: Well how do we know when it's out of control?

Smith: Well that's what we were interested to know because you can have too much or not enough ego. There are four early warning signs that will let you know that you're off balance and the first one is that you're being defensive. It's not about the best idea winning any more, it's about you being the person with the idea. The second one is we get too competitive and now we look at other people as competitors. They'll take disagreement with their ideas personally or as a culture we get hyperaware about what our competitor's doing and then it causes unneeded anxiety around what we're not doing. The third warning sign is what we call showcasing your expertise or brilliance, which by definition shuts other people down because you're trying to dominate the conversation with it and you lose diversity. And then the fourth one then Doug is seeking acceptance.

Krizner: So give me some examples, Steve, on how business has paid the price for ego gone out of control.

Smith: Well we did a survey of about 1,200 people and asked them "What has ego cost your company?" Over 50 percent said it's costing us between 6 and 10 percent of our annual revenue.

Krizner: Give us some examples of business leaders you regard as being well-balanced on that fulcrum of humility.

Smith: One of the people that we point to in the book, and I think some will be surprised, is Steve Jobs. Because he started as a person who was very egotistical and after about seven or eight years of leading Apple, his ego got so out of his own control that the board of directors actually kicked him out as president of the company. So he goes through this process of working with Pixar and starting NeXT and so forth and he said 'over that period of time I got kicked in the head.' He said 'I had to take some very rough medicine' and he said 'but I guess the patient needed it.' And he said, 'If I had not been kicked around for a few years and learned humility, I don't think today we'd have the iPod, iTunes or Pixar would not be here today.'

Krizner: How dramatically can a company be turned around if at one point it was skewed a little more on the side of ego that tends to create a liability?

Smith: We have one example that was Kimball International, they just weren't doing very well. And the level of humility that changed them was their level of willingness to let go of what they had always done well. They had always been good at paper production, and when Darwin Smith walked in and said 'were going to sell the mills,' the board was like 'you're crazy, you're insane.' But he had the humility to say, 'look we have to be open-minded enough that what has worked for us in the past is not going to work for us in the future.'

Krizner: Steve Smith is co-author of Egonomics. Steve, congratulations on the book and thanks so much for joining us.

Smith: Doug, thanks for having me, I appreciate the time.