The Hindu Business Line : Ego, an invisible line item on company P&L

Generally, ‘ego’ is a four-letter word that merits banishment in business and social contexts. Or, so we have been taught. Wait, ego can be your greatest asset too, say David Marcum and Steven Smith in ‘Egonomics’ ( www.landmarkonthenet.com).

“Despite the negative reputation of ego, it isn’t purely a loss,” they argue. “On the profit side, ego sparks the drive to invent and achieve, and nerve to try something new, and the tenacity to conquer setbacks that inevitably come.”

In contrast, ego-deficit may not translate as a virtue, but is a widespread malaise, manifesting as ‘insecurity, hollow participation, and apathy that paralyse cultures and leaders.’

When you manage ego wisely, you get the upside it delivers followed by strong returns, the authors assure. “But when that intense, persistent force inside manages us, companies suffer real economic losses.” It should be alarming to realise that ego is an invisible line item on every company’s P&L (profit and loss statement), costing 6 to 15 per cent of annual revenue.

A research cited in the book is of Dr Paul Nutt of Ohio State University. Exploring the ‘why’ of business decision failures, 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; and 81 per cent of managers push their decisions through by persuasion or edict, and not by the value of their idea.”

Using the analogy of human body Marcum and Smith explain how ego works. “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 ageing, cancer, and other diseases.”

Much like the free radical, the right amount of ego is inherently positive, the authors observe. “But left unchecked, it goes on a hunt,” turning from being a talent to a traitor!

“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.”

Shockingly, 63 per cent of those surveyed by the authors concede that ego negatively impacts work performance on an hourly or daily basis; “an additional 31 per cent 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, declare Marcum and Smith. “In getting full access to that talent, measuring ego’s cost by the clock may be more accurate than by the calendar,” they suggest.

And when ego does hit, performance takes a dip; which perhaps explains why ‘35 per cent of managers who take new jobs fail and either quit or are asked to leave within 18 months.’

The bottom line propounded in the book is that managing human ego is ‘the hardest side of business to master.’ Take a piercing look, therefore, at the way you work – be it during conversations, projects, or meetings – and shift ego’s power from liability to asset, the authors advise.

Three principles they lay down to help you achieve the shift are humility, curiosity, and veracity. “These three principles not only require us to do differently, they require us to be different.”

Profound messages.

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