LeaderShip Edge

October 2007 :: Egonomics

“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.”

- David Marcum + Steven Smith from their book “Egonomics”

You have no idea how it happened.

One day, there you were on top of it all. The next thing you know, both you and your organization are irrelevant. You have become the organizational equivalent of Latin.

You gather your team together in a desperate effort to figure out what happened. One by one, now that they have nothing to lose, they open up. They tell you your own arrogance and overconfidence led the organization to stray from its path. They tell you that, essentially, you are the reason the organization has fallen over the cliff. They tell you how you ignored the warning signs, how you vetoed their decisions and replaced them with your own. They tell you how your charisma blinded the employee population until it was too late.

They go on and on, and you begin to get the message. You are an egomaniac.

The Fact is trust, candour, and alignment are only a pipe dream in many organizations. Far too often a leader, driven by ego, creates a workplace that is dysfunctional, ineffective, and ultimately heading down the wrong path.

The Problem is everyone in these types of organizations is a co-conspirator by allowing this type of behaviour to persist. Nobody questions the logic behind bad decisions, nor are they willing to fight for their own point of view.

The Outcome is many organizations are full of thick-walled silos, unhealthy disputes, and bad decisions based predominantly on subjective grounds.

The Solution is -To understand that your organization’s egonomics are out of balance.

Egos and your P&L

It’s amazing there’s any room left for ego in the modern workplace. However, according to recent research, there is still plenty to go around.

• Over 1/3rd of all failed business decisions are driven by ego.
• Nearly 2/3rds of executives never explore alternatives once they make up their mind.
• 81% of managers push their decisions through by persuasion or edict, and not by the value of their idea.

Ego. It’s there - in fact, it’s everywhere.

They key is knowing it, and then learning how to manage it effectively.

Ego is not totally bad. It does have benefits. It drives ambition, instils confidence, and builds courage. In order to be successful, and ultimately unstoppable, organizations must have a certain amount of ego.

The problem arises when the organization’s ego (which can be driven by a single person in a position of power) gets out of control. When this happens, the organization starts to ignore hard data, distort market realities, and ultimately make bad decisions.

The Root Cause

Does this sound like your organization:

• Recognized market leader
• Double-digit market share lead on your competitors
• Award-winning products + services

If so, you’re likely on the verge of developing an ego. You may ask “how can that be?”. The reality is, as organizations become successful, they fall victim to forgetting the very virtues that helped them get to where they are. According to Marcum and Smith, the key factors to continual success are:

Humility - striking the crucial balance between too much ego, and not enough

Curiosity - blending free thinking and clear purpose without bias

Veracity - removing the fear of giving or getting feedback to produce true honesty.

The Blind Eye

Marcum and Smith outline a series of “early warning signs” that alert an individual or organization that they are developing an ego. They include competitiveness, showcasing brilliance, and seeking acceptance. The truth is, most organizations should take a lesson from Henry Ford:

“The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time.”

If your organization can develop habits using humility, curiosity, and veracity, and focus their efforts on the betterment of their organization, success and respect are sure to follow.

In Our Opinion
The Beacon Group’s Keys to Managing your Organization’s Egonomics

Constant Crisis - Organizations who believe, as Intel Chairman Andy Grove put it, “only the paranoid survive” won’t have time to develop an ego. By refusing to rest on your laurels, your organization will maintain a constant level of evolution, and, ultimately, will succeed.

Social Networks - Having a group of “friendly consultants” helps. Just as your spouse would tell you not to wear a particular outfit, you should maintain a wide-array of friends and colleagues who are willing to give you unsolicited, candid feedback on your operations.

Whistle Blowers - Egomaniacs can be scary. Therefore, in order to ensure that employees within your organization can speak up, and present objective data, you must ensure that there are concrete paths that allow this vital process to take place. This must be allowed to happen without the fear of reprisal and, ultimately, a sense of “thanks for speaking up”.