egonomics: by David Marcum & Steven Smith

Have you seen first hand how ego gets in the way of performance, results, and good decisions?

You're not alone. For the first time, a couple of consultants have measured the costs of ego to the bottom line.

David Marcum and Steven Smith have just published egonomics: What Makes Ego Our Greatest Asset (or Most Expensive Liability), Fireside, (2007).

I love the name egonomics - what great branding by combining ego (notice the small "e"...) with economics, a trend started with the book Freakonomics.

If you're a coach or consultant working with organizations, you've seen the detrimental affects of ego.

The Costs of Ego

"Ego is the invisible line item on every company's profit and loss statement."
--David Marcum and Steven Smith in egonomics: What Makes Ego Our Greatest Asset (or Most Expensive Liability), Fireside, 2007

Fifty-three percent of businesspeople estimate ego costs their company 6 to 15 percent of annual revenue; 21 percent say this cost ranges from 16 to 20 percent.

That's somewhat astonishing, considering "ego" is difficult to measure by any standards. But even if ego accounts for only 6 percent of revenue, the annual "cost of ego" would translate to nearly $1.1 billion to the average Fortune 500 company -- roughly equal to the average annual profit of these same companies.

What are we talking about here? Most people associate "ego" with words like "arrogant,"
"self-centered," "closed-minded," "defensive" and "conceited."

Big egos invade every team conversation, boardroom debate, marketing plan, client interaction, contract negotiation, employment interview and performance review. There's no question it gets in the way and is a major cause of bad decision-making.

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