Stories abound of famous entrepreneurs who are known
to have huge egos.
How can we forget those reported tantrums of Steve
Jobs, oftentimes terrorizing his executives, if they failed to do as he pleased?
Yet Apple, under Jobs’ watch, went to become the most valuable company in the
world.
Or the centralized, autocratic ways that can be
found in the management style of Donald Trump. His extravagant lifestyle and
outspoken manner have made him a celebrity for years, a status magnified by the
success of his NBC reality show, The
Apprentice.
Does it follow then that when the guy on top has a
big ego, business is good?
In many instances, yes it is, but not in all.
In
the case of Trump, along with his business triumphs and popularity, he had instances
of filing for bankruptcies because he invested in his own ego. “When
your wardrobe malfunctions in front of 10,000 people, make it part of your act”,
he said after the failure of Trump
Airlines, Trump Vodka, Trump Mortgage, Trump Casinos.
And then there are others who turned away great
business opportunities of a lifetime because their egos got in the way.
When William
Orton, President of Western Union, was invited Alexander Graham Bell to buy the
patent for the telephone for $100,000, he turned it down saying: Mr. Bell, after careful consideration of your
invention, while it is a very interesting novelty, we have come to the
conclusion it has no commercial possibilities…What use could this company have
for an electrical toy?”
Robert
Uihlein, CEO of Schlitz Brewing Company, discovered a way to cut brewing time
from 40 days to 15…to replace most of the barley malt with corn syrup…and to
switch from stabilizer to another to circumvent new laws and as a strategy to
outsell and outsmart its competitor, Anheuser-Busch. The beer with the new formulation was
cheaper, more profitable and got to the market faster. The profits increased until customers noticed
the terrible taste of the beer. To top
it all, it broke down quickly to form into sediment that looked like
mucous. The famous last words about
Schlitz Beer was said in 1981 by a former mayor of Milwaukee: “How could that big of a company go under so fast?”
Steve Jobs, while bragging to former
Apple CEO John Scully about the Apple Liza Computer in 1983 said: “We’re going to blow IBM away. There’s nothing they can do when this
computer comes out.” The Liza did poorly
with only 100,000 units sold.
The founders of WebVan, when they
launched their online grocery idea, overlooked some fundamentals of running a
grocery business. Their attitude about bringing in those with knowledge of the
industry was: “We’re trying to recreate
this industry so we don’t want to tie ourselves down to the old ideas…”
“Success
breeds lots of arrogance. Webvan was Exhibit A of how arrogance can result in a
high-profile failure.” wrote Eric Jackson, contributor at The Street.
There are more amusing and even sad
examples to the list of businesses and their executives whose egos have sent
them crashing down from the comfort of their executive suites down Failure
Avenue.
Business history is full of
these.
But is ego really that bad? Looking at it in a positive way, I believe ego is the spark that made many entrepreneurs dream big dreams and made it.
There’s just got to be a way to rein those who cannot see the difference between positive self-esteem and arrogance.
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