Leadership Archives - Senior Executive

The ego has gotten a bad rap as of late, especially when it comes to business. You’ve probably heard a boss or a manager say some variation of the phrase “check your ego at the door,” and there are some who have even gone so far as to say that “ego is the enemy of good leadership.” These days, empathy has taken center stage, and with good reason. As organizations are still reeling from the effects of the Great Reshuffle and many workers call for their employers to be more human, empathy is having a moment.

As an organizational psychologist and empathy researcher, I don’t disagree with the heart of these arguments. It should be every leader’s worst nightmare to be described as an “egomaniac” who is unable or uninterested in hearing constructive feedback. But does that mean ego has no place in your business? Based on the years I’ve spent designing and developing leadership programs for global brands, I would argue that some ego is necessary to be the best leader you can be and run a successful business. Let me explain.

What Is the ‘Ego’ Anyway?

In the simplest terms, “ego” means “I” or “the self.” When we say someone “has a big ego,” we mean that they think too highly of themselves, or they’re too focused on themselves and not enough on those around them. But the ego isn’t necessarily a villain.

I often tell my clients to think of the ego like a bouncer at a club. If the ego had a job description its No. 1 responsibility would be to protect us from pain and embarrassment, which is a good thing, but it’s also the source of the ego’s bad reputation. Important leadership traits like self-awareness and being open to constructive criticism can be uncomfortable, painful and embarrassing. In these scenarios, it’s important that you’re able to recognize your ego and tell it to take lunch so you can actually absorb this feedback and grow as an individual and as a business leader.

But let’s consider an example of how our egos work to protect us can ultimately be a good thing. Take Jennifer Lopez’s recent documentary, Halftime. In the film, JLo discusses the onslaught of criticism she’s faced throughout her career, about her looks, her voice, her personality and so much more. Had she internalized all that feedback and given all of it the same weight, she wouldn’t be the actor, singer or performer she is today. Thanks to the ego, JLo was able to cut through the noise and apply the feedback that could actually help her grow—and ignore the rest.

The ego helps us draw those necessary boundaries so that we don’t take on every opinion or emotion as if they were our own, which can be a good thing. Your ego encourages you to trust yourself, your experiences and your instincts, even when others disagree. Your ego ensures that the empathy you show others is balanced with compassion for yourself because you’re worthy of care and respect, too. The ego isn’t empathy’s archnemesis, it’s empathy’s powerful sidekick.

“Finding the balance between empathy and ego is the key to exceptional leadership.”

– Payal Beri

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Compassion for Self, Empathy for Others

Finding the balance between empathy and ego is the key to exceptional leadership. It can’t be all ego all the time, just like it can’t be all empathy all the time. Striking the right balance will look different for each leader, each organization and each situation, but let’s consider an example of what this balance looks like in action.

In May 2020, Airbnb made the difficult decision to lay off a significant portion of its workforce as the company struggled in the early days of the pandemic. Ego is inherent in any decision to cut ties with workers: You, the leader, are making a decision to move the company forward, despite the negative impact that decision may have on the livelihood of many colleagues.

But rather than make the announcement over a Zoom call and wash his hands of it (all ego), Airbnb’s CEO Brian Chesky wrote an open letter that clearly walked employees through the decision-making process before he outlined the generous severance package each employee will receive (ego and empathy). Chesky and the Airbnb team had to make a tough call, but by balancing that call with empathy, I would bet that Airbnb was able to maintain positive relationships with those employees—and potentially gained some loyal customers in the process.

Empathy Is a Superpower

In order to achieve your goals, both for your business and your career, you’ll have to strike the right balance of empathy and ego. Don’t think so highly of yourself that you can never be wrong. But don’t become so invested in other people’s emotions that you compromise your values and lose your purpose.

I truly believe that empathy is a superpower. Being able to tap into how others are feeling, consider other points of view and give them weight aren’t the skills of an average leader. But if you allow empathy to overpower you at every turn, you’ll quickly find you aren’t the one running your business anymore. Empathy is a superpower, but don’t let it become your kryptonite.

Nintendo DS. Wii. Nintendo Switch. Each of these legendary systems revolutionized the gaming industry at the time of its release. Integral to their success was former Nintendo of America COO and president Reggie Fils-Aimé who recently ended his 15-year tenure with the iconic brand. In his recently published memoir, Disrupting the Game, Fils-Aimé shares stories, insights and lessons from his life and career that every executive should devour if they aspire to lead a global brand with a cherished role in the lives of its consumers. 

In a conversation with Senior Executive Media, Fils-Aimé discussed disrupting industries, having the courage to make difficult business decisions and the importance of measuring organizational health. Read on for edited excerpts from our exclusive interview.

Senior Executive Media: Your book, in part, focuses on disruption. While you were at Nintendo, what were the forces that changed the video game industry? What factors made disrupting a priority? 

Reggie Fils-Aimé: So the video game industry in the early 2000s was very different than the video game industry of today. At that time, only about one out of every three people played video games here in the United States, and the number was even lower once you got out of Japan and the United States. Nintendo believed that the industry needed to do something completely different in order to grow, in order to attract people who did not traditionally play video games. Between 2000 and 2003, the industry was just doing the same remakes of the same old franchises. 

We saw a need for new and innovative games, and we focused on unmet consumer needs. I’ll give you an example. We launched a product called the Wii U, which in fairness, was not successful in the marketplace because the messaging for it was complicated. But we heard from consumers that a key aspect of the system was highly desirable – the aspect where they could play their video games on a big screen and then take that with them elsewhere in the household and continue playing when someone else wanted to watch something on that beautiful big-screen TV.

The problem with the Wii U was that if you got more than 30 feet away from the console, the connection would be lost. But we identified that key insight and used that to develop our next system, what became the Nintendo Switch, which right now is the best-selling system in the industry, and is now Nintendo’s best-selling home console in its history.

Headshot of Reggie Fils-Aimé

“As a senior leader in an organization, you need to spend a significant amount of your time measuring the health of the organization and taking action based on what the data is telling you.”

– Reggie Fils-Aimé

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Senior Executive Media: Disruption is hard. Tell us about a big challenge you’ve encountered – and how you responded.

Reggie Fils-Aimé: Well, you know, in my business past, I’ve had many failures out in the marketplace. And the fact is, sometimes they can’t be fully turned around, and the example I’ll use is outside of my Nintendo experience. It’s back when I was in the restaurant industry, working for Pizza Hut. 

So this was in the early 1990s. Similar to what we’re going into [in 2022], there were recessionary pressures in the marketplace. The brand Little Caesars was doing exceptionally well because their proposition was a lot of food for a low price. Didn’t matter how tasty the food was, they were meeting a key consumer need at the time. Pizza Hut saw this as a key business threat, and we developed our own value pizza offering called Bigfoot Pizza. Its proposition was a rectangular two-foot by one-foot pizza sold at a similar price point to Little Caesars – plus, we offered delivery, which Little Caesars did not do.

This became a billion-dollar business, highly successful. I was in charge of testing and then rolling out this initiative. But the issue was that because we were using inferior ingredients—the cheese was not the same cheese that was used on the base pizza product, the dough was different—the consumer was noticing this difference [and began] associating it not just with Bigfoot Pizza, but with the entire brand.

In this case, there was no solution to the problem, meaning we couldn’t make the Bigfoot Pizza better because that would drive more cost that would make the entire proposition unprofitable and untenable. So I had to make the difficult decision to recommend that we shut down this business—that we shut down a billion-dollar business. When innovation is working in the marketplace, but there are other factors that make it untenable, as a leader, you need to make the hard decision, the hard recommendations, to shut a business down or pivot to other initiatives in order for the overall business to be successful for the long term.

Senior Executive Media: You deliver a lot of leadership lessons from Nintendo in your most recent book. Can you share one or two of the really big ones and how you learned them?

Reggie Fils-Aimé: One of the big leadership qualities that I would highlight is that leaders have to make those big, tough decisions because, in well-run organizations, easier decisions are made lower in the organization. So it’s those biggest, toughest decisions that come to the leaders. And so you need to have courage in your decision-making. You need to thoroughly think through the issues and the options, and then you need to make the tough call.

I mentioned how Nintendo was on this path: We needed to bring gaming to a mass market audience. We did that initially with a product called the Nintendo DS, but then we did it again with a product called the Wii. You might recall this product, it used a one-handed controller that had gyroscopic capabilities. So you can play a tennis game by swinging your hand as if you were swinging a racket. Or you could play a baseball game as if you were holding a bat and trying to hit that home run. And there was one key piece of software that really brought the system to life. It was a piece of software called Wii Sports. 

During its development phase, when myself and all of the developers in Japan were working on this product, we knew its potential. My push was to include Wii Sports as part of the overall proposition for Wii hardware – meaning that when you bought the hardware, Wii Sports would be included in that box as a piece of playable software. This was a very controversial decision because the software could be sold for $50 per unit, generating significant profit. And so my recommendation would be foregoing significant revenue and profit. But in return, we would have a unifying experience for consumers who bought the hardware, having this wonderful collection of games to play.

In the end, the decision was made to include Wii Sports all through the Americas, which I was responsible for, as well as for Europe. In the Japan home market, it was sold as standalone software, which provided a wonderful A/B test. And in the Americas and in Europe, we saw consumers playing Wii Sports in retirement homes, we saw consumers playing Wii Sports on cruise ships, we saw consumers playing Wii Sports in bars – it was a shared communal experience. That really didn’t happen in the Japan market. And my market, in particular, had the best overall results for Wii during its lifetime. So that was the decision and again an example of the principle of courage and decision-making.

Senior Executive Media: You were a chief operating officer for many years. What’s a metric that executives should be measuring that they may not think to measure?

Reggie Fils-Aimé: I don’t know that executives don’t think to measure this but measuring it is hard. And that is measuring the health of your organization. [In order to measure it, you’ll need to] dissect all of the elements of your culture and then use the data to make decisions on how you want to shape your culture. I’ll give you an example.

When I joined Nintendo, we really didn’t measure our culture. We had standard HR metrics, you know – transitions, terminations, things of that nature. But we weren’t measuring the culture. As I became the president and chief operating officer… what we focused on were behaviors—behaviors around team building, behaviors around taking initiative, [behaviors around] communication, behaviors of developing the organization. And we ended up identifying about eight key behaviors that were important to our culture. As a senior leader in an organization, you need to spend a significant amount of your time measuring the health of the organization and taking action based on what the data is telling you.

Senior Executive Media: That can be a real challenge. What was your approach to measuring these behaviors?  

Reggie Fils-Aimé: We did an annual survey, and we were fortunate – we literally had over 95% participation in our organization, which is a huge number. We not only measured against ourselves, our past performance, but we measured ourselves against other high-performing organizations. But the other thing that I personally did was I met with individuals and teams. That was probably 80% of my personal schedule, meaning I made it a priority to spend time with my staff, the key teams and the top leaders within my organization. I made it a personal priority, not only to check in on the projects but to check in on the people, to make sure that, individually and as a group, the culture and the health of the organization were high. So it’s a combination of hard data, as well as softer data and insights, to have a sense of how your organization is doing.