The topic of this interview is one of paramount importance to anyone who wants to change the world: Ego. Too much? Too little? How much is just enough?

1. Question: Which comes first: big ego or success? That is, does it take a big ego to be successful or do you start with a normal ego, somehow achieve success, and then get a big ego?

Answer: First, there’s a vital difference between “big ego” and big ambition. Successful people usually start with big ambition/big ideas, and a “normal” or healthy ego. That combination of ambition, ideas, and healthy ego drives their success. If they’re not careful though, their success creates the illusion that it was them alone that achieved that success. And the more publicly visible they are, the more they believe the headlines that attribute their success to just them.

Once they assign all of that success to themselves, their ego whispers how great they are, and anything else they think or do will be equally great. That’s when healthy ego becomes “big” ego, and it’s hard to convince ourselves it’s not just us because our self-written history reinforces that we’re the one that did it.

2. Question: The opening line of your book is, “Ego is the invisible line item on every company’s profit and loss statement.” Why is it invisible?

Answer: Because it hasn’t been measured, and yet people know the costs are there. Over half of all business people estimate ego costs their company 6% to 15% of annual revenue; many believe that estimate is too conservative. But even if ego were only costing 6% of revenue, the annual cost of ego would be nearly $1.1 billion to the average Fortune 500 company.

The reason ego stays invisible is because we don’t talk about it — we talk about everything else — like numbers. It’s also easier to talk about lighter topics like “communication,” “decision-making,” “leadership,” or “teamwork.” But the most sensitive, yet most powerful topic, is ego.

We think people should look at management capabilities in the same way Dmitri Mendeleev looked at the periodic table of elements. He was the first person to organize the elements by weight — lightest to heaviest. The same thing is true in business — each capability has different weights; some lighter, some heavier. The “atomic weight” of the ability to manage the human element of ego is greater than all of them.

There are other important elements on the leadership “table,” but ego has the most weight — in large part because of the affect it has on everything else. And yet it’s the most avoided. People have been afraid to talk about ego because they don’t understand how it works, especially at work. And the conversations they do have about it are usually at the water cooler and in private. More importantly, it’s almost always seen as someone else’s problem, and that needs to change.

3. Question: What are the telltale signs of an over-inflated ego?

Answer: First, let’s be clear that most people — 99% of us — don’t have over-inflated egos all the time; just some of the time. When ego over inflates, there are four early warning signs:\

1. Being defensive: defending ideas turns into being defensive.
2. Being comparative: being too competitive actually makes you less competitive.
3. Seeking acceptance: desiring respect and recognition interferes with success.
4. Showcasing brilliance: ideas can be overshadowed by your own intelligence and talent.

Let’s take just one that gets a lot of people in business, and usually triggers the other three warning signs, being comparative or too competitive. Here are some things you can watch for.

• Seeing someone you work with as a rival and think about how to “beat” them.
• Taking disagreement with your ideas personally.
• Compulsively following a competitors “lead” so they’re not doing anything you’re not.
• Criticizing competitor’s strategies and prematurely discard them as irrelevant.
• Believing you don’t ever deserve to lose; a game, a conversation, a debate, a promotion, a raise, etc., and you’re not gracious in defeat.
• Disagreeing with someone’s point just because they’re the one who said it.
• Feeling worse about where you are when you see what others achieve.

4. Question: Then what is a “healthy” ego?

Answer: Genuine confidence; confidence that doesn’t have to exert itself to “prove” its confidence. Healthy ego keeps us from thinking too highly or too little of ourselves and reminds us how far we have come while at the same time helping us see how far short we are of what we can be. But to understand what healthy ego is, you have to understand the relationship between ego and humility. For most people, tradition holds that the opposite of excessive ego is humility, when in fact having too little ego is just as dangerous and unproductive as having too much.

When we strike the right balance between ego and humility, we’re genuinely confident. We call that the “ego equilibrium” in the book. But since there’s a natural tendency to deviate from the equilibrium, when we move just right or left of center, we get false confidence, and ego manages us rather than the other way around. As a result, our strengths morph into counterfeit weaknesses, like someone who’s passionate now becomes overzealous, or if we’re strong-willed, now we become inflexible. We think it’s the same thing, but it’s not and everyone around us notices the difference.

Imagine that the spectrum of ego is magnetic, with the strongest pull coming from the two ends. At the center, the magnetic pull on either side has little effect on us. But the closer we move to the extremes, the more the magnetic pull affects us and the harder it is to make our way back. The longer we stay off-center, the more comfortable we become being off-center. If we don’t quickly recover, we’re more likely to develop bad ego habits.

5. Question: How can humility survive in a capitalistic, “dog-eat-dog” market?

Answer: That’s the cool thing we discovered in our work, and the perceived “weakness” of humility is the assumption even in a question like this one. Humility is the only real way to become great, everything else being equal. As a trait, humility is the point of equilibrium between too much ego and not enough. Humility has a reputation of being the polar opposite of excessive ego.

In fact, the exact opposite of excessive ego is no confidence at all. Humility provides the crucial balance between the two extremes. When Jim Collins did his work in the book “Good to Great,” humility was one of only two characteristics he discovered that separated leaders capable of leading good — even very good — performing companies, and leaders who made their companies great performers. And all of those leaders who lifted their companies to greatness and sustained them for over 15 years did it in the same dog-eat-dog world everyone else was in. Humility was custom made for the dog-eat-dog business world.

6. Question: Is there such a thing as not enough ego?

Answer: Definitely. In fact, more people and company cultures suffer from this than you might think. We call it the “Junior High” side of ego; that we need the approval and acceptance of others so much that we make decisions we wouldn’t make if we felt more genuinely confident about who we are.

That lack of enough ego puts others in the driver’s seat of our self-confidence, and people start to shape their thoughts and actions to what they believe will be endorsed by others; they become “pleasers” and don’t offer what’s on their minds. Companies then get “good” ideas from people — but sadly, not their best. Ironically, when they don’t get our best, they’re less likely to give us the acceptance we deserve.

When our desire for acceptance is healthy, acceptance and respect are still important to us, but they aren’t our solitary goal. We can want acceptance without letting it affect our self-worth or authenticity. When our desire for recognition and respect is balanced, we draw a clear distinction between who we are and what we do.

7. Question: What is your analysis of Steve Jobs?

Answer: Steve’s gone through a metamorphosis in how he works. He’s always been exceptionally gifted as a creator and designer, but he used those gifts in a way that drove people away from his company and minimized the talent and creative IQ of the people around him. Once he was kicked out of Apple, life began to humble him through his own health challenges, his reputation, losing what he created, etc. Interestingly, Steve came out of that time of his life with a healthier ego, because life had humbled him and he accepted the lessons.

At his commencement speech at Stanford a couple of years ago he said, “I’m pretty sure none of this [NeXT, Pixar, his return to Apple, the iPod and iTunes] would have happened if I hadn’t been fired from Apple. It was awful-tasting medicine, but I guess the patient needed it.”

Humility is a powerful antidote to unhealthy ego, and we can either humble ourselves, or wait for life to humble us. There was a Fortune cover that had Steve on the cover, but the two-page spread inside had six or seven people sitting next to him. We thought that picture said it all; he’s no longer in this by himself, and it appears that he recognizes that. As a result, he’s a much better leader.

8. Question: How does an egotist “reform” himself or herself?

Answer: Therapy! The truth is that true egotists rarely reform. The book “egonomics” isn’t for the small percentage of egotists in the population who need therapy. In terms of reformation, we all need some. Maybe it’s the way we present our ideas, defend our positions, think about ourselves, share our talent and expertise, motivate people, etc. But the first step in any kind of reformation is awareness because where there is no awareness, there is no choice.

And that awareness can’t only come from ourselves. Get feedback, ask people how you’re doing, and watch for any of the four early warning signs.

Guy Kawasaki is a managing director of Garage Technology Ventures, an early-stage venture capital firm and a columnist for Forbes.com. Previously, he was an Apple Fellow at Apple Computer Inc., where he was one of the individuals responsible for the success of the Macintosh computer. He is the author of eight books, including his most recent, The Art of the Start, which can be found at www.guykawasaki.com.