How Leadership Self-Awareness Improves the Bottom Line
Whether you're a business owner or a leader for a company, financial performance is a measure of effectiveness. But how do you improve the bottom line amid uncertainty and a growing talent crisis? And how can you effectively lead when trust in leadership is declining? One of the best things you can do is invest in developing yourself and your team. When you know yourself, you have the insight necessary to recognize leadership bad habits and make transformational changes that deliver proven results.
What is leadership self-awareness?
Self-awareness means knowing yourself so that you are able to see yourself objectively, being aware of similarities and differences from others, and understanding the perspectives from which you see others and the world.
Unfortunately, self-awareness is rare in leaders. According to a global study by the Hay Group involving 17,000 leaders, less than one in five women and one in 20 men have a sense of self-awareness.
“To know yourself, you must sacrifice the illusion that you already do.” Vironika Tugaleva
Benefits of Self-Awareness
The importance of self-awareness for achieving success and significance is not new. As early as 300 BC, ancient Greek philosophers acknowledged its importance. However, just recently the positive connection between self-awareness and improved company earnings was established by Korn Ferry.
A study of 486 companies over 30 months demonstrated that organizations with a higher percentage of self-aware leaders outperformed organizations with a lower rate. Poor-performing businesses had 20 percent more leaders with blind spots than high-performing businesses.
The researched benefits of knowing yourself are numerous beyond improving a business's bottom line. Some of these include improved leadership relationships, self-control, better decision-making, and life satisfaction.
In today's increasingly complex and culturally-diverse workplace, leaders that are able to perceive, assess, and regulate their own, and others' emotions accurately are able to better promote unity and team morale. Studies have demonstrated that followers perceive leaders with a heightened emotional intelligence as being successful and effective leaders.
Increased awareness may enable leaders to create shared emotional experiences that enhance personal and follower growth and well-being. Leaders are better prepared to adapt appropriately in a given situation when they possess a heightened self-awareness.
Self-awareness in leadership
We all see the world from our unique point of view. We tell ourselves stories about our strengths and areas where we need to be better as well as what is or is not good leadership. Our patterns of behavior are shaped by past experiences and the words used to describe our actions.
With good intentions, we set out to lead as best as possible. Then life happens, and for most of us, we realize we have blind spots and distortions that jeopardize our goals.
Consider the passenger-side rearview mirror on a car. The required safety warning on the mirror states that objects in the mirror are closer than they appear. Also, in driver's education, we learn the mirror has blind spots.
Distortions and blind spots can be hazardous to our well-being if what is seen and not seen is not interpreted within the proper context. Leaders can make bad decisions without understanding the wisdom of knowing their distortions and blind spots.
How to become more self-aware
The higher you move within any organization, the less objective and the less in general feedback you tend to receive. This makes knowing yourself even more critical.
The last thing an executive needs in today's demanding workplace is someone or something telling them what they already know. The better the quality of the feedback you receive, the better the decisions you can make.
Leadership is a relationship, and it is vital to know what others think. When we only consider ourselves, we have an incomplete understanding.
Executive coaching combined with leadership assessments helps reveal deep insights into areas that with attention lead to enhanced potential. Research supports that a coach's timely and appropriate use of leadership 360 assessments leads to improved personal awareness and organizational outcomes.
A 360 leadership assessment is a type of multi-rater instrument that collects feedback from multiple directions relative to the leader's position within an organization. Typically the questions in the 360 assessment are focused on leadership performance, skills, and contributions.
While 360-degree feedback effectively improves leadership skills across all cultures, it is most effective in cultures with low power distance and individualistic values such as Germany, the Netherlands, the United Kingdom, and the United States.
“Look outside and you will see yourself. Look inside and you will find yourself.” Drew Gerald
Lack of Self Awareness
Lacking self-awareness limits your specific ability to realize your professional and personal goals, like trying to navigate a ship without a sextant. Self-aware leaders are not naive about their bad habits and can develop healthy habits.
Signs of a lack of self-awareness include a sense of your career stalling lacking direction or the lack of excitement from learning something new.
Overestimating your ability can lead to negative consequences for your performance and the organization. Leaders who have a distorted view of their strengths and weaknesses usually cannot effectively regulate their emotions and behaviors.
Research has demonstrated that the symptoms of a lack of self-awareness include negative consequences to your physical health, work performance, and social interactions.
Key summary points
When you know yourself, you have the insight necessary to recognize leadership bad habits and make transformational changes that deliver proven results.
Self-awareness means to know yourself so that you are able to see yourself objectively, you are aware of similarities and differences from others, and you understand the perspective from which you see others and the world.
A study of 486 companies over 30 months demonstrated that organizations with a higher percentage of self-aware leaders outperformed organizations with a lower rate.
Leaders can make bad decisions without understanding the wisdom of knowing their distortions and blind spots.
The better the quality of the feedback you receive, the better the decisions you can make.
Executive coaching combined with leadership 360 assessments help reveal deep insights into areas that with attention lead to enhanced potential.
Striving for better habits is a competitive advantage available to any leaders looking for a powerful point of differentiation. Visit our executive coaching page to learn more about how we help you achieve your personal or professional goals or partner with you to craft a solution specific to your organization's context and challenges. Let's talk.
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