Why self-awareness is so important for good leadership, but more complicated than you might think

It is generally accepted that effective leadership requires a large measure of self-awareness.

When the 75 members of Stanford Graduate School of Business’s Advisory Council had to choose the most important capability for leaders to develop, their answer was very clear: self-awareness.

Of course, we all know examples where self-awareness is sorely lacking - the leader who cannot understand why others find him difficult, displays overconfidence, poor judgment and the inability to learn from his mistakes. They find it hard to build teams or relate to others. At worst, they create toxic atmospheres at work.

On the positive side, research suggests that when we see ourselves clearly, there are multiple benefits to ourselves and others.

"There are boosts in confidence and creativity. Self-aware leaders make sounder decisions, they build stronger relationships, and communicate more clearly", says Dung Hoang, Principal at Odgers Berndtson Germany.

They are more effective leaders, resulting in satisfied employees and more profitable companies.

Obstacles to self-awareness

There are however obstacles in the way of reaping the rewards of self-awareness.

First-off, as research reported in HBR points out, even though most people believe they are self-aware, there is very little of it around. The estimate is that only 10%–15% of the people studied actually fit the criteria. While women in executive-level management positions tend to exhibit more self-awareness than men in the same positions, the overall percentages suggest there is opportunity for growth.

"It is troubling that not all people learn from their experience and position, especially those further up the leadership ladder", adds Olaf Szangolies, Partner at Odgers Berndtson Germany.

Studies have shown that people do not always learn from experience, nor does expertise help people root out false information that might be perpetuating our unchallenged assumptions. In fact, being highly experienced can stop leaders from seeking contradictory evidence and questioning our established assumptions.

The false sense of confidence about a leader’s performance can feed an overconfidence about their level of self-knowledge. Specifically, more-experienced managers were found to be less accurate in assessing their leadership effectiveness compared with less experienced managers.

Power can block self-awareness

Also, the more power a leader has, the more likely they are to overestimate their skills and abilities. As reported by HBR, ‘one study of more than 3,600 leaders across a variety of roles and industries found that, relative to lower-level leaders, higher-level leaders more significantly overvalued their skills (compared with others’ perceptions). In fact, this pattern existed for 19 out of the 20 competencies the researchers measured, including emotional self-awareness, accurate self-assessment, empathy, trustworthiness, and leadership performance.’

"Senior leaders think they are far more emotionally intelligent and are leading accordingly than they actually are. One can understand why. There are fewer honest voices to challenge a CEO and offer feedback on their style and behaviour", states Olaf Szangolies, Partner at Odgers Berndtson Germany.

Business professor James O’Toole notes that, ‘as one’s power grows, one’s willingness to listen shrinks, either because they think they know more than their employees or because seeking feedback will come at a cost.’

Critics can provide valuable feedback

In contrast, the most successful leaders actively and consistently seek frequent critical feedback. And they do this from multiple sources: their bosses, peers, employees, their board, and other key stakeholders. By doing this, they become more self-aware and are eventually seen as more effective by others.

Another way to improve external self-awareness is to seek feedback from those who have your best interests in mind and are able to tell the truth.

When receiving feedback it is important not to rely on one person’s opinion before making a change.

Two types of self-awareness

It is important to note that according to research, as reported by HBR,  self-awareness has two dimensions to consider: internal and external.

The former is about how clearly we are able to see our own values, passions, aspirations, how the fit with our environment, the reactions they cause (including thoughts, feelings, behaviors, strengths, and weaknesses), and impact they have on others.

This research suggests that that internal self-awareness is associated with higher job and relationship satisfaction, personal and social control, and happiness. On the negative side, internal self-awareness is related to anxiety, stress, and depression.

The external aspect of self-awareness takes the factors mentioned in the internal case and then considers how understanding we are of how other people view us.

Research shows that if you know how others see you, your skills to show empathy and see others’ perspectives are greater. A leader who successfully sees himself as his employees do, will find that his employees tend to have a better relationship with them. Employees feel more satisfied and regard the leader as more effective.

Interestingly, and perhaps counter-intuitively, a leader who is high on one type of awareness isn’t necessarily high on the other. In fact, research has found that there is almost no relationship between internal and external self-awareness.

Understanding self-awareness and then practicing behaviours that unleash its potential is not a simple process, but it has substantial and enduring rewards.

If you want to discuss leadership issues like self-awareness and personal development, and how they might accelerate your career trajectory, please get in touch.