How Leadership Self-Awareness Improves Financial Performance
Whether you're the CEO or a frontline leader, financial performance is a measure of effectiveness. But how do you improve bottom-line performance amid economic uncertainty, a persistent talent crisis, and the reality that only 3 in 10 employees are engaged? One key is self-awareness. A study involving 486 companies found it moderated business success, and poor-performing businesses had 20% more leaders with blind spots. Unfortunately, self-awareness is rare in leadership. A global study found that 95% of leaders think they are self-aware, but only 10-15% met the criteria to be considered self-aware on essential leadership competencies related to empathy, trustworthiness, and leadership performance. When you can't see yourself objectively and don't accurately understand the perspectives of others, you can't make the transformational changes necessary for business growth. Here are two proven strategies to increase leadership self-awareness and the signs when it might be lacking.
Why leadership self-awareness matters
Recently the positive connection between self-awareness and improved company earnings was established by Korn Ferry. A study of 486 companies over 30 months found 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 importance of self-awareness for achieving success and significance is not new. The researched benefits of knowing yourself are numerous beyond improving a business's bottom line. Some of these include:
higher quality leadership relationships
improved self-control
better decision-making
enhanced 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. Also, increased awareness may enable leaders to create shared emotional experiences that enhance personal and follower growth, well-being, and psychological safety.
Leaders are better prepared to adapt appropriately when they possess a heightened self-awareness.
Self-awareness in leadership
It is natural to 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.
Leadership habits 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.
“To know yourself, you must sacrifice the illusion that you already do.” Vironika Tugaleva
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, these rear-view mirrors have 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 feedback you tend to receive. This makes knowing yourself even more critical and challenging.
The last thing any leader needs in today's demanding workplace is someone or something telling them what they already know or what they perceive they want to hear. 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.
Self-Awareness Strategy #1: Leadership Assessment
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 a 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
Self-Awareness Strategy #2: Executive Coaching
Combined with leadership assessments, executive coaching 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 self-awareness and organizational outcomes.
Given that the ultimate goal of coaching is related to change within you, the process centers on using essential questions and client-centered critical thinking to invoke self-awareness and personal responsibility.
Signs you might lack 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 accidental habits and are better positioned to develop life-changing leadership habits.
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.
Signs of a lack of self-awareness include:
Stalling career
Lack of direction
Absence of learning something new
Surprised frequently by feedback from others
Frequently make excuses
Constantly firefighting and struggling with time management
What is your real self-awareness challenge?
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.
References
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