Why Your Lack of Self-Awareness is A Barrier to Business Success.

What's the one mistake that many leaders still make? No matter where I go in the world and which company I visit, I see this. Whether I am being an executive coach or a strategic leadership advisor these are some of the things leaders ask me:

• How can we make our teams deliver?
• How can we fix the performance problem in our company?
• How can we be innovative when no one has ideas?
• How can we make the transformation speedier?

What we do as leaders, is look outwards rather than inwards, we don't look at ourselves and how we could be blockers to innovation, delivery and transformation. Leaders have the profound power to either elevate or diminish their teams. The way we engage with employees can make or break careers, business outcomes, and organizational culture. Leadership isn't just about managing tasks; it’s about unlocking the full potential of people. When this doesn’t happen, businesses miss out on growth opportunities, innovation, and high performance. Yet, despite this profound responsibility, many leaders find themselves in positions of influence without having the skills to bring out the best in their people.

I am sure you don't think that the barriers to execution are your fault or the resistance to change is coming from you, but perhaps if you are brave and have the courage to find out how what you say and do could be a blocker, then you have the power to change things. If you never know your blind spots, the impact you are having on your people or the whispers about your leadership that haunt the corridors of your company, then it is unlikely that things will change!

The Global State of Leadership

Research reveals a concerning trend: many individuals in leadership positions are ill-prepared for the responsibilities that come with their roles and even more alarmingly leaders often are not exposed to continuous development and feedback on their leadership. So is it any surprise that my GenX peers continue to lead as they always have done, because this is how they became successful, but we know that the leadership that got us to where we are today, will not take us into tomorrow. Gallup constantly tell us that only 13% of employees feel engaged at work, they also say it's largely due to ineffective leadership.

While no leader wakes up intending to fail or demotivate their teams, ineffective leadership often happens accidentally. This "accidental diminishment," as Liz Wiseman describes in her work Multipliers, stems from well-intentioned behaviours that end up limiting rather than enhancing team potential.

Wiseman categorizes leaders into two types: Diminishers and Multipliers.

• Diminishers tend to drain energy and creativity from their teams, often without realizing it. They may micromanage, stifle debate, or overwhelm employees with their own ideas, leaving little room for others to contribute.
• Multipliers, on the other hand, amplify the capabilities of their teams. They encourage growth, foster innovation, and create environments where people feel empowered to do their best work.

Naturally, we all like to think of ourselves as multipliers, but Liz’s research helped me realize that while my 'billions of ideas' energized one team member, they actually stifled many others. I also experienced frustration under a boss who constantly changed direction, making it hard to know which ideas to pursue. We’d often invest time developing an idea, only to find it had become irrelevant.

Another challenge as we move into senior roles is the decrease in feedback we receive—and there’s compelling research that explains why this happens."

1. Less Feedback as Seniority Increases:

Research shows that the more senior leaders become, the less feedback they tend to receive. One reason is that power dynamics shift at higher levels. Employees and colleagues may be more hesitant to offer feedback to senior leaders due to fear of consequences, deference to authority, or simply because they assume senior leaders don’t need it. Additionally, senior leaders may be less exposed to the everyday operations where feedback flows naturally. Research from the Center for Creative Leadership (CCL) highlights this issue, stating that senior leaders often operate in an "information bubble," where candid feedback is filtered or watered down by those around them.

2. Zenger's Research on Experience and Effectiveness:

According to Zenger Folkman’s research, more experienced leaders tend to learn less and may become less effective over time. The data suggests that early in a leader's career, there is often a steep learning curve as they seek out new information, feedback, and experiences to grow. However, once they accumulate significant experience, many leaders develop a false sense of expertise, becoming overconfident and assuming they already know what they need. This mindset can hinder ongoing learning and development, ultimately making them less adaptable and less effective.

Key findings from Zenger Folkman:

• Leaders with more experience tend to solicit less feedback and often stop seeking new learning opportunities.
• Over time, this leads to a plateau in leadership effectiveness, as they may rely on outdated methods or fail to adjust to changing environments and team dynamics.

In essence, the very things that make leaders rise to senior positions—confidence, expertise, and experience—can also become obstacles to continued growth and effectiveness if they stop actively seeking feedback and learning.

But why do so many leaders fall into the category of Diminishers? One critical factor is a lack of self-awareness.

Self-Awareness: The Cornerstone of Effective Leadership

The first step to becoming an effective leader is self-awareness. McKinsey’s recent article, Inside Out Leadership, underscores this point, stating that leaders must deeply understand themselves before they can truly lead others. Self-aware leaders are attuned to their strengths, weaknesses, triggers, and behavioural patterns. This understanding enables them to manage their reactions, communicate more effectively, and connect authentically with their teams.

However, the challenge is that most leaders overestimate their self-awareness. According to research by Tasha Eurich , 95% of people think they’re self-aware, but only 10% to 15% actually are. This disconnect between perception and reality has significant consequences. Leaders who lack self-awareness are more likely to exhibit the very behaviours that diminish their teams, even when their intentions are positive.

Steps to Becoming a More Self-Aware Leader

Becoming a self-aware leader is not an overnight process, but it is essential for those who want to create lasting impact. Here are a few practical steps to begin developing self-awareness:

Seek Regular Feedback:

Don’t rely solely on your own perceptions. Actively seek feedback from peers, direct reports, and mentors. Tools like 360-degree feedback assessments offer a well-rounded view of how others see you. Avoid surrounding yourself with 'yes' people who only reinforce your beliefs and never point out areas for growth. It's crucial to hear from those who challenge your thinking and offer diverse perspectives. Consider who is in your circle of feedback givers—are they diverse enough? We tend to seek input from those who think like us. In today’s digital world, there are many tools available to gather meaningful feedback, but the key is not to ignore it.

Reflect on Your Reactions:

Pay close attention to how you respond emotionally in stressful situations. Do you react defensively, withdraw, or become overly controlling? I've coached many leaders who were unaware that their facial expressions were being misinterpreted by employees. If you tend to make a face while thinking, be sure to communicate that you’re reflecting, not dismissing their ideas!

Self-awareness means you understand the implications of your words and thoughts on others. It’s fundamental in leadership. The second step is to self-reflect, which is the exercise of developing behaviour practices to improve. McKinsey

Keep a journal:

Each week spend time reflecting on your week as a leader. Consider the following questions:

What went well?

What didn't go so well?

What could you have done differently?

What will you do differently?

Rather than thinking about the task or the meeting, consider how you got to the result i.e. which behaviours enabled an outcome and which proved to be barriers.

Write down your reflections and go back over them each week. What actions are you taking? How are you changing?

Get your coach to observe you:

As an executive coach, I often shadow leaders or observe them in meetings, providing feedback on what I notice. This could range from how their behaviour stifled idea-sharing to how their status prevented great ideas from being heard. Behavioural analysis can be incredibly insightful, but it requires being open to feedback, understanding your impact, and making changes. A colleague shared a story this week about giving feedback to a senior partner who ignored two people trying to contribute. The leader’s response was, 'I've been hearing that feedback for years.' The issue is, she hasn't acted on it, continuing with the same behaviour that has brought her success. But what about her team and department? Is she truly unlocking their potential?"

Of course if you don't have a coach, it could be a trusted peer or experiment with AI tools such as Your AI Communication Coach

Understand Your Blind Spots:

Everyone has blind spots—areas where we don’t fully understand our impact. I often conduct 360-degree interviews within leadership teams to gather feedback, which can be incredibly powerful in helping senior leaders see how they’re affecting their teams. Many companies have told me they lack the talent to get the job done, but when we assess their people, we often find that the talent is there—it’s just not nurtured, misunderstood, or stifled by organizational politics. I’ve also seen so-called low performers thrive when they switch jobs or managers.

I can’t make you self-aware; as McKinsey’s 'Inside-Out Leadership' article points out, leaders eventually realize that the power to change comes from within."

If we go back to those questions at the start that companies often ask me, why not consider reframing those and ask yourself:

1. What I am doing that is hindering delivery in my team?
2. How am I a barrier to performance?
3. What could I do differently to cultivate ideas in the workplace?
4. What am I doing to slow down our transformation?

If your answer is: It's not me, it's them then please invest in an executive coach.

The business case for self-awareness

Google:- The results of Google's Project Oxygen revealed that self-awareness and emotional intelligence were critical traits of their best managers. Managers who were more self-aware were better at understanding the needs and emotions of their teams, leading to higher employee satisfaction, better team performance, and greater innovation.

Johnson & Johnson:- conducted an internal study to assess the relationship between emotional intelligence (which includes self-awareness) and leadership performance. The study found that leaders who ranked higher in emotional intelligence competencies, such as self-awareness, led business units that outperformed others. Specifically, these leaders were more effective in managing conflict, making strategic decisions, and inspiring teams to higher levels of performance. The leaders who demonstrated high emotional intelligence, including self-awareness, led business units that achieved better financial outcomes than their counterparts.

Microsoft:- Satya Nadella encouraged Microsoft’s leaders to focus on understanding themselves and their teams. By promoting a culture of self-awareness and emotional intelligence, he transformed Microsoft from an internally competitive, insular company into a more open and collaborative organization. His focus on self-aware leadership fostered greater innovation, teamwork, and employee satisfaction, all of which translated into strong financial performance.

Conclusion

Leadership effectiveness starts with self-awareness. When leaders understand themselves, they are better equipped to understand and lead others. This is not just an introspective exercise; it has tangible effects on team performance, employee engagement, and overall business outcomes. As leaders, we have the power to multiply the talents of our teams or diminish them—often without even realizing it.

The future of leadership demands a new kind of self-awareness. It’s not enough to focus on external goals and business outcomes; we must first turn inward and recognize how our behaviours, actions and words shape the experiences of those we lead. Only by doing so can we unlock not just our potential, but the potential of those around us and ultimately our businesses.

Liz Rider is an Organizational Psychologist, LinkedIn Top Voice on Leadership and Former Global Head of Leadership. Her expertise lies in executive coaching, leadership development, and delivering impactful speaking events for large multinationals globally. She believes that work is becoming unsustainable and through human centric leadership, we can change this.

Would you like your leadership team to be self aware?