According to a recent study by the Korn-Ferry Institute, “knowing thyself” isn’t just a nice-to-to; self-awareness flows directly to a firm’s bottom line.
I’ve been sharing this information with my network and it’s generating a lot of interest. While we’ve all know that awareness of strengths and weaknesses and how we are perceived by others is essential to being an effective leader, it’s interesting to see a connection made to a firm’s financial results.
An analysis by Korn Ferry (NYSE:KFY), the preeminent authority on leadership and talent, shows that public companies with a higher rate of return (ROR) also employ professionals who exhibit higher levels of self-awareness.
The Korn Ferry Institute analyzed a total of 6,977 self-assessments from professionals at 486 publicly traded companies to identify the “blind spots” in individuals’ leadership characteristics. A blind spot is defined as a skill that the professional counted among his or her strengths, when coworkers cited that same skill as one of the professional’s weaknesses.
The frequency of such blind spots was then gauged against the ROR of those companies’ stock. The analysis demonstrated that, on average:
• Poorly performing companies’ professionals had 20 percent more blind spots than those working at financially strong companies.
• Poor-performing companies’ professionals were 79 percent more likely to have low overall self-awareness than those at firms with robust ROR.
“Self-awareness can directly translate into better choices, and result in more fulfilling careers,” said Global Vice President of the Korn Ferry Institute, Joy Hazucha. “On the other hand, those with low self-awareness tend to scramble the messages they receive concerning improvement, interpreting them as a threat rather than an opportunity. They often have an ‘I am what I am’ mentality and continue doing things the way they always have.”
Hazucha says a person’s level of self-awareness can be increased through 360-degree performance appraisals paired with effective coaching. This in turn drives improved performance and greater work satisfaction.
“Feedback helps leaders to identify their blind spots,” said Hazucha. “We have known that feedback was important for personal improvement, but this shows that it also pays off in the organization’s performance. A collective focus on personal improvement leads to improvements in the organization.”
While being aware of your limitations sounds like a no-brainer, it’s not. First of all, it’s hard to get honest, accurate, behavior feedback. People are uncomfortable telling the emperor he/she has no clothes, and leaders often shoot the messenger or ignore the feedback.
360-degree assessments are one way to get feedback and build self-awareness, but not everybody has access to these tools. I’ve written about other ways to get feedback — where there’s a will there’s a way, if a leader is willing to ask and listen.
However, I would argue that self-awareness alone is not sufficient to improve leadership effectiveness. Management guru Peter Drucker once said: “The problem in my life and other people’s lives is not the absence of knowing what to do but the absence of doing it.”
It’s called the “knowing-doing gap.” We may know we are supposed to eat healthy foods and exercise, but at the end of the day, we make a zillion excuses not to, put off going to the gym and give in to the temptation of those chocolate chip cookies.
So how does a leader move from knowing to doing? Working with an executive coach can help a leader overcome their limiting beliefs and barriers, generate options and action plans, and help keep the leader focused and motivated. But again, not everyone can afford to hire an executive coach. A newly self-aware leader either has to be motivated enough to make it happen (the “just do it approach”), or he or she could work with a supportive manager, mentor or peer coach (a learning partner).
That’s assuming the leader wants to change. Take it from executive coach Marshall Goldsmith: When people don’t want to change — don’t waste your time.”
So the next time someone approaches your tentatively and asks, “Can I give you some feedback?” drop everything, pay attention, and thank the person for the feedback. Then, don’t just stand there, do something about it! You’ll be a better leader, a better person, and you will be making a positive contribution to your organization’s financials.
Dan McCarthy is the director of Executive Development Programs at the University of New Hampshire and runs the Management & Leadership channel of About.com. He writes the award-winning leadership development blog Great Leadership and is consistently ranked as one of the top digital influencers in leadership and talent management. He’s a regular contributor to SmartBrief and a member of the SmartBrief on Workforce Advisory Board. E-mail McCarthy.
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