A significant skillset that has now become vital to business founders is self-awareness. Having the ability to see ourselves clearly is a valuable asset in business and life. This clarity leads business owners to have more confidence and creativity, better communication and decision making, and develop stronger relationships. This importance of self-awareness in business founders provides them with the ability to achieve more and create more opportunities for themselves.
Good self-awareness impacts employee satisfaction in your businesses, and helps build effective leadership that allows your business to become more successful and more profitable. This guide for business owners will provide the means to understand better the importance of self-awareness in business founders and how to develop it within your company.
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What is Self-Awareness to a Business Founder?
Self-awareness is the ability of a person to focus on one’s self. This is reflected in how one’s actions, thoughts, or emotions align or don’t align with one’s internal standards. It is the ability to see oneself clearly and objectively and is mainly done through reflection and introspection.
Having the experience or a position of power can often provide a false sense of confidence. This can lead to an overestimation of skills and abilities. Studies have shown that business owners often carry this assumption, which consequently raises the importance of self-awareness.
Self-awareness is understanding your desires, needs, habits, failings, and the elements that make you a unique individual. Having this ability to interpret actions and thoughts objectively is the importance of self-awareness in business founders. The more you raise awareness of yourself, the better equipped you can adapt to the changes thrown to you in the running of your business.
5 Importance of Self-Awareness in Business Founders
Being self-aware provides plenty of positive practices that every business owner can benefit from. When we look inward, we handle our thoughts, feelings, and behaviours more clearly, which is important when we are faced with the chaotic environment that business operates in.
Doing this allows us to recognise how we treat others and how others view us. Here are some aspects that business owners can develop to understand the importance of self-awareness:
1. Positive self-development
Increased self-awareness helps you understand yourself a lot better as a business owner. When we align with our behaviours and our choices, the stronger the foundation we allow ourselves to develop. These behaviours and choices come from feelings, thoughts, values, goals, and biases that we carry innately. Understanding how we genuinely feel helps us be more proactive in our choices, which, in turn, helps encourage positive self-development.
2. Understand the perspective of others
One importance of self-awareness is gaining the insight that allows us to see other people’s perspectives of ourselves. As business founders, when we understand ourselves better, it also translates to understanding others better. Awareness of others’ feelings and beliefs based on their experiences develops empathy.
Fostering empathy helps us become better listeners too. Seeing things from other people’s perspectives allows us to practice better self-control and gain better traits that encourage cooperation in business.
3. Understand your own strengths and weaknesses
As a business owner, we typically are more independent and self-sufficient. Those traits helped us start and grow our business. However, gaining self-awareness is a reflective practice that allows us to acknowledge our strengths and weaknesses.
Spending the time to know what you’re good at and what your failings are, helps you gain insight on how to improve them. Success is more achievable once you recognise the skills you’re great at and develop them further while improving what’s needed.
Acknowledging your weaknesses is also an exercise of self-compassion. Being honest with yourself to know your shortcomings makes it easier to better yourself while accepting the things you can’t change.
4. Better critical thinking and decision making
It can often be a challenge, most notably for business founders, to assess information objectively to arrive at a rational decision. When you’re self-aware, you can process data objectively while identifying subjective points such as others’ opinions to decide rationally through critical thought. A person who has self-awareness can accept all salient points and arguments without bias to arrive at the most appropriate decision.
5. Better well-being
Among the importance of self-awareness is how it can improve one’s well-being. When you recognise your own strengths and weaknesses, you can create achievable goals and have the drive to attain them. By being self-aware, you can also work more creatively and productively with others in your business.
Having confidence and self-control can go a long way when working with other people, making you one of the most likeable people in your business. These elements can lead to positive behavioural changes that help us attain personal growth, healthier well-being, and business success.
How Self-Awareness is Linked with Emotional Intelligence
In understanding the importance of self-awareness, it’s vital to recognize its role in developing emotional intelligence. Emotional intelligence refers to a person’s abilities to recognize and regulate emotions within themselves and others. Emotional intelligence has five key components, these are:
- Self-awareness. The ability to see one’s self clearly and objectively.
- Self-regulation. The ability to understand and manage one’s own behavior and reactions to others.
- Social skills. The ability and skills we use to interact and communicate with others. This refers to verbal and non-verbal communication, including speech, facial expressions, gestures, and body language.
- Empathy. The ability to understand other people’s feelings, thoughts, and emotions.
- Motivation. The ability of an individual to develop a personal drive towards achievement and improvement, striving for goals, and an initiative to act on opportunities with resilience and optimism.
While there are other elements to developing healthy emotional intelligence, self-awareness is a core component that makes it a valuable factor to have. Self-awareness is considered a necessary foundation to emotional intelligence and builds on other mentioned components.
For example, a person must have the self-awareness to regulate themselves or have strong social skills. Therefore, strengthening self-awareness is critical to building emotional intelligence, providing the necessary understanding and abilities to achieve improvement.
4 Types of Self-Awareness in Business Owners
There are different types of self-awareness that every business owner should be aware of. Self-awareness is a necessary trait that every business owner should continually develop. It is foundational to business success and attaining relative achievement in all aspects of life.
Understanding the importance of self-awareness and its different types provides the skills to manage yourself better and be better at leading and influencing others to attain better results. Here are four types of self-awareness that pertain specifically to business owners:
1. Self-awareness based on strengths
Discovering your strengths is a vital part of self-awareness. By paying attention to what you’re good at, you can maximize the work associated with it. Knowing your strengths also allows you to keenly develop what you’re good at in order to even be better at it. To find out what your strengths are, you can ask yourself these questions:
- What activities or work in your business causes you to feel invigorated and energized?
- What aspects of work do others provide comments on how good your work is?
- What kind of projects in your business do you like or are naturally drawn to?
2. Self-awareness based on weaknesses
Most business owners are more comfortable stating and embracing their strengths. Unfortunately, to fully understand the importance of self-awareness, you must also know your weaknesses. Knowing where you are not as gifted is just as important as your strengths. This knowledge allows you to avoid the projects in business you lack the abilities for while focusing on what you need to improve on.
Knowing your weaknesses also guides you to collaborate with those who can fill in the gaps — an essential part of scaling up businesses. Introspectively, understanding your weaknesses can also build your humility, which is a vital virtue. To discover your weaknesses, you can:
- Create a list with two columns, your strengths, and your weaknesses. Filling up your strengths should be fairly simple, but working on your weaknesses column with full honestly will help you realise what aspects of your work you lack in.
- Directly ask your co-workers, family members, and friends, “If you had to assess my performance as a business owner, and your job would be on the line for it, what kind of projects would you not want me to pursue?” This question can provide valuable insight into people’s perceptions of what you need to improve as a business owner.
- Taking a personality test is an effective way to identify strengths and weaknesses. We help our clients with profiling tests that give a comprehensive insight of themselves and their teams, allowing for better communication and collaboration. There are other more basic options for these tests that you can find online for free, such as the Jung Personality Test.
3. Self-awareness of your emotional triggers
Knowing your triggers is crucial to self-awareness. How you feel can easily affect the people around you and the situations you find yourself involved with, which is going to be happening on a daily basis as a business founder. Discovering the situations that trigger your anxieties can make it easier to avoid or work around them. To know what your triggers are, ask yourself:
- Are you affected when meetings don’t move forward quickly enough or lack the structure you expect?
- Do you feel uncomfortable when conversations move too quickly for your pace, that you don’t have enough time to process what is being discussed?
- Do you get anxious when you ask your employees to have a one-on-one meeting?
- Are you unhappy when you work with someone you consider less competent than yourself?
- Do you feel overwhelmed when you try to take on a big project or client?
It’s vital to identify your emotional triggers so that you can develop the proper strategy to remain calm when facing those situations. In addition, understanding what triggers you can help you override or overcome your instinctive reactions to stay the course and become a stronger business owner.
4. Self-awareness of how you're being received by others
As a business owner, you deal with people all the time. An importance of self-awareness is that it helps you determine how you are being received and perceived by others. This is because you might be triggering other people to be at their best or their worst when encountering your personality.
An example of this would be when you meet someone walking down the street, and you say “hello,” but they don’t give a reply. They could either be deep in thought or want their privacy respected, and having awareness can help you better read the situation.
The same can be said when you’re in deep thought and fail to reply to a greeting. Other people might think that you’re a snob or lack people skills. It’s crucial to raise your self-awareness for these situations to determine better how you’re being received by other people.
How to Know If You're a Self-Aware Person
Many business founders consider themselves to be self-aware, thinking that they’ve mastered the ability effectively. However, studies show that most business founders who think this way, end up being the ones who have the most blind spots that keep them from seeing the bigger picture of their lives.
Ninety-five percent of business founders believe they’re self-aware, but surveys indicate that only ten to fifteen percent have high self-awareness scores. Our false self-assessments lead us to see ourselves more positively, where in reality, there’s a disconnect and we’re actually being unaware of just how we’re actually behaving.
Social media has also become an instigator for this disconnect, with business owners being more self-absorbed due to external input. Some business owners tend to fear becoming more self-aware since it involves seeing one’s ugly truths more clearly. The process may be complex, but the importance of self-awareness is that it allows you to determine what you intend to do about it.
If you want to know your level of self-awareness, the iNLP Center has a short test with twelve multiple-choice questions that can determine your self-awareness status. The self-awareness test can prove to be very enlightening and provide you insight on how to continue bettering yourself so that you can be more effective in scaling up your business.
How to Develop Self-Awareness: Skills You Need as a Business Owner
Understanding the importance of self-awareness includes a sharp realisation of your personality, especially as the founder of a business. Developing self-awareness allows you the opportunity to make changes in your behaviour and beliefs on a daily basis. To develop your self-awareness, you can:
- See Yourself. To develop self-awareness, practice envisioning the best version of yourself. By reflecting on your hopes, dreams, and aspirations, you can determine how well your skills and abilities are and what you need to improve to achieve them as a business owner. An excellent exercise for this is creating a personal vision statement to improve and sticking with it.
- Ask your “what” questions. Self-reflection is a vital part of self-awareness. This includes asking yourself the right “what” questions that place your mind into an objective and more open space for self-assessment. Questions such as, “What was I feeling at that moment?” or “What can I do to overcome this challenge?” are fitting inquiries to examine.
- Control your triggers. Many business owners are often unaware of their body’s reaction to situations such as negative emotions. Bringing awareness to your physical state by recognising your emotional triggers allows you to stay on top of them. Identifying your feelings is the first step to not letting them overwhelm you and make bad decisions that can negatively affect your business.
- Don’t hesitate to ask others. Gaining feedback from other people isn’t something you should be afraid of, even your employees. Knowing their perception of you in certain situations can help better equip yourself to act more accordingly.
Importance of Self-Awareness in Business
Self-awareness can improve confidence, communication, and job performance, leading to better outcomes in your business. Aligning our actions and standards provides improvement gains that are best reflected at work.
Additionally, self-awareness is considered an essential element to workplace success, and especially true for business owners. Here are some points focusing on the importance of self-awareness in the business:
1. To be better at dealing with stress as a business owner
Business owners are always faced with incredible levels of stress. When business owners are stressed, they often invoke negative emotions such as being angry or defensive. Being self-aware allows you to identify this behaviour to manage situations much better in the running of your business. Knowing what triggers your stress helps you respond more calmly when facing these situations, and consciously opting to means that take you away from harmful actions that can negatively impact your business.
For example, if you’re feeling stressed or in a bad mood, take a walk outside or a few moments to breathe and collect yourself. When you identify the situations that provide stressful moments, you prevent yourself from making knee-jerk reactions that you might regret later on. Self-awareness is also a vital way of taking care of yourself to avoid burning out from being an entrepreneur.
2. To understand the impact of your emotions on other people
Developing self-awareness provides you with plenty of benefits as a business owner, but it also benefits those around you in your business. You will also find that this even extends to your personal life. When you know your emotions and moods, you can keenly identify how your feelings and actions can impact other people. When you’re stressed, for example, being self-aware allows you to minimise how you project your strains onto your business partners and employees.
It can often be challenging to set aside emotions since it’s a common misconception that it’s a sign of weakness. However, when you understand how your feelings can affect your business and other people, you actually become a strong business leader.
3. To manage your time better
Self-awareness doesn’t just help your personality. It also assists in your business productivity. Knowing yourself better also means understanding when and how you’re at your best. This includes determining which time of the day you have the most energy to be productive and knowing what you might need to improve effectiveness as a business owner.
4. To feel more confident in your capabilities
Exercising self-awareness is a great way to get in touch with your strengths and talents. Gaining insight into what you’re good at helps you be more confident in your business. Knowing what roles you’re most effective in, partnered with an understanding of your skillset, allows you to take on more suitable tasks that you know you can be most productive.
This can have a profound impact on your business. We’ve seen how our clients gained clarity on the types of work that are effective and ineffective for themselves. This directly translates in them structuring their team and processes to work around these so that the business can scale up effectively.
5. To take on feedback better
Criticism can often be difficult to accept, and there are times when this cannot be avoided as a business founder. Self-awareness helps you understand that the feedback you’re receiving can help you improve yourself. When you are self-aware, you’re more open to feedback and criticism and know to accept it constructively. Learning from feedback is always an excellent opportunity for self-improvement, and can help you develop new perspectives when looking at the way you run your business.
Conclusion
The path to self-awareness is a lifelong journey that should never end, especially for entrepreneurs. Many business owners who fail to study themselves often encounter meaningful realisations when they least expect it. Moving forward in developing your self-awareness should be a constant practice that turns into a habit. This only benefits you and your business. The importance of self-awareness is that it holds continuing value in your overall development as a person, as you constantly move towards becoming the best version of yourself.
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