“A Better Return on Self-Awareness”
–David Zes and Dana Landis, Korn Ferry Whitepaper, August 2013.
Zes and Landis argue that public companies with the highest rates of return had employees with higher self-awareness. They examined 6,977 self-assessments from 486 companies and identified “blind spots” that arose when employees assessed their skills as higher than their skill ratings when given by others in the company. The companies with employees with the most blind spots showed lower stock performance:
Among their findings:
- Poorly performing companies’ employees had 20 percent more blind spots than those working at financially strong companies.
- Poor-performing companies’ employees were 79 percent more likely to have low overall self-awareness than those at firms with robust ROR. Stock performance was tracked over thirty months, from July 2010 through January 2013. During that period the companies with the greater percentage of self-aware employees consistently outperformed those with a lower percentage. (Zes and Landis, 2013)
“Stock performance was tracked over thirty months, from July 2010 through January 2013. During that period the companies with the greater percentage of self-aware employees consistently outperformed those with a lower percentage.” Outcomes from the ProSpective Assessment in 2012 “revealed that 79 percent of those evaluated online had at least one blind spot — a skill that an employee counted among his strengths when coworkers cited that same skill as one of his weaknesses (Orr 2012). For this new study, Korn/Ferry considered people exhibiting three or more blind spots to have low self-awareness.”
Zes and Landis conclude that “now we have statistical findings that suggest benefits also exist at the macro level of an organization. Leaders with higher self-awareness not only have greater job satisfaction and commitment to their employer personally, but that effect also appears to trickle down to a manager’s direct reports (Luthans and Peterson 2003). In the constant drive for competitive advantage, it turns out that helping employees to better understand themselves and fostering a culture of healthy feedback could also help to improve an organization’s overall performance.”
–Dr. Becky Winkler, Principal at Green Peak, with John Hausknecht, Assistant Professor, Cornell University’s School of Industrial and Labor Relations (2010).
This study examined the track records of 72 senior executives at public, venture-backed and private-equity sponsored companies. The researchers argue that “a high self-awareness score was the strongest predictor of overall success. This is not altogether surprising as executives who are aware of their weaknesses are often better able to hire subordinates who perform well in categories in which the leader lacks acumen. These leaders are also more able to entertain the idea that someone on their team may have an idea that is even better than their own. Conversely, an executive who is self-aware and good with staff will be better at working with clients and business partners, better at grasping and executing strategy, and better at delivering bottom line results. These mostly lower ego, trust-inspiring executives still hold the bar very high and demand strong performance but with a ‘how’ (or style) that incorporates strong relational skills and respect.”
Through statistical analyses, performance was simplified into two separate categories: the ability to drive results and the ability to manage talent, and when the findings came back ...conventional wisdom took a hit. J.P. Flaum, managing partner of Green Peak Partners, argues that "Our findings directly challenge the conventional view that 'drive for results at all costs' is the right approach…The executives most likely to deliver good bottom-line results are actually self-aware leaders who are especially good at working with individuals and in teams." Leadership searches give short shrift to "self-awareness," which should actually be a top criterion. A high self-awareness score was the strongest predictor of overall success. "Executives who are aware of their weaknesses are often better able to hire subordinates who perform well in areas in which the leader lacks acumen," said Dr. Winkler.
Executives who are good “people managers” (i.e. possess strong core leadership skills) on the other hand, produce better strategic and financial performance as well. In other words, soft values drive hard results. As you will see, we don’t mean pushovers or ‘doormat executives’ either. We mean leaders who are self aware, able to hold teams accountable, and who can execute tough decisions in an inspiring–not abusive–manner. We also mean executives who encourage rather than snuff out productive conflict and the challenging of ideas–even their own.”
Winkler also argues that board members and equity partners also “need to focus not only on skills but also on culture, and on how the candidate’s personal “culture” fits with the company’s. The most important step boards and investors can take is to become more aware of the culture of the companies they own and run. Context matters. It’s not enough for an investor or director just to sit in on board meetings, which for the most part has been their inclination. They need to understand how people interact in the company, and make sure that those interactions are positive and truly supporting the bottom line.”