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The importance of self-awareness in business success

12 min read
Sean Chaudhary

Running a successful business requires information, knowledge, and marketing skills. If you lack these fundamental things, your business will likely fail due to poor decision-making and mismanagement. So, how does self-awareness in business fit in?

Granted, while focusing only on technical and management skills is key to the success of a business, sometimes a lack of self-awareness can lead to a business failure.

In fact, lack of self-knowledge alongside entrepreneur incapacity and enterprise incompetence are among the factors that cause SMMEs (Small, Medium, and Macro Enterprises) failure.

Unfortunately, lack of self-awareness in business is rarely discussed. In this article, we look at the reasons self-awareness is key to the success of businesses.

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What is self-awareness in business?

Self-awareness is the ability to monitor and focus on one's self. In other words, this is the ability to monitor and control one's emotions and reactions regardless of the situation. Self-awareness helps one understand their weaknesses, strengths, triggers, and motivators, which is key when navigating different situations.

Self-awareness allows people to respond to situations in a better way. But self-awareness is not something that you only practice to create better relationships with friends and family. Self-awareness in business is important, too — it is a vital technique that both founders and business leaders should apply.

The best way for business owners and leaders to deal with business challenges is by preparing for them before they happen — this is one of the lessons that COVID-19 taught us. Business owners should always consider how events like COVID-19 and wars can impact their businesses and how they could keep their businesses afloat during uncertainties.

Of course, you can't always know what to expect, but you should be able to analyze the situation when it occurs and make a practical decision.

Self-awareness in business is a valuable technique in your arsenal as it helps you evaluate yourself in different situations and make the best decision based on the current situation. The more you become aware of your inner world and the world around you, the better you can navigate the current business world.

In other words, self-awareness helps you know what you can handle well and what you should delegate to someone else. This will help your team understand that it's okay not to be good in all situations but also helps them get the most from every situation.

Benefits of self-awareness in business

There's no business without customers, but also, there's no business without a workforce. Your team is a crucial asset that determines whether a business will fail or succeed.

Self-awareness is a force that promotes positive practices that help business owners become better versions of themselves. When you become self-aware as a business owner, you can organize and monitor your thoughts and feelings more clearly, which is vital when handling an uncertain business environment.

Below are the benefits of self-awareness in business:

It helps understand one's strengths and weaknesses

Everyone has that one thing that they are good at, and if given a chance, they can excel to extraordinary heights.

The first way self-awareness can benefit businesses is that it helps understand one's strengths and weaknesses. This is important because it means one can handle tasks they are good at and delegate tasks they are not good at (which means a higher success rate for business).

If people spend time doing what they are good at, they will be more engaged and productive. They will also feel fulfilled and attach meaning and purpose to themselves.

Self-awareness promotes positive self-development, which is key to business success

If you cannot understand yourself as a business owner, you cannot understand your customers, employees, and business partners.

Luckily, self-awareness helps us become more conscious of our behavior and choice and align our actions and reactions with them. Our behaviors and choices are a result of the thoughts, feelings, goals, and values we hold within ourselves.

Becoming self-aware means understanding how you really feel and can help you become more proactive with your choices and promote positive self-development (which is key for business growth).

Self-awareness makes business owners better at dealing with stress

Running a business can sometimes be stressful. As a business owner, you should be able to manage stress to avoid showing negative traits such as anger or becoming defensive. Showing these negative emotions can impact your relationships with customers and employees and negatively impact business growth.

Self-awareness in business allows you to handle your situations more objectively and make you more conscious of your decisions. It makes you calmer and more resilient when faced with challenging business situations.

Self-awareness helps you understand your triggers and how to change your focus when handling your problems to avoid negative actions that can impact your business.

Self-awareness helps understand colleagues and customers better

Managing a business is not easy. Apart from ensuring that everything runs as expected, you need to know the best way to manage people and understand your customers better.

But you won't be able to manage others better if you cannot manage yourself. So, the first step to managing others and having a productive relationship is understanding yourself.

Self-awareness in business can help manage stress from coworkers and customers. This way, you can practice resilience and know how to communicate better with others which is crucial for success.

Being self-aware also makes it possible to understand your customers better. And there’s nothing customers love more than to feel understood.

But if you don't understand yourself, it will be hard to understand how your customers think. In fact, how better you will understand your customers is directly proportional to how you understand yourself.

The trickiest part is that you cannot build a better relationship with your customers if you can't understand them. This includes understanding their pain points, goals, desires, and how their mind works. The best way to achieve this is to start by understanding yourself.

Self-awareness can help be more confident as a business owner

Confidence is a crucial factor in business success. When you become more self-aware, you realize your strengths and talents, which helps you become more confident in your business.

For instance, you may realize that you can work better under pressure (which not everyone can do) or you're better at convincing customers. This will elevate your confidence in your business and put you on the path to success.

Also, knowing your strengths allows you to choose tasks you excel in for more productivity. Self-awareness will provide insights into how to structure your team and processes to scale up your business.

Better focus and effective time management

Being self-aware means knowing what you want to do and when. This is an invaluable technique that can help propel your business to success.

When you’re self-aware, you can say no to things that don't matter and focus on things that can lead to business growth. Remember, business, as with life, is about being able to choose things that matter and saying no to things that don't truly matter.

Self-awareness doesn't only keep you motivated and focused, but it also helps increase business productivity.

Ideally, when you're more self-aware, you understand when you're at your best and have more energy to be productive. It also gives insights into what you need to do to boost productivity. In the end, these strategies can help you manage your time better.

Self-awareness helps take feedback positively

No one likes criticism, not even entrepreneurs. However, since feedback can be a source of invaluable insight for your business, being able to take it positively is advisable.

When you are self-aware, you can understand that feedback can help identify areas of your business you can improve for more productivity. In fact, insights from feedback and criticism can help you gain unique insights on how to run your business.

Types of self-awareness in business

Self-awareness is a fundamental technique for business owners. In this section, we look at the four types of self-awareness for business owners:

Self-awareness of strength

One of the crucial components of self-awareness is knowing your strengths. By discovering your strengths, you become aware of what you are good at, which helps focus your strengths on the associated work to increase productivity.

Here are some questions you can ask yourself to help discover your strengths:

  • What tasks do you like in your business?
  • On what types of projects do you receive a positive response?
  • What projects in your business make you feel energized?

Self-awareness of weakness

Discovering your strengths is good but not enough. To fully become self-aware, it's important to understand your weaknesses.

Knowing your weaknesses is as good as knowing your strengths because it gives insights into what you should focus your energy and time on and the projects you should delegate. Ultimately, this will help scale up your business and create better relationships with your collaborators.

Here are the steps that can help you know your weakness:

  • Ask other team members, friends, and family members to assess your performance and let you know what projects you are not good at. The insights you get will help you know your strengths and where you need to improve.
  • Create a column list of your strengths and weaknesses. Fill in the areas you are good at and those you lack with complete honesty.
  • Consider taking a personality test to discover your strengths and weaknesses

Self-awareness of your emotional triggers

Another crucial part of self-awareness is discovering your emotional triggers. While emotions are part of us, they should not define who we are. If you don't control your feelings, you will impact those around you negatively, and your actions won't be objective. Below are questions that can help you discover your emotional triggers:

  • How do you feel when you work with someone not qualified as you?
  • What do you feel when meetings take longer than you expected?
  • How do you feel when in one-on-one meetings with your team?
  • Do you feel anxious when you take on a huge client project?

Self-awareness of others' perception of you

Running a business involves interacting with other people more often. Whether it's your customers or colleagues, self-awareness gives insights into how others perceive you. As stated earlier, your emotions and actions will determine the actions of the people around you.

Self-awareness will help create a platform where you can understand other people's actions and stop being judgemental.

How to become more self-aware

Self-awareness is an invaluable trait that business owners should embrace for business success. But improving self-awareness requires time and effort and isn't an easy process. Here are tips to help you become more self-aware:

  • Pause and reflect: When handling an important task, for example, a presentation, reflect on what went well and what you could have done better.
  • Know your values: A crucial part of self-discovery is identifying and sticking to your core values. Document your values and consider them when making everyday business decisions.
  • Have an open mind: Your decisions shouldn't entirely depend on your emotional world. To be a successful business person, you should be sensitive to other people's emotions and be open to know new people and what they can offer. This will help promote team spirit and open room for new ideas and opportunities.
  • Be mindful of your limits: Business leaders should understand their strengths and weaknesses. Knowing your limits will help you focus your time and effort on things you can do well and seek assistance in situations you cannot handle on your own.
  • Set boundaries: As a business owner, you cannot always say yes to everything. Setting boundaries and saying no when needed will help preserve the integrity of your goals and efforts.
  • Embrace self-discipline: There's no success without discipline (whether in business or general life). Self-discipline and focus are crucial to become more self-aware and achieve business success.
  • Consider the impact of your actions: Don't just focus on your needs when making business decisions. You should also be aware of other people's feelings and emotions. Before taking action, consider the impact on the people around you.
  • Learn to trust your instincts: As a business person, you should embrace your intuition in decision-making and handle risks associated with your choices. Your instincts can help you navigate challenging situations and help develop trust in your decision-making capabilities.
  • Value feedback: It takes courage to ask for feedback from others. Learn to appreciate feedback from others to get a more insightful view of yourself.
  • Practice mindfulness: Spending time by yourself and listening to your inner self is crucial. Some self-listening techniques include meditation, mindful listening, or grounding.
  • Apologize when wrong: Self-awareness is about recognizing when you're wrong and apologizing. Whether you've hurt others with your emotions or have been hard to reach, asking for forgiveness is the best way to grow your personality and become more self-aware.

The above actions can help improve self-awareness and become more productive. However, it's important to note that self-awareness isn't a one-day affair but something to work on over time.

When you constantly focus on becoming more self-aware, it will become a habit that will benefit your business in the long run. No matter the level of self-awareness you are at the moment, realizing that being self-aware is key to business success will help accelerate your efforts to take the right steps.