Leadership – Self-awareness versus self-efficacy
Is knowing your strengths and limitations more important than having confidence in your actions?
Self-awareness is regularly described as one of the foundations of effective management and leadership and it’s easy to understand why.
Leaders need to recognise their strengths and limitations, understand their emotional triggers, appreciate how their behaviour affects others and remain open to feedback. Without this insight, even technically capable managers can unintentionally undermine trust, motivation and performance.
However, there is another construct that may be just as important—and perhaps even more directly connected to whether a leader succeeds.
That construct is self-efficacy: the belief that we are capable of taking the actions required to manage a particular situation or achieve a particular outcome. This raises an interesting question:
Is it enough for leaders to understand themselves, or is believing they can act effectively ultimately more important?
The answer may lie not in choosing between self-awareness and self-efficacy, but in understanding how the two work together.
Self-Awareness Helps Us See Ourselves More Clearly
Self-awareness involves understanding who we are, how we behave and how others experience us. Internally, it includes recognising our values, emotions, assumptions, strengths, weaknesses and habitual responses.
Externally, it involves understanding the impact we have on other people. This is often where the greatest leadership blind spots occur. A manager may see themselves as decisive, while others experience them as controlling. They may believe they are providing helpful direction, while their team experiences micromanagement.
Research into self–other rating agreement has examined the relationship between how leaders evaluate themselves and how they are evaluated by others. In one study involving more than 2,000 managers, leaders were grouped according to whether they overestimated, underestimated or accurately assessed their effectiveness compared with the ratings of their employees. (ScienceDirect)
The implication is important: leadership effectiveness is not determined solely by our intentions. It is also influenced by whether we accurately understand the effect of our behaviour. Research exploring the experience of working for leaders with low self-awareness has also associated a lack of awareness with behaviours such as micromanagement, poor conflict management, unwillingness to listen and an inability to recognise the negative impact being created. (sajbm.org)
Self-awareness therefore acts as a form of leadership navigation. It helps us recognise where we are, understand how we arrived there and identify where an adjustment may be required. But navigation alone does not create movement.
Self-Efficacy Turns Intention into Action
Self-efficacy is commonly treated as another word for confidence, but the concepts are not exactly the same. Confidence can be broad and general: “I am a confident person.”
Self-efficacy is usually more specific: “I believe I can successfully handle this difficult conversation,” or “I believe I can lead my team through this change.”
The American Psychological Association describes self-efficacy as a person’s belief in their capacity to carry out the behaviours required to produce a particular performance outcome. (American Psychological Association)
This belief matters because leadership constantly requires people to act without complete certainty. Managers must make decisions, address poor performance, give feedback, manage conflict, communicate change and accept responsibility for outcomes. A leader may understand exactly what needs to be done but still hesitate if they do not believe they are capable of doing it successfully.
This is where self-efficacy becomes particularly important.
Self-awareness might tell a leader: “I tend to avoid conflict because I am uncomfortable with the emotional reaction of others.”
Self-efficacy determines whether the leader believes: “Even though this conversation will be uncomfortable, I am capable of handling it constructively.”
One creates insight. The other creates agency.
The Argument for Self-Efficacy
There is a persuasive argument that self-efficacy may be more directly connected to performance than self-awareness. Knowing that we need to change does not mean that we will change.
A leader may be highly aware that they need to delegate more, communicate more clearly or become more visible during uncertainty. Yet if they doubt their capacity to do these things successfully, awareness may result in little more than informed hesitation.
By contrast, leaders with strong self-efficacy are more likely to approach difficult tasks, maintain effort and persist when they encounter setbacks. A major meta-analysis examining 114 studies and more than 21,000 participants found a meaningful positive relationship between self-efficacy and work-related performance. (ResearchGate)
This does not mean that believing we can succeed guarantees success. Competence, resources, opportunity and context still matter. It does suggest, however, that capability is less likely to be applied when people do not believe they can use it effectively.
A manager might possess the knowledge required to lead change, but low self-efficacy may cause them to delay decisions, avoid resistance or become overly dependent on senior leaders. Similarly, a technically capable employee may avoid applying for a leadership position because they do not see themselves as someone who can lead.
From this perspective, self-efficacy is not simply an attractive personal quality. It is the mechanism that helps convert ability into behaviour.
But Confidence Without Awareness Creates Its Own Risk
The case for self-efficacy should not be confused with an argument for unlimited confidence.
Confidence is only useful when it remains connected to reality. A leader with high self-efficacy but low self-awareness may act decisively while failing to recognise their limitations or the consequences of their behaviour. They may speak with certainty, resist feedback and assume that poor outcomes are caused by other people.
This is not grounded self-efficacy but rather uncalibrated confidence. And whilst such leaders may initially appear impressive; making decisions quickly, communicating assertively and projecting certainty, over time, the difference between their self-perception and their actual impact becomes increasingly visible.
When confidence is not moderated by self-awareness, it can become arrogance rather than assurance, dominance rather than leadership or even stubbornness rather than persistence. Self-awareness provides the reality check that confidence sometimes needs. The objective is therefore not simply to increase confidence. It is to develop confidence that is informed by evidence, reflection and feedback.
Four Leadership Positions
The relationship between self-awareness and self-efficacy can be understood through four broad leadership positions.
High Self-Awareness and High Self-Efficacy: Grounded Agency
These leaders understand their strengths, limitations and impact while also believing they can respond effectively. They are willing to act, but they are equally willing to listen and adjust. They can acknowledge a mistake without losing confidence and accept feedback without becoming defensive. This is arguably the most productive combination: confidence grounded in reality.
High Self-Awareness and Low Self-Efficacy: Informed Hesitation
These leaders often understand what needs to change but doubt their ability to make the change.
They may be thoughtful, reflective and highly conscious of their limitations. However, that awareness can become excessive self-monitoring or self-doubt. They know what effective leadership requires but hesitate to step forward. For these leaders, more reflection is not necessarily the answer. They may need practice, encouragement, experience and opportunities to demonstrate capability.
Low Self-Awareness and High Self-Efficacy: Uncalibrated Confidence
These leaders believe strongly in their ability but have an incomplete understanding of their behaviour or impact. They may dismiss criticism, overestimate their competence or repeat ineffective approaches because they are convinced the problem lies elsewhere. Their confidence creates action, but their lack of awareness prevents learning.
Low Self-Awareness and Low Self-Efficacy: Avoidance and Stagnation
These leaders have limited insight into what they need to improve and little belief in their capacity to manage difficult situations. They may avoid responsibility, remain dependent on others and interpret challenges as evidence that they are not suited to leadership. Development begins by helping them see their behaviour more clearly while creating safe, achievable opportunities to experience progress.
Perhaps the most useful way to understand the relationship is through a simple metaphor.
Self-awareness is the steering wheel. Self-efficacy is the engine.
The steering wheel provides direction. It helps the leader recognise what needs to change and adjust their behaviour accordingly. The engine creates movement. It provides the belief, energy and persistence required to act. An engine without steering may produce speed but little control. Likewise, a steering wheel without an engine may provide direction but no progress. Effective leadership requires both.
How Leaders Can Develop Both
The development of self-awareness and self-efficacy should not be treated as two separate processes. Each can strengthen the other.
Build awareness through external evidence
Reflection is valuable, but reflection alone can reinforce an inaccurate self-image. Leaders need information from outside themselves. This may come through 360-degree feedback, employee surveys, coaching, performance data, observation or direct conversations with trusted colleagues. The objective is not to accept every piece of feedback as fact. It is to identify patterns and understand where intention and impact may differ.
Make self-efficacy specific
Instead of asking, “Am I a confident leader?”, ask more focused questions. Self-efficacy is often situational. A person may feel highly capable in operational management but far less capable when presenting to executives or addressing interpersonal tension. Specificity allows development to be targeted.
Create mastery experiences
Albert Bandura, Canadian American psychologist and professor, identified successful performance—or mastery experience—as a particularly important source of self-efficacy. He also identified observing others, encouragement and the interpretation of emotional and physiological reactions as additional sources. (educational-innovation.sydney.edu.au)
For leaders, this means confidence is most effectively developed through experience rather than reassurance alone. A manager becomes more confident in difficult conversations by preparing for them, conducting them and reflecting on what worked. They become more confident presenting to senior executives by starting with smaller presentations and gradually increasing the level of challenge.
Confidence becomes sustainable when it is supported by evidence.
Use reflection to convert experience into learning
Experience does not automatically produce development. After an important leadership moment, consider:
What did I expect would happen?
What actually happened?
What did I handle effectively?
Where did I become uncertain or reactive?
What feedback did I receive?
What will I do differently next time?
This process strengthens self-awareness while also building a realistic record of capability.
Treat discomfort as information, not a verdict
Leaders sometimes interpret nervousness as evidence that they are not capable. But discomfort may simply mean that the situation matters, is unfamiliar or requires growth and self-awareness helps us recognise the discomfort. Self-efficacy helps us avoid treating that discomfort as a reason to withdraw.
So, Which Matters More?
If leadership success depended only on understanding ourselves, self-awareness might be enough, but leadership requires action.
It requires people to step into uncertainty, make decisions, engage in uncomfortable conversations and remain persistent when outcomes are not guaranteed. For that reason, there is a credible argument that self-efficacy is the more immediate driver of leadership behaviour and performance. Yet self-efficacy without self-awareness can become dangerous. Confidence that is detached from feedback and evidence can create blind spots, damage relationships and reduce a leader’s willingness to learn. The question is therefore not whether leaders need self-awareness or self-efficacy. They need enough self-awareness to understand themselves accurately and enough self-efficacy to act on what they discover.
Self-awareness makes leadership development possible.
Self-efficacy makes leadership development actionable.
The most effective leaders do not simply know themselves, and they do not simply believe in themselves. They develop the grounded confidence to recognise what the situation requires, understand the impact they are having and believe they are capable of taking the next constructive step.
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