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The High Cost of Low Self-Awareness in Leadership

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The best way to deal with delusional people in the workplace.

For years, I've been coaching leaders who are often on top of their game but find themselves tripping over one common obstacle: self-awareness.

A lack of self-awareness can be risky at best and disastrous at worst.

The term "self-awareness" can be as elusive as it is ubiquitous, but I like Dr. Tasha Eurich's definition in her book, "Insight: How to Succeed by Seeing Yourself Clearly." She describes self-awareness as:

The ability to see ourselves clearly - understand who we are, how others see us, and how we fit into the world around us.

Self-awareness isn't one truth. It's a complex tapestry woven from various threads of information.

In my coaching practice, a recurring theme is helping clients manage or engage with individuals suffering from low self-awareness, which negatively affects those around them. These individuals often misinterpret constructive criticism as a personal affront, responding with volatile outbursts directed at their team, peers and even manager. They mistakenly draw the wrong lessons from good outcomes. They think their abrasive, erratic, egotistical approach drives high team performance. Whereas the team's success often will be despite those behaviours. If asked, they wouldn't need to change. Everyone else is the problem.

I often use the term delusional to describe these people. A tad harsh? Maybe. But actually, I am being kind by cutting through the noise and getting to the crux of the issue.

Here are some examples of delusional people that my clients have had to interact with. In each of these cases, I have worked with my clients on the different ways to manage the impact the delusional personalities had on their teams, their own emotional well-being, and the best ways to engage and try to influence these, at times, toxic personalities.

Jean, the Treasurer - Jean was a senior new hire brought in to help solve a problem that, if not resolved, could lead to significant regulatory penalties. Jean transitioned into a new firm with a culture and way of doing things different from her previous experience. Her belligerent, coercive leadership style may have achieved short-term wins, but it damaged budding relationships. Jean refused to accept alternatives and potentially better ways to solve the issues, leading to unnecessary conflict and less strategic solutions. She was aware of the impact her actions were having on those around her, but while aware, she didn't care. She perceived her approach as the driver of high performance, whereas anything positive happened despite Jean's behaviour.

Sam, the Commercial Director - In Sam's mind, he couldn't do anything wrong. It was his talent and skills that drove the team's results. Any question for clarification or suggestion to do something different was taken as a personal attack. Sam would react emotionally to the perceived threat to his beliefs, generating erratic and highly emotional outbursts directed at his team and peers. People like Sam draw the wrong lessons from good outcomes. They think their abrasive, unstable, egotistical approach drives high performance from those around them. However, their success will often be despite those behaviours. If asked, they wouldn't need to change. Everyone else is the problem. The result is that even Sam's boss tiptoed around him and tried to appease him. Yet, the strategy of appeasement just kept making things worse for Sam's peers and the team, as he was completely unaware and refused to accept that his behaviour was the source of the demotivated, distracted and increasingly dysfunctional team.

Rich, the Salesperson Rich was excellent in his job and was consistently one of the top producers in his division. Yet Rich was not inclusive. He was a loner. Viewing any success was due to his knowledge and skills. Rich would refrain from proactively sharing information or keeping his boss informed on discussions with clients or the status of deals. He operated as a team of one within the business. However, Rich could be made more aware of how his actions were detrimental to his longer-term career success - that the reason he didn't make Managing Director was due to his selfish actions - so he could and should change his behaviour.

A lack of self-awareness can be risky at best and disastrous at worst. People fail because of how they act in certain situations. Especially under stress, they respond with a pattern of behaviour that can sabotage themselves and their teams.

To consider an alternative view, you must be willing to consider an alternative version of yourself.

Often, the focus for my coaching with clients who have to manage or engage with people like Sam, Jean and Rich is to provide the support necessary to help talk them "away from the edge". As well as helping them to alter their perspective to cut adversity down to size and build their resilience and hence their capacity to face, overcome, recover quickly, and be strengthened by adversity. My clients often beat themselves up because this type of person can be the first obstacle they haven't successfully overcome in their careers. Rational arguments and respectful negotiation won't work with delusional people who play to different rules:

  • While you try to discuss interests, they state their position in unequivocal terms.

  • You may be concerned with developing possible agreements to maximise the gains of both parties - they attack your proposals, only concerned with maximising their own gains.

  • You may attack the problem on its merits - they attack you.

Why it is essential to care and do something about the problem.

In the workplace, delusional people aren't just annoying and frustrating. They can significantly hinder our performance.

Unaware people have a detrimental impact on their employee's job satisfaction, performance, and well-being. The negative impact leads to a lack of trust, and a lack of trust is a hidden tax that magnifies conflict and reduces the opportunities that lead to successful win-win outcomes.

And remember the example you set for those around you by not dealing with this behaviour. Especially the more impressionable, less experienced team members who may be forgiven for thinking that the behaviour they observe is perfectly acceptable within your organisation. Emotional contagion is the phenomenon of having a person's emotions and behaviours influenced by another. Emotional contagion within the workplace embodies the idea that we synchronise our emotions and behaviours with what we are exposed to. Therefore, there is a risk that we catch the delusions of others and perpetuate the bad behaviour.

In the seminal book "GOOD TO GREAT", Jim Collins refers to the moment when you feel you need to tightly manage someone as when you know you need to make a people change and act.

As the boss, we've probably all experienced or observed the following scenario: delay, try alternatives, give third and fourth chances, hope the situation will improve, and build systems to compensate for the delusional person's shortcomings. When not in the office, we find our energy diverted by thinking and talking to friends about that person. All that time and energy is siphoned away from developing and working on opportunities and top priorities.

In GOOD TO GREAT, there is the concept of having "the right people on the bus." Letting the wrong people hang around is unfair to all the right people in your team, and it can drive away the best people. In the scenario where you are the boss of the delusional person, two key questions can help you know when you need to act:

  • Would you hire the person again?

  • If the person resigned, would you feel disappointed or secretly relieved?

If you answer NO and NO, it is time to try a different approach to solving the issue.

The different types of delusional people in the workplace.

In her book Insight (How to Succeed by Seeing Yourself Cleary), Dr Tasha Eurich identifies three categories of delusional people.

1 - The lost cause will never accept feedback as correct because of a complete lack of insight and self-awareness. The lost cause sees themselves as pretty close to perfect and is rarely willing to entertain the notion that they might have room to improve. It can be pointless to challenge their self-views. Sam, the Commercial Director, fits this category of a delusional person.

2 - Aware but don't care - they are aware of the negative impact they have on others. Still, they will carry on regardless, believing their approach and their behaviour will help them get what they want. And therein lies their delusion because they draw the wrong lessons from good outcomes. Often, their success to date has been despite their delusional behaviour. Jean, the treasurer, was aware but didn't care - their win-lose mindset was a constant source of tension and conflict because it wasn't being addressed.

3 - Nudgable - these people can be helped. What sets the Nudgable apart is that they want to be better and are willing to try. They just don't know that they need to change their approach. Rich, the high-performing salesperson, was in this category - he was "unconsciously incompetent", but it is often possible to increase people like Rich's self-awareness, so they become "consciously incompetent". Then, the task is to help them develop the skills or change their interpersonal behaviours to become "consciously competent" and, hence, no longer suffer from delusions.

Why don't people deal with it?

In her book "Wilful Blindness", Margaret Heffernan refers to the Ostrich instruction and being deliberately ignorant. Paraphrasing the author:

"Scientifically accurate or not, we all recognise the human desire at times to prefer ignorance to knowledge and to deal with conflict and change by imagining it out of existence. Ignore it, and it will disappear - that's what we think and hope. We also try hard to avoid conflict: if the threat's not there, I don't have to fight it. A preference for the status quo, combined with an aversion to conflict, compels us to turn a blind eye to problems and conflicts we just don't want to deal with."

In business, it is common to embrace the status quo. The gravitational pull is strong - it feels more manageable and lower risk. Often, we don't like change because the status quo feels safer; it's familiar, and we're used to it. Change is hard. As the author says, "Every change carries with it the possibility of conflict, uncertainty, danger. The business environment is dynamic and difficult enough without looking for trouble."

  • People often stay silent at work because they don't want to provoke conflict.

  • Often, executives don't want to raise the issue because they don't know how to solve it.

But as long as the issue is not raised and discussed, it is guaranteed to remain unsolved. That is the cost of the ostrich behaviour. You cannot fix a problem that everyone refuses to acknowledge.

Bringing someone around who may not want to change.

Delusional people can be a constant source of tension and conflict in the office if not dealt with. But the truth is that challenging a delusional person can be risky at best and disastrous at worst. Almost everyone thinks they're above average, and the most delusional can be the least receptive to hearing otherwise.

Successfully dealing with delusional people is perhaps one of the most challenging problems facing leaders. As mentioned, my clients often beat themselves up because this type of person can be the first obstacle they have yet to overcome.

To help any delusional person, you need to ask several questions before jumping in:

  • Do the benefits of having this conversation outweigh the potential risks?

  • Is their behaviour counter to the firm's best interests?

  • Which of the three categories do they fall into?

1 - The Lost Cause

As Dr Tasha Eurich, author of Insight, says, "It is easy to feel hopeless when dealing with this type of person. While we can't impose Insight on lost causes, we can minimise their impact on our success and happiness. Recognise they are on a different journey to you and don't constantly get bent out of shape." The reality is that sometimes this person may not be your problem to fix - it can be theirs and theirs alone.

Look for and focus on their positives. What is it that they do well, even if outside of your interactions together?

Reframe their impact on you, such as what I can learn from the way they do things, both things to copy and things to avoid doing.

Don't fight them, counterattack or defend, but like a negotiator, when one party is unwilling to negotiate in good faith, break the vicious cycle by refusing to react. Instead of pushing back, sidestep their remarks and deflect them back against the problem.

2 - Aware, Don't Care

We must learn to manage our reactions and emotions when dealing with people like this. The approaches to deal with the Lost Cause also work with the Aware Don't Care. Another approach is to imagine their behaviour, and nasty comments are said in a cartoon or clown-like voice, which is a powerful technique that helps people to live with a critical inner voice - having the ability to discriminate when the inner critic isn't helpful, and just noise is a valuable skill to develop. This skill also helps when interacting with the Aware Don't Care. By robbing the words of their meaning and power, we can learn to discriminate when dialogue is just noise and, hence, better manage our reactions. By managing our own reactions, we often have more control than we think.

However, sometimes it isn't enough, especially if the delusion intensifies over time. If we've exhausted all our options, we may decide to cut ties and distance ourselves as much as possible and then move forward.

3 - Nudgable

 As Dr Eurich says, "These people can be helped". What sets the Nudgable apart is that they want to be better. They just don't know that they need to change their approach. To help them, you need to ask several questions before jumping in:

  • Do the benefits of having this conversation outweigh the potential risks?

  • Do they know there is a problem?

  • Is their behaviour counter to their best interests?

  • Do I think they will listen to me?

It is often possible to help Nudgable people increase their insight, and it's never too late to begin.

Whichever category the person falls into (The Lost Cause, Aware, Don't Care or Nudgable), it is the boss's job to ensure delusional people don't disrupt the team. This type of person has to learn to work with others constructively and collaboratively.

At times, it can be a constant balancing act.

I advise keeping a debits (negative impact) and credits (positive contributions) list. You need to take action, possibly even terminating their employment if the debits are consistently greater than the credits.

You should never put up with people who cross one of the following three red lines:

  • Violate laws, company policies, or regulations.

  • Bully or intimidate others.

  • Engage in harassment of any kind.

Crossing any of these boundaries should result in swift termination. There are no shortcuts worth this risk; the consequences are unequivocal. Essentially, "go directly to jail; do not pass go, do not collect two hundred pounds."

The more complex cases are the ones where the person doesn't cross these lines.

I hope that this article helps normalise the challenges you may be facing with a delusional boss, team member, peer, or colleague. And by providing practical ideas to overcome these obstacles and reframe the problems to help you build resilience in the face of irrational adversity.

Final Thoughts.

Leadership is not just about guiding others; it's about being open to guidance ourselves. It's about cultivating resilience in the face of irrational adversity and being mindful of the impact we have on others. As leaders and coaches, we must strive for the insight that allows us to grow and help others do the same.

Let's connect if you are grappling with these issues or looking for strategies to enhance leadership self-awareness within your team or organisation. Follow me on LinkedIn and subscribe to my "Coaching Contemplations" newsletter at for more insights.

What strategies have you found effective in dealing with low self-awareness in leadership? Share your experiences. Let's learn from each other.

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