As a business owner, you're used to making decisions, trusting your gut, and leading the way. You might even believe you know yourself better than anyone else – your strengths, your weaknesses, how you operate best. But what if that belief is holding you back? What if, like many of us, you're actually a poor judge of yourself?

Consider this: Even with a master's degree in education and over 12 years of teaching experience, I faced a surprising challenge. When I designed lessons based on proven, evidence-based methods, my students often pushed back. They insisted they didn’t learn well that way. "We know how we learn," they'd say, "and your style of teaching isn't it!" In fact, my students thought that PowerPoint lectures and direct presentations were best because they felt easy to understand. They also believed that simply rereading their textbooks or notes was the most effective way to learn.

However, the very fact that the learning felt easy often meant my students weren’t actually learning deeply. In reality, we learn best with some friction – some reason to cause us to struggle with the information. This struggle helps our brain make sense of the information and organize it in a truly useful way.

My point here isn't to tell you the best way to learn (though it's a topic I could discuss for hours!). My point is that sometimes we are absolutely sure we know ourselves best, but in reality, we don’t. Studies have consistently shown that people think they know the best way they learn, but when tested, their preferred methods often aren't the most effective ones.

This isn't just about learning. Likewise, we often think we know our personality, our strengths, and our weaknesses, but we don’t. All of our thoughts and emotions can cloud our perception of who we are. An outside observer, who sees our true actions, is often a better judge of who we really are. Consider someone you know who insists they don’t like pizza, yet you’ve seen them enjoy it multiple times. Or perhaps someone who claims they struggle to fall asleep, yet you’ve witnessed them fall fast asleep as soon as their head hits the pillow.

The research shows that we inaccurately estimate our abilities.

We are poor judges of our own personality.

We don’t even really know what will make us happy.

​As a business owner without a boss or a board to report to, this lack of accurate self-perception can be dangerous when we trust solely on our own mind.

To save our brain from constantly working to figure out the meaning of every situation, we create shortcuts, or cognitive biases. Basically, the biases are assumptions which may or may not be true, and they can lead us to misjudge our own abilities and traits.

​Here are biases that can have significant consequences in business and life.

Overestimating Our Abilities

Self-assessment bias is a common tendency to inaccurately estimate our own abilities, often leading to overconfidence. Even worse, it seems the less ability we have in an area, the more likely we are to overestimate our ability.

As owners, that could be dangerous for our business. We need to have understanding of many fields: finances, legal, marketing, HR, operations, etc. all in addition to our field of expertise in our business. Obviously, we can’t be experts in all these areas, but our lack of knowledge could cause us to make decisions and take actions with catastrophic results, thinking we knew enough to act on our own.

Overestimating our knowledge

As I mentioned with my students, they thought PowerPoint lectures and direct presentations were best because it felt easy to understand. They also thought that rereading the book or their notes was the best way to learn.

Numerous studies have shown a significant lack of connection between what students think they've learned (their perception of learning) and what they actually know (their real knowledge gains).

​As business owners, we can’t say we understand a topic because we read a book, took a course, Googled it or heard a podcast on the subject. We need to actually put it into action and integrate it into our knowledge base which means we keep connecting to it and using that information (one of the reasons I write a blog!!

Misunderstanding our Personality and Strengths

People often don't know themselves as well as they think they do. Our current thoughts and feelings and experiences color our own view of ourselves and our interpretation.

The widespread nature of inaccurate self-judgment isn't just an interesting psychological fact; it leads to systematic errors in thinking that can have significant and far-reaching consequences for your business.
​When you're the owner, your self-perception directly shapes your business's direction and success.

Misjudging Your Own Abilities

You might have over-confidence in your ability to solve the problems facing your business and be reluctant to ask for expert assistance when you need it. This can lead to frustration, dissatisfaction, or relying on incorrect, ineffective methods.

On the other hand, you might under-estimate your abilities to take on new products or markets. We often don’t recognize our strengths because things that seem easy to us don’t seem special. However, we miss what sets us apart and others may struggle with.

​Both of these miscalculations can limit the growth and potential of your business.

The Peril of "I Know Best" in Leadership

Additionally, you may think that as the owner, you know better than your employees how to run your business, but you don’t!

For example, the school district I worked in suffered from high employee turnover. The higher-ups knew they didn’t have competitive salaries, and it's an expensive county to live in. Furthermore, many exiting teachers gave salary as the reason for leaving. However, in speaking with the 20+ teachers I knew who left, none of them left for salary reasons. In fact, many, like me, took the job knowing and accepting the low pay, but they were dedicated public servants and believed in the cause of education. Instead, their reasons for leaving were tied to the lack of control over their work, the lack of respect from administrators and parents, or the impossible list of requirements from higher-ups.

Because the higher-ups thought they understood the problem, they weren’t addressing the root causes, and the problem persisted. Even with salary increases, turnover remained high.

The principals, school districts, and legislators all come up with mandates, thinking they know better, but study after study shows that those closer to the students know best how to deal with issues in education. The very fact that the ‘higher-ups’ are making decisions without the participation of those involved in the work also serves to undermine any initiatives, but that is another conversation.

The most dangerous situation is the Dunning-Kruger effect, when we have a low ability and grossly overestimate our ability. In this case, we actually know so little that we don’t realize how far off the mark we are. Not only are we incompetent, we don’t realize that we are, so we take strategies and risks that are doomed to failure.

​The challenge for business owners is to recognize that what you think you know may not be the reality your business faces.

Given how common inaccurate self-assessment and self-knowledge are, there are several powerful strategies you can use to develop a more realistic and accurate view of yourself and your business. These often involve looking beyond your own internal thoughts and seeking external perspectives.

​By actively working on these areas, you can gain clearer insights and make better decisions.

Journaling: A Path to Deeper Insight

A regular journaling process allows you to go a bit deeper and perhaps uncover the truth.

Seek Objective Feedback: The Power of Outside Eyes

Conduct Audits: Time and Money Reveal All

Audits provide objective data that can bypass your self-perception biases, giving you a clearer picture of reality.

We all have trouble seeing ourselves clearly. This happens because our minds can trick us, we want to protect our self-image, and it's just hard to understand ourselves completely. Throughout this post, we've seen how we often get things wrong about ourselves - like how well we're learning, what kind of person we are, and what we're capable of doing. While we might never be able to see ourselves perfectly clearly, we can definitely get better at it. All it takes is regular practice and effort to improve our self-awareness.

Getting to know yourself better isn't just a nice-to-have - it's essential for your business. When you truly understand who you are and what your limitations are, you learn and grow how to make better decisions and develop the skills to succeed in your business. By recognizing that we all have blind spots about ourselves and using simple tools like journaling and asking for feedback, you can build a clearer picture of who you are. This leads to running your business better and feeling more fulfilled in your work.