Self-awareness has become an important management buzzword. Research suggests that when we see ourselves more clearly, are more confident, make sounder decisions and communicate better. And in the world of work, that can result in more effective leaders with more satisfied employees and more profitable companies.

On a more philosophical side, self-knowledge is important, because it offers us a route to greater happiness and fulfilment. A lack of self-knowledge can leave one open to mistaken ambitions. Armed with the right sort of self-knowledge, we have a greater chance of avoiding errors in our dealings with others and in the formulation of our life choices.

Research done by The Eurich Group found that even though most people believe they are self-aware, self-awareness is quite a rare quality: they estimate that only 10%-15% of the people they studied fit the criteria. For starters, they identified two types of self-awareness.

Diving deeper: the dual dimensions of self-awareness

The first — internal self-awareness — represents how clearly we see our own values, aspirations, our fit with our environment, reactions (including thoughts, feelings, behaviours, strengths and weaknesses), and our impact on others. The research found that internal self-awareness is associated with higher job and relationship satisfaction, personal and social control, and negatively related to anxiety, stress and depression.

The second category — external self-awareness — refers to understanding how other people view us, in terms of those same factors as above. The research showed that people who know how others see them are more skilled at showing empathy and understanding others’ perspectives. (Watch Simon Sinek’s excellent presentation on understanding empathy.)