In response to the growing implementation of autonomous work arrangements, firms are investing more resources into nurturing self-leadership skills among their employees. While this stark shift towards self-leadership is omnipresent in practice, we still know very little about the effective connection between self-leadership and organizational performance. This study addresses this gap by bringing insights from goal-framing theory and microfoundations to the field of self-leadership. The proposed model showcases how self-leadership can translate into an organization's collective productive energy through cognitive, behavioral, and emotional pathways, thereby impacting firm performance. However, the study also reveals that because of its hedonic and individual gain-oriented nature, self-leadership does not automatically lead to enhanced productive energy and firm performance. Instead, CEOs must align individual’s self-leadership efforts with common goals though visionary leadership in order to create firm-level value. The model is tested using data from over 9,000 employees and top management teams in 86 German SMEs. Analyses were carried out using multilevel structural equation modeling techniques. The results suggest a significant and positive indirect effect of self-leadership on firm performance in environments in which CEOs demonstrate strong visionary leadership. Conversely, this effect is nullified in firms with lower degrees of CEO visionary leadership. This research is pioneering in its exploration of the firm-level outcomes of self-leadership and in identifying the conditions under which these emergent processes come to fruition.
