I was sitting in a team meeting at my financial services company with about eight people around the table. We were deciding on high-level strategic items that required full presence. My COO, seated at the far end, was physically present in his chair. Mentally and emotionally though, something was missing. This confusing energy radiated and was unmistakable.
It didn’t matter who was talking or what was being discussed. He was clearly stressed about something, unable to step away from tactical chaos.
If my COO, a trusted senior leader and one of the smartest men I know, could slip into that state without realizing it, anyone could. And when leaders operate from the wrong emotional place, the ripple effects spread across the entire team.
That’s when I realized leadership depends on the state we’re operating from when we think and act.
After years of scaling companies and coaching elite CEOs, I’ve mapped what I call the Inside-Out Leadership Matrix. Two axes define it: how much thought you’re giving to decisions (patience and calm) versus how quickly you’re acting (ambition and decisiveness).
This is where we all want to operate. You’re thoughtful, weighing time sensitivity against importance while executing with purpose rather than panic. You’re in a flow state, making wise decisions that are neither too quick nor too slow. This is the green zone.
Here, leaders give too much thought without acting. I recently walked an employee through this quadrant, and she admitted she sometimes overthinks things, lacks confidence in her decisions, and doesn’t trust her gut. This is commonly known as analysis paralysis.
The result becomes reactive leadership. Decisions bubble up until you’re forced to act immediately without the thoughtful processing you could have done earlier. This is the yellow zone.
This is the red quadrant, and thankfully the least common.
Leaders here lack both ambition and due thought, operating with a nonchalant attitude that lets life happen to them rather than for them. This creates chaos not just in their own heads but across their teams, and disaster usually ensues when someone stays in this state for too long. This is the red zone.
These leaders have no problem making decisions and they’re ambitious go-getters, but they haven’t given due thought to the process. They’re focused on checking boxes for that short-term dopamine hit rather than thinking through the journey.
I lived in this quadrant during my first tax season after acquiring a CPA firm. An employee quit mid-season with 200 returns to complete, and racing against time, I plowed through over 100 returns while barely pausing at each input box. I finished way early.
Then came the self-audit. I had so many errors that I spent twice the time going back to fix everything, and if I’d given more thought initially, I would have gotten it right the first time. Working faster didn’t create more time. It created more work.
When leaders operate in this quadrant with anxious ambition, their teams pick up on it. If you’re always acting to get things done but not listening to your team or taking their input, employees assume that’s the standard. They start mirroring that frantic energy because you’re the one steering the ship. The biggest challenge is self-awareness as the leader, recognizing when your foot-on-the-gas approach is creating overwhelm rather than momentum. If not careful, this yellow zone can transform into a red zone.
Through coaching dozens of leadership teams, I’ve learned to watch for three early warning signals.
When you’re self-aware and present yourself, you can spot the shift in your team.
With my COO in that meeting, it wasn’t just one moment. There was this persistent negative energy regardless of who was speaking or what topic we covered. When you see that pattern consistently, something deeper is going on and it means something else is on their mind.
I created this word for a reason. It describes the downward spiral leaders create by projecting awful outcomes into the future, then bringing that anxiety back to the present.
Stress and anxiety work by taking a current situation, imagining negative future outcomes, and then internalizing those imagined results as if they’re happening now. When you constantly awfulize situations, you can’t see the forest from the trees because you’re acting to avoid something that likely won’t even happen.
I’m working with a company right now where one of three co-founders constantly operates from fear, convinced everything is crumbling. His awfulizing doesn’t just spiral him, it stresses out the other two founders who are actually solving problems and growing the business. That negative energy became so toxic that the other two are now buying him out.
This is usually the easiest signal to spot. If you’re a servant leader who has built trusted relationships, employees will come to you with concerns not to gossip but to get guidance, because they see something in a teammate that’s not typical. Maybe that person is acting differently with coworkers than with leadership.
Your employees lead for you. Listen when they raise concerns.
When you spot these signs in yourself or your team, the first step is naming the pattern. That employee I mentioned who was overthinking had one conversation where she identified her own pattern, and that self-awareness alone helped her move back toward balance.
While self-awareness opens the door, it’s really a deep sense of purpose that carries you through. If leaders are overworked and overstressed, it doesn’t matter how logical your solution is. You can say one plus one equals two, do these steps and get this result, but if the purpose isn’t there, logic means nothing.
They need to figure out what’s going on within themselves. For me, that meant developing a meditation practice and establishing a stronger relationship with myself. If you don’t have a sense of purpose, you haven’t been spending enough time with yourself.
My second family core value, created by my 24-year-old, captures this perfectly: Balance brings Zen. When you approach this decision-making model with balance, the result is a peaceful state with positive outcomes, less stress, confidence, and clarity.
True inside-out leadership means recognizing when you’ve drifted into the yellow and red quadrants and having the self-awareness to find your way back to green.
David Miller is the founder of Alchemy of Scale, where he helps entrepreneurs unlock both the method and the magic required for business growth. He previously scaled multiple companies and now coaches elite growth-seeking CEOs and their teams.