There must be some dire consequences to self-deception if one logically concludes that it’s a bad thing. Avoiding the truth or outright lying to oneself has corrosive and self-destructive effects on one’s psyche. Such practices have external consequences as well. Trust erodes between people if one side detaches itself from reality. Just like the liar who must keep track of the fiction they create, the self-deceiver must be careful to wrangle all of the invented details, so they don’t get caught. If they are discovered, the follow-up costs incurred in their relationships with others in the organization may be severe.
Detachment from Reality
One who lies to others often does so to gain some material or concrete benefit. One who lies to themselves, on the other hand, can’t really expect to gain something someone else possesses. Internally then, self-deception damages the person. Externally, if it comes to light that a leader is deceiving themselves, that leader loses credibility. Overall, a leader who self-deceives becomes detached from reality and appears as incapable of objectively appraising themselves and events transpiring around them.
The external damage caused to leaders who practice self-deception, like damage to reputation, can be preceded by their internal creation of a self-serving reality. Overall, the cost of self-deception is the person’s misapprehension of reality, particularly social reality. The mind constructs a false, self-serving image of reality while at the same time blocking accurate information from being received. When followers discover this deficiency in their leader, they may then see them as remote, dismissive of others’ opinions, insincere, manipulative, and unwilling to consult with colleagues. Trust in the leader is eroded, and lines of communication are damaged or severed.
Inefficient Mental System
Another consequence of one’s detachment from reality is the damage caused to the information flow process. Cognitive biases are present at all levels of the process, from the receiving of information to the digestion and analysis of information and to the recall of information used to make decisions. The self-deceiving leader creates a false social construct that meets their internal needs that then filters out information that could contradict their reality. The result is an inefficient, fragmented mental system used to process and utilize information. To right this process, leaders must get to know people and see the humanity in others if they wish to dispel their cognitive biases.
And a Whole Lot More…
That’s not all. Self-deception, just like trying to lie, can result in stress, guilt, and shame. The self-deceiver, if discovered, may end up losing the trust of colleagues, reduced social desirability, and possible retribution from the organization. Communication suffers following the erosion of trust between leaders and subordinates. Followers either hide their dissenting voices over a fear of retribution by the leader, or their opinions are marginalized because they do not match the leader’s perspective. When leaders only prefer positive upward feedback that is in line with their perceived reality, open debate is suffocated, and subordinates refrain from raising problems or acknowledging mistakes. Followers who buck the system preferred by the leader may be labeled as troublemakers or saboteurs if they try and resist the false world created by the self-deceiving leader.
Fundamental Changes to the Self
The costs of lying and self-deceiving can be short-term and easy to overcome by owning up to the social transgression. The self-deceiving leader can also suffer life-altering, more permanent effects. If one believes that the ability to deceive others has evolved to help with self-preservation, then it can be argued that this powerful cognitive tool can be turned upon oneself. Because the human mind has developed the ability to tolerate inconsistencies between the information in the conscious and unconscious mind, this self-preservation mechanism may end up fundamentally changing the person.
Take, for instance, a scenario posed by researchers Petter Johansson, Lars Hall, and Peter Gardenfors. They argued that it’s possible to get someone to reverse their preferences by making them openly endorse an alternative explanation, whether they are convinced of the possibility or not. Therefore, it is possible when someone uses self-deception to deceive themselves as a means to then deceive others, they are changing what they believe about an outcome. Step-by-step, it goes like this: a leader tries to convince a follower that they, the leader, prefer outcome “A” over outcome “B.” The leader can better accomplish this if they actually believe they prefer outcome “A” over outcome “B,” and not the other way around. Once they convince themselves of this, it’s easier for them to convince the follower. As a consequence, the leader may end up believing, at all levels of processing, that they really prefer outcome “A.” The conscious part of the person changes the unconscious part. The person persuades themselves through self-deception that they actually believe the fiction they created to satisfy their ego or goals. 
A major detriment of self-deception to a leader is the erosion of trust experienced in their relationship with subordinates. Such leaders also suffer a diminished information processing capability due to their tampering with the process. Self-deception may become more difficult to turn on and off as the leader may suffer the consequences of changing their beliefs to satisfy a deception.
self-deception detaches one from reality
self-deception leads to an inefficient, fragmented mental system used to process information
by using self-deception as a means to deceive others, the self-deceiving leader may change their beliefs about the potential outcome of an action or scheme
 Bok (1989)  Frankish (2011)  Kuntz and Dehlin (2019)  Trivers (2006)  Collinson (2012)  Trivers (2006)  Cozzens, C., in discussion with the author (February 2021)  Williams et al. (2009)  Collinson (2012)  Collinson (2012)  Von Hippel and Trivers (2011)  Johansson et al. (2011)