Identity is often thought as something static from which our actions follow. It's more helpful to see it as an effect that follows from our actions. This is especially relevant to notions of leadership capability.
We are constantly developing this identity through our actions. The real question is whether this process is accidental and by default, or whether we are actively developing it the way we would like it to be.
What you are is what you have been, and what you will be is what you do now.
– The Buddha
What is identity and how is it formed?
What's your identity as a manager, as a leader, or as a parent? All of us have notions, stories and constructs about what we are capable and not capable of. Some are helpful while others not so much.
Even when we are aware of our unhelpful stories, we don't examine our assumptions closely. We tend to take them for granted, as something that is unchangeable about us and something we have to live with. The sum total of all these ideas and constructs are what we might call “identity”.
We have different identities and assessments for all the roles we play. For example I might consider myself strong at parenting but weak leadership.
Where did these notions come from? And how can we go about changing them that creates more capacity for action?
Your whole idea about yourself is borrowed – borrowed from those who have no idea of who they are themselves.
Our identities in each of these roles came from both internal and external sources. There is an external social component and an internal personal component.
In the external versions, we built them based on how people responded to us in the past when we were infants, teenagers and as adults at work and elsewhere. Internally, we create interpretations of our failures or successes at various things that then get turned into coherent stories that we tell ourselves. 
Instead of delving in the psychology of identity formation, a simpler, actionable way of examining identity is to understand the ontology or in other words, the “being” of us humans.
Identity development from conversations
Bineham and Hyde describe identity as being formed from our conversations with ourselves and with others instead of a pre-existing entity.
What is the origin and function of identity? What is a “self,” anyway? For the most part, unthinkingly, [we] assume that the personal pronoun “I” indicates a substantial entity of some kind that inhabits [our] body.
It is vital, then, for [us] to consider that [our] body arrived on the scene before the “I” did, and that the “I” is, for the most part, [our] own creation. A human infant has no “I”—it has little or no sense of self, and no self-reflexive awareness. But as the infant’s inborn capacity for language and self-reflection begin to awaken, and she or he notices a perceiver at the center of the perceptions, the infant begins creating an identity for that perceiver, primarily in response to early interactions with significant others. Thus, as one’s world begins to have meaning, one designs an identity that is harmonic with the meanings of that world, and appropriate for living and surviving in such a world.
A “self,” then, may be seen fundamentally as a conversation. It may be more accurate to say that this conversation constitutes the self— that a self is a nexus of meanings surrounding a site of agency and perception, meanings that each of us aggregates over the years in response to the situations and interactions we encounter as we live.
– Bruce Hyde & Jeffery Bineham 
Separating ourselves from our stories
Our identities are built from stories that we have of ourselves. We have enabling stories and disabling stories.
The only way to break free from our disabling stories is to first recognize them as such and separate ourselves as the authors of those stories. This creates a distance between ourselves and our identities, and the possibility of writing a new one. Since stories are built in language, they can be rewritten and reinterpreted.
We think we tell stories, but stories often tell us, tell us to love or hate, to see or be seen. Often, too often, stories saddle us, ride us, whip us onward, tell us what to do, and we do it without questioning.
The task of learning to be free requires learning to hear them, to question them, to pause and hear silence, to name them, and then become a story-teller.
– Rebecca Solnit in The Faraway Nearby 
It is when we cannot differentiate ourselves from our stories that we get so tied up to our existing identities that we cannot imagine creating a new one in its place. They are too static, too solid, and too real.
When we can identity a story as one, it gives the real “I” some breathing room and wiggle room to grow beyond these pre-existing stories and forge a new identity in the process.
Identity as an effect rather than a cause
Jean Paul Sartre emphasized our freedom to choose when he said,
Man is nothing else but what he makes of himself.
– Jean Paul Sartre 
Mick Cooper brings up an interesting point while elaborating this concept from Sartre,
We are our choices: our identity and characteristics are a consequence – and not causes – of the choices that we make.
From this perspective, then, there is nothing that caused you to become the person you are: whether you ‘are’ a therapist, parent or extravert. Rather, you became you by virtue of the choices that you made in your life, and these identities are only an outcome of the decisions that you have made.
– Mick Cooper in Existential Therapies 
He equates our identity to our choices and actions. Our identity and characteristics are not causing us to be a certain way. Instead we are proactively developing our identities through our conscious choices and resulting actions.
We are writing the story, albeit one version of it, through our actions and choices. It is an actionable and malleable definition of identity rather than a solid, unchangeable, and inaccessible one.
Identity as actionable and malleable
The natural line of thought is that given our identity and characteristics there are certain things that we are capable of and not capable of others. But what if our identity and characteristics are an effect and consequence rather than a cause?
This opens up the possibility of building our identity through actions and choices rather than be limited by preconceived notions that we have. This does not mean we will be able to dunk a basketball tomorrow. But the reason why we can or cannot has a lot to do with the choices we made and the resulting actions we took leading up to that moment.
In the same vein, where we end up in the future will be contingent upon the choices and actions we take leading up to that particular point in the future. And in every moment we have the freedom to choose what those choices and actions are.
What ultimately motivates all learning and all action is that only through action does one acquire an identity, and having an identity, a way of being and acting, is what human being is all about.
– Wiley Souba/Phenomenology of Leadership 
How many times have we decided that we won't take a chance on an opportunity because we do not think we are made for it or don't have the requisite skillset. Given enough time, do you think you can eventually master that skillset?
We can get so lost in psychological jargon that we don’t actually examine where that identity came from to begin with. We forget that in every moment we still have the freedom to choose. At least most of us are in that position. And with each choice we are building, developing, and changing our identities. 
Identity is not fixed
From this perspective, there is no fixed identity. This can be both disconcerting and yet liberating.
Disconcerting, because suddenly we don’t necessarily have something to stand on. The edifice in our mind is not as stable as we thought. Liberating, because we can now go build the one we do want and because we have a choice in the matter instead of assuming it as a given.
There are obviously things about our situation and personal histories, what the existentialists call “facticity” and “thrownness”, that cannot be changed and they do constrain us. But within those unchangeable realties we still do have choices.
A different orientation
Below are the differences in orientation when we look at identity as an effect that follows from our actions, rather than as a cause that drives actions.
Reality isn’t always as clearly differentiated and is somewhere in the middle. It is never one way but in fact in a loop. Our actions drive our identity which in turn drives our actions.
The mistake is to forget our agency in the process, and how influential our actions can be in proactively forging and shaping our identities. While identity might not be directly accessible, our choices and actions certainly are, which in turn make our identities actionable and accessible.
The next time we are in a situation that we do not think we are cut out for, it is worth looking into where that notion came from.
Our identity is an ongoing story built out of conversations. And all stories are built in language and thus can be changed over time. The way we change that language is through choices and actions.
By changing our choices and actions, we change our narratives, and eventually our identity.
- How we look at our past and future has a huge bearing on our actions in the present. The default linear way of looking at time can be a limiting factor especially in leadership. Leaders have to learn to understand time differently in its various dimensions.
- We can either be pulled by the future or pushed by the past, and these are completely different orientations to how we approach our work and lives. Being aware of these dynamics can help better leverage our actions.
- From Debate to Dialogue by Bruce Hyde & Jeffery Bineham.
- The Faraway Nearby by Rebecca Solnit.
- Existential Psychoanalysis by Jean Paul Sartre.
- Existential Therapies by Mick Cooper.
- The Phenomenology of Leadership by Wiley Souba.
- Three Laws of Performance by Steve Zaffron & Dave Logan.
- James Clear takes this notion of identity as a cause into the realm of habits.