It is important for leaders to not be surrounded by "yes men" who paint only a positive picture, Prime Minister Lee Hsien Loong said.
Rather, they need people with their own views who can improve on ideas or provide new ones, he said at a dialogue session last Friday.
Mr Lee was asked by a participant how he remains honest to himself and aware of his shortcomings, if he is surrounded by people who might constantly agree with him.
"If all you have are people who say 'three bags full, sir', then soon you start to believe them and that is disastrous," Mr Lee said.
"You need people who have their own views, whose views you respect, whom you can have a productive disagreement with, and work out ideas which you might not have come up with, or who improve on ideas you had."
When making policies, one also has to break out of the circle of common viewpoints, perceive how ordinary people will respond to those schemes and acknowledge the limitations, he said.
"You have to have a sense of what it looks like not from the point of view of the policymaker, but from the point of view of those who are at the receiving end of your policies," he said at the dialogue, a transcript of which was released by his office yesterday.
It is also important to remain open to the possibility of being wrong, Mr Lee told over 150 innovators and disruptors from across the Asia-Pacific at Camp Sequoia, an annual technology summit organised by venture capital firm Sequoia Capital India.
"If the person tells you something, what makes him say that? You may find that after thinking it over for a day or two, he has a point and you have to find some way to accommodate that and acknowledge that you were mistaken," he said.
Asked by dialogue moderator Shailendra Singh, Sequoia's managing director, for his philosophies on leading a country, Mr Lee said: "The most important philosophy is not to take yourself or your philosophy too seriously. If you think you have found a formula to succeed, somewhere in there you are going to fail."
Mr Lee added it is important to take in other views, and know when to accept them and when not to.
"You must be able to work with people, take views, take criticisms, change your views, even change your decisions, and then collectively find a way forward, which is collective - and yet where your fingerprint or thumbprint is somewhere inside there. It is very hard. Because if you just lead by consensus, then a bot can do it. But if you just charge ahead alone, you may find that nobody is following you," he said.
Mr Singh followed up with a question on how Mr Lee managed imperfections that he sees, and how he manages change as a leader.
Mr Lee elaborated on how Singapore built up its armed forces, liberalised its banking industry, set up a statutory board for tax collection and privatised the telecommunications sector.
To transform the Singapore Armed Forces, the Government attracted scholarship holders who could take up leadership roles. Many were sceptical but, over time, saw that the scholarship holders could deliver better results, and the move resulted in a professional, competent, technologically up-to-date and credible outfit.
Recalling how tax collection was slow and inefficient in the past when the Inland Revenue Department was part of the Finance Ministry, Mr Lee said the decision was made to free up the organisation so it had autonomy to recruit staff, computerise and improve procedures.
Change is always hard and there is never a final position, he said, but countries that do not change will become increasingly out of touch, and unable to function.
Another participant asked Mr Lee what Singapore would be like in 20 years' time. The Prime Minister said this was "the most difficult question to answer", as Singapore is already an advanced country and "there is no model to follow".
There is, however, plenty of potential to change and rebuild.
He noted that Paya Lebar Airbase will be relocated to Changi from 2030. Flight paths in that area had constrained developments down to Marina Bay, he said. "The airbase area will be opened up. It is probably the size of two or three new towns and the whole of the eastern half of Singapore can be redeveloped."
Should the current peace endure, the population then will have experienced stability and progress for all of their lives, he noted.
"The challenge would be for them to still have that drive to want to make things better, to want to be at the leading edge," he added.