Saying "I know" doesn't reflect understanding or knowledge—it says "My ego has an issue with what I know or don’t know." I can’t think of a good reason for a leader EVER to say it.
Even at its best, it’s not smart and/or cool-nerdy and/or charming. It’s distancing, distracting, and ultimately shuts down the other(s) in conversation with you, none of which make for good leadership on your part.
If you know, then you don’t need to prove anything, and it can’t hurt to listen, a good leadership "habit" common to the highest performers. If you don’t know, you’d be fudging to say you know, and it’s even MORE important to listen.
So why do people do it?
For most, it’s the concern about what others might think if you "don’t know" (I mean you SHOULD know, right? / How could you NOT know that?!) or “haven’t heard” (knowledge is power, after all!?)
Occasionally those who say “I know” do it excessively—a verbal tick, like those who overuse “like” or habitually up-talk (end declarative sentences with a question-like intonation.)
Leadership is having the strength and courage NOT to know, and instead to be constantly learning through asking and listening.
Monitor how you (and those around you) use “I know." If you notice it, see what notion or belief is driving it. Then, with a little practice, you can substitute a higher-performing belief there, and better habits around listening and learning, even when ego tells you "I know!"
The Recovering Leader