The proverb refers to an individual who refused to listen to advice or a warning presented to him on something. This person was then seen with a wound on their head and though the proverb does not say the cause of the wound, it links the cause to the failure to heed the admonition. In this way our ancestors were impressing upon us the importance of taking advice from others and not being strong headed.
The proverb is used to encourage people to take advice. It is also used retrospectively to point out that the refusal to accept advice is what has lead to the calamities that have befallen the individual.