In our ever-changing and constantly disrupted world, leadership excellence is a necessity – although seemingly stating the obvious, countless different management philosophies and methods abound, many of which are ineffective and some even introducing toxicity and dysfunctionality into the work environment. Many organisations “labour” under poor and even devious managers. In these organisations, most employees become disheartened, trust disintegrates and performance levels drop.

For decades, psychology has been associated as dealing mainly with the treatment of mental illness. At the end of the twentieth century, however, a new approach in psychology gained popularity – positive psychology. Positive psychology, the study of optimal human functioning, is an attempt to respond to the systematic bias inherent in psychology’s historical emphasis on mental illness rather than on mental wellness, mainly by focusing on two forgotten, but classical, psychological goals:

  • Help ordinary people to live a more productive and meaningful life
  • Realise the full potential that exists in the human being

Since Martin Seligman, a former head of the American Psychological Association, chose positive psychology as the theme of his presidency term, more empirical research and theoretic development emerged in this field. One of these researchers, Fred Luthans, looked at “positive organisational behaviour” (POB) wherein he focused on psychological states that are open to development and have impact on desired employee attitudes, behaviours and performance. He found that four psychological resources were determined to best meet the POB scientific inclusion criteria: Hope, Efficacy, Resilience and Optimism – he called it “the HERO within” – and termed it as psychological capital or “PsyCap”. The four components are defined as follows:

  • Hope – a positive motivational state where two basic elements – successful feeling of agency (or goal-oriented determination) and pathways (or proactively planning to achieve those goals) – interact.
  • Efficacy – a person’s confidence in his/her ability to achieve a specific goal in a specific situation.
  • Resilience – a positive way of coping with adversity or distress. Organisationally, this is defined as an ability to recuperate from stress, conflict, failure, change or increased responsibility.
  • Optimism – a realistic construct that regards what an employee can or can’t do. As such, optimism reinforces efficacy and hope.

These four components can be developed and, in our tumultuous business world, organisational leadership has an increasingly important responsibility to create the environment where hope, efficacy, resilience and optimism can flourish. The possession of adequate doses of PsyCap has a positive correlation with the following:

  • Desired employee attitudes, behaviours and performance – feelings of well-being, satisfaction and a sense of belonging and being valued translate into discretionary effort, commitment and focused work.
  • Stable organisational growth – PsyCap and a positive supportive climate are necessary to facilitate organisational development. A supportive climate is defined as the total support that an employee receives from their co-workers, other departments and their supervisors which helps them with their job demands.
  • Effective organisational change – when employees have the responsibility to adjust to a new strategic direction, many aspects of their PsyCap are put to the test as they have to learn new behaviours and be confident in doing so, recover from the crisis, be motivated to cope efficiently and effectively and to believe in a better future.

Organisational leadership has a huge responsibility to grow “the HERO within” their employees. PsyCap can be developed and training in this area is helpful. The foundation, however, is the organisation climate and company culture – this environment of trust, respect, value-alignment, opportunity and fairness is cultivated by those in leadership. Without such an environment, employees will leave.

Free To Grow assists organisations in developing PsyCap within their employees (

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