Psychological Capital, Your Best Investment Yet
We are all at times overwhelmed by life and lacking in what is needed to take on something new. But according to new research in the field of positive psychology, building psychological capital can help.
PsyCap, as it’s typically shortened to, can help you manage who you are now and who you want to be.
And unlike other forms of investment, it has no financial risk and is almost always guaranteed to pay great dividends.
What is PsyCap?
PsyCap is about building the mental resources required for doing what you want and realizing your potential. After all, according to research, when your psychological capital is high, you can become a master in what you are doing while experiencing a positive, more complete outlook on life.
Not only that, building PsyCap improves your physical and mental health while increasing your life and job satisfaction.
PsyCap at Work
While initially developed by management professor Fred Luthans to understand organizational growth, it has since become a powerful tool for mental health.
“PsyCap is concerned with who you are now and […] who you are capable of becoming in the future.”
— Fred Luthans.
Luthans found that employees have two types of knowledge:
- Explicit knowledge — the skills and abilities they learn from formal training, education, and experience.
- Tacit knowledge — the knowledge built and grown over the years through being part of an organizational culture.
Tacit knowledge is crucial. It gives the company its competitive advantage; they cannot lose it to their competitors because it’s not transferrable.
Luthans urged companies to encourage tacit knowledge by investing in existing employees’ psychological capital rather than taking on new staff.
PsyCap and Life Fulfillment
While high levels of PsyCap relate to human performance at work, it’s also linked to life satisfaction and fulfillment.
Not only that, but according to research, increasing PsyCap can lower stress, BMI and cholesterol levels, and even improve relationships.
Luthans describes it as something “practitioners can leverage to tap into still largely unchartered territories of human strengths, thriving, and excellence.”
PsyCap also links to neuroplasticity — our brains’ ability to learn, unlearn and grow throughout adult life.
We are a work in progress, and we can develop and grow psychological capital along the way.
What Makes up PsyCap
Helpfully, PsyCap comes with its easily-remembered acronym, HERO.
PsyCap rests on four pillars, defined by Hope, (Self-)Efficacy, Resilience, and Optimism. They are the essential human qualities that affect our outcomes.
While each of the four elements has its own characteristics and skills that we can learn, PsyCap as a whole is greater than the sum of its parts.
And, as John Yeager writes in The Coaching Zone, “psychological capital is open to change and development,” and it begins with working on each of the four qualities:
Hope — “is a motivational state based on beliefs about the future,” writes Yeager. And it is linked to the belief that we can find ways (and motivation) to meet the goals we set.
How we think about the future impacts our success at work, in education, and elsewhere.
- Set clear, challenging yet achievable goals that will motivate you.
- Consider what strategies you will use when your path is blocked.
- Visualize success to believe you can reach your goals.
Efficacy — according to the work of psychologist Albert Bandura, believing we can do so something motivates us to act and increases our chance of success.
- Reflect on your past triumphs. How did it feel? What would it feel like again?
- Read about (and follow on social media) inspiring people that have overcome difficulties. Emulate their positive behavior, especially when you are confronted by obstacles.
- Find increasingly difficult situations to practice being successful and reframe failures as opportunities to learn.
Resilience — is our ability to bounce back from adversity, get back up when we have been knocked down and learn from the experience.
Finding and reflecting on meaning in life (it doesn’t have to be a spiritual one) and in the little things we do will help. Recognize that how you perform at work can make a difference to your colleagues and your customers’ lives and wellness.
- Facing up to and accepting reality is crucial.
- Accept change happens, and life throws up the unexpected.
- Adopting flexibility and a growth mindset are essential.
Optimism — believing that good things will happen in the future, yet recognizing hard work is required, can be empowering.
- Accept your past. Learn from your mistakes.
- Visualization can help; spend time imagining your best possible self. Recognize who you could be and move towards that person one degree at a time.
Work equally on all aspects of PsyCap. The focus should be on motivation, rewards, developing strengths, and other psychological resources, says Luthans.
Together, they have the power to improve how you feel about life and yourself and promote positive thinking patterns to replace deep-seated assumptions.
Investment with growth guaranteed — most likely.