I’ve been giving a lot of talks this year to help people better handle uncertainty and the tough times being experienced in many sectors and industries. A powerful concept that I like to share with people and that they find helpful is something known as Psychological Capital. As so many of the people that I’ve been teaching have found it helpful in tapping into their inner ‘hero’, I thought I’d share it with you here so you and your team can benefit from it, too.
In this article, you’ll learn:
- What Psychological Capital is
- Activities to help you develop your Psychological Capital
WHAT IS PSYCHOLOGICAL CAPITAL?
Psychological Capital (PsyCap) comes from the field of positive psychology and emphasises what is right with people, taking a strengths-based approach, as opposed to focusing what is wrong with people. Developed by psychologist Fred Luthans and colleagues, it’s a powerful concept that helps people tap into their inner emotional and mental resources. Research shows that high PsyCap helps us cope with stress and difficulties in healthier, more effective ways.
The four ‘hero’ factors that make up PsyCap are:
- Hope
- Efficacy
- Resilience
- Optimism
What is hope?
Hope is a motivational state that helps us persevere towards goals and changing course, where needed. At the heart of hope is the importance of having a plan. There is a virtuous circle in that with hope we can find a way forward, and when we find a way forward, we have hope.
What is efficacy?
In this context, we’re referring to self-efficacy. This is a concept developed by psychologist Albert Bandura. It’s the belief you have the skills, knowledge and abilities to achieve a specific goal or handle a challenge. This is where you remember that you’ve done hard things before and you can do them again.
What is resilience?
Most of us are familiar with the concept of resilience, certainly since the Covid19 pandemic where everyone was talking about resilience. This is about our capacity to handle life’s challenges and adversity. While many experts talk about resilience being about bouncing back, I think it’s about bouncing forward. There’s a Japanese proverb that I think captures perfectly what resilience is about – “Fall seven times, stand up eight.”
What is optimism?
Optimism is the belief that good things will happen in the future. That you will succeed now and in the future. Something that helps our optimism is not living in the past, accepting the past is in the past and focusing on what is now and what is next. In psychology, we talk about the power of acceptance and commitment. Accepting what is and committing to doing what we need to move forward. As Elsa sang in Frozen, “Let it go!”
Image by Hayley Lewis © 2020
HOW TO DEVELOP YOUR PSYCHOLOGICAL CAPITAL
How to develop Hope
Do this: Set a goal for yourself to aim towards over the next 3-6 months.
Research shows that goal setting is a powerful way to develop hope. Psychologists suggest three things that help our goals:
- Make your goal as vivid and concrete as possible. We need to specify the when, where, and how of the goal. For example, rather than say, “I’ll update my CV”, instead say, “Tomorrow morning at 8.30am, I’ll set a timer and spend 30 minutes updating my CV.”
- Break your goal down into small sub-goals. A 2023 study in the Journal of Applied Psychologyfound that when we break our goals down into sub-goals, we were more likely to stick to it. For example, you might have an overarching goal of learning a new skill. Break it down into weekly sub-goals.
- Write your goal down. Leadership expert, Mark Murphy, states that writing a goal down – particularly if it is a vivid description – means we’re 1.2 to 1.4 times more likely to successfully achieve our goal. One of the reasons for this is the neuroscience concept of encoding – a biological process which determines what gets stored in our long-term memory. The suggestion is that writing helps the encoding process.
How to develop Efficacy
Do this: List all your successes and achievements over the past five years. Update your CV and LinkedIn profile with these.
One of the most powerful ways to increase your self-efficacy is to think about your successes and achievements. Research suggests that high levels of self-efficacy can help us to manage negative emotions at work and acts as an important resource in buffering against the negative effects of job-related stress.
Listing achievements and strengths is something I get many of my coaching clients to do when they need a boost to their inner belief. Reflect on what you have accomplished. It can be helpful to list these out and capture them somewhere.
Image by Hayley Lewis © 2020
How to develop Resilience
Do this: Once a week for five weeks, reflect on a difficult moment you experienced and identify one thing you learned from that experience. At the end of the five weeks, reflect on your weekly reflection – what did you learn from this practice?
One of the most powerful ways to boost our resilience is to learn. In fact, research over the years suggests that one of the common characteristics that the most resilient people have is openness to learning. Whether that’s learning a new skill or learning from failure.
When it comes to learning from failure, there is an excellent framework called Gibbs Reflective Cycle. You can read more about this framework, and the questions within it, in another article I wrote about the power of reflective practice for leaders.
Image by Hayley Lewis © 2022
How to develop Optimism
Do this: List all the things you are worried about and spending time thinking about. Put them into categories of things you can control and things you can’t control. Focus on the things you can control.
Often, when I’m working with individuals or groups of people navigating change, they will sometimes talk about having no control. But I want to challenge that thinking. You have more control that you think.
- What can you choose to learn?
- How will you choose to respond?
- How will you look after yourself?
- How will you engage with your colleagues?
- What do you choose to say?
- What do you choose not to say?
- What decisions are you prepared to make?
As Dr Audrey Tang says in her book, The Leaders’ Guide to Wellbeing,
“In many ways, having a sense of ‘control’ is important because it means that you are more likely to take initiative, to instigate, to work to affect an outcome.”
Image by Hayley Lewis © 2021
YOUR NEXT STEPS TO BETTER PEOPLE MANAGEMENT!
I believe you’re here in my little corner of the internet because you want to be the best people manager possible. My mantra is “It starts with you” and by reading this article, you’ve made a brilliant step forward. Now here are some next steps for you to take:
Follow me on Linkedin where I share tools and tips to help people managers.
Listen to my podcast, Manage with Confidence, for ideas and inspiration from guest experts, as well as the odd solo episode from me. I’ve created to help people managers and leaders.
Grab a free copy of my 74-page ebook, Beautiful change: A practical guide to help you deliver successful change that has the right impact. It’s filled with practical, evidence-based activities to help you.
Join 4,000 other managers and leaders and subscribe to my monthly newsletter where I share practical resources and downloads to help managers. There are also book giveaways every couple of months!
Work with me as a coach, trainer, or speaker. Contact me to arrange an exploratory call.
HELP OTHERS MANAGE WITH CONFIDENCE
Know someone whose psychological capital needs a boost? Send them this article to help them.
Post author: Dr Hayley Lewis. First published on the HALO Psychology website 14 August 2026.
STUDIES REFERENCED IN THIS ARTICLE