Psychological Capital: Unleashing The Inner HERO’s Potential

When most people hear the word “capital,” they think of individual, organizational, or governmental wealth.

Yet, for many of the students I work with, their commitment to education is more than financial — it requires psychological capital.

As many of them are returning to study for graduate-level qualifications while maintaining families and careers, they must build and maintain their emotional resources.

Psychological capital includes hope, efficacy, resilience, and optimism and can potentially increase the mental wellbeing, strengths, and capabilities of our clients, students, and colleagues (Lupșa et al., 2019; Luthans et al., 2015).

This article introduces the psychological capital concept and explores its benefits in therapy, leadership, and beyond.

Before you continue, we thought you might like to download our three Resilience Exercises for free. These engaging, science-based exercises will help you effectively deal with difficult circumstances and give you the tools to improve the resilience of your clients, students, or employees.

Psychological Capital & Its 4 Core Components

Fred Luthans and Youssef-Morgan (2017) introduced the term psychological capital (PsyCap) in the early 2000s. Rooted in positive psychology, it integrates four positive psychological resources: hope, efficacy, resilience, and optimism, forming the acronym HERO.

Their PsyCap approach has been used across many life domains, from promoting personal mental wellbeing to success in the workplace and education. While popular in business, the strategy has also been adopted by the US Army, US Air Force, and NASA (Luthans et al., 2015).

Next, we consider each of the four elements of PsyCap. Each of PsyCap’s four dimensions can be measured, developed, and identified as performance enhancing (Luthans et al., 2015).

Hope: The will and the way

Hope is a “motivational state based on beliefs about the future” (Yeager & Cunha, 2021, p. 50).

This powerful, positive emotion is closely aligned with willpower (or agency), helping us remain determined to achieve our goals and overcome obstacles. Hope is more than wishful thinking; it requires that we know the pathways to reach our goals and achieve success (Luthans et al., 2015).

Consider the following:

How can you develop and maintain hope in yourself and others who are important to you?

Efficacy: Confidence

To achieve success in anything, we must believe in ourselves. Strong self-efficacy requires us to know that we have what it takes to be successful in the task we are working on and the goal we are striving toward (Luthans et al., 2015).

Ask yourself:

How does your degree of self-belief influence success in various areas of your life?

Resilience: Bouncing back and beyond

Anyone who has achieved anything will have faced challenges and overcome obstacles. It’s inevitable. However, resilience typically involves everyday skills and psychological strengths that are performed consistently. It is vital for working toward and achieving an important goal (Luthans et al., 2015).

Resilience involves embracing uncertainty. Resilient individuals embrace life’s challenges and either rebound to their original path or create a new one (Yeager & Cunha, 2021).

Reflect on the following:

How have you developed resilience in yourself and those around you?

Optimism: Realistic and flexible

While sometimes confused with “hope” in everyday language, “optimism” in the HERO model refers to the general tendency to expect good things to happen (Luthans & Youssef-Morgan, 2017).

However, it is not simply blind faith. Optimists should be realistic. They must remain aware that they must work hard and stay flexible to reach positive outcomes and overcome adversity.

Ask yourself:

When have you shown optimism while those around you have remained pessimistic?

Michelle McQuaid explores the subject of PsyCap in more detail in her fascinating video, Psychological Capital.

In “Be a Hero! Psychological Capital and Happiness!” Paul Krismer further examines the concept of PsyCap, how to develop it, and how it will benefit us.

One of the originators of the PsyCap concept, Fred Luthans, explains how to boost productivity using the four elements of HERO and its importance for leadership development, work engagement, and positive organizational behavior in “Luthans on Psychological Capital.”

Exploring the Science Behind the Concept

Support for the concept of psychological capital comes from many different areas of research, including studies of positive psychology, positive organizational behavior, leadership development, emotional intelligence, and growth mindset (Luthans et al., 2015; Luthans & Youssef-Morgan, 2017).

The origins of psychological capital draw from “positive psychology in general and positive organizational behavior (POB) in particular” (Luthans & Youssef-Morgan, 2017, p. 171).

The idea of the HERO within combines hope, efficacy, resilience, and optimism as theory and research-based elements of the overall PsyCap concept. Each is positive, measurable, and state-like (relatively stable), impacting our performance, behaviors, attitudes, and psychological wellness (Luthans & Youssef-Morgan, 2017).

Several other scientifically validated theoretical mechanisms underpin the theory (Luthans & Youssef-Morgan, 2017), including the following:

• Conation
  The proactive, goal-oriented aspect of motivation is associated with our need for autonomy (or control). Being proactive rather than reactive is an underlying theme of PsyCap.
• Positive cognitive appraisals
  Our capacity to reframe and interpret tough situations in a more positive light is critical.
• Positive emotions
  Psychological capital can prompt positive emotions, broadening our thought–action repertoire (Fredrickson, 2010).
• Social support
  Our connections with others are vital to building efficacy and resilience.

“State-like resources such as PsyCap are still malleable and open to development but relatively more stable than, for example, emotions” (Luthans & Youssef-Morgan, 2017, p. 176).

12 Benefits & Examples of Cultivating Psychological Capital

Psychological capital has received a great deal of research attention. Studies have identified various benefits from PsyCap interventions, particularly in the workplace (Lupșa et al., 2019; Luthans & Youssef-Morgan, 2017; Avey et al., 2008).

1. Enhanced wellbeing
   Improved life satisfaction and fulfillment
2. Improved performance
   Increased task success and boosted job performance, potentially improving critical organizational outcomes
3. Increased resilience
   An improved ability to bounce back from setbacks and manage stress better
4. Boosted optimism and hope
   A more positive view of future outcomes and the readiness to accept that good things are likely to happen
5. Higher self-efficacy
   Boosted self-belief in an individual’s ability to successfully execute tasks and achieve goals
6. Improved attitudes
   A more positive outlook regarding the workplace (or education, relationships, etc.) leading to increased organizational commitment and psychological wellbeing
7. Reduced negative outlook
   Lower cynicism, anxiety, and workplace stress levels
8. More positive behaviors
   Increased desirable behaviors such as improved organizational citizenship, helping others, and promoting the organization, while reduced deviant behaviors such as chronic absenteeism and spreading rumors

Examples of psychological capital interventions, many of which are workplace focused, include (Luthans & Youssef-Morgan, 2017):

9. Providing short, focused training sessions
   Conducting two-to-three-hour training interventions on goal setting, pathway generation, and mental rehearsals
10. Promoting positive organizational behavior
    Communicating the organization’s values and offering guidance on expected behaviors
11. Providing periodic coaching
    Offering ongoing coaching and mentorship to support staff wellbeing and personal development and help them address challenges
12. Offering health and wellness programs
    Implementing practical physical and mental health programs that promote good sleep, regular breaks, and healthy eating habits

How to Unleash the Inner HERO’s Potential in Coaching & Therapy

While the concept of psychological capital is widely promoted in the workplace, it is equally valuable elsewhere, including in sports and therapy (Luthans et al., 2015).

Positive psychologist John Yeager and sports coach Jon Cunha (2021) offer several powerful approaches for boosting PsyCap and unleashing the HERO’s potential in any environment, with clients, students, and colleagues in mind.

Learning confidence

Confidence is not constant all the time; it ebbs and flows. Clients can be helped to intentionally develop confidence while recognizing they can perform well even when it’s lacking (Yeager & Cunha, 2021).

One of the best ways of building confidence is to put individuals in situations with a reasonable probability of success over time. We can set realistic and energizing goals and break them down into manageable and achievable chunks. Success is celebrated as they reach each milestone.

Modeling

Clients can be encouraged to recognize the positive behavior of others. With practice, they can be taught to identify and model behaviors of those around them who display resilience, confidence, hope, and optimism (Yeager & Cunha, 2021; Lupșa et al., 2019).

Individuals can even learn to use their earlier selves as positive role models. They can be encouraged to reflect on times when they showed a HERO mindset, overcoming obstacles along the way.

Creating multiple pathways

Once we’ve set a clear and realistic goal, we must identify multiple pathways that achieve a positive outcome. Clients learn to be hopeful that, even in the face of obstacles, they have the tools, strategies, and support to push forward toward success (Yeager & Cunha, 2021; Clough et al., 2021).

Process goals that focus on specific actions, behaviors, and strategies are beneficial for achieving the desired outcome.

Coaching optimism

Optimism is a powerful tool for developing and unleashing realistic potential. Coaches and therapists can help clients create more optimistic explanatory styles by considering the following three questions (Yeager & Cunha, 2021).

Do you believe this challenge or difficulty is temporary, or will it last forever?
Does it affect every aspect or just a small part of your life?
Do you blame yourself or others for the event?

When clients learn that typically bad things don’t last forever, don’t impact every aspect of their lives, and contain aspects they can and can’t control, they adopt a more realistic optimism (Yeager & Cunha, 2021).

4 Ways to Promote PsyCap in Leadership and Teams

Today’s global economy is in a constant state of flux. As a result, “hopeful organizational leaders and managers become crucial to the growth, if not the very survival, of any organization” (Luthans et al., 2015, p. 92).

So, how do we promote psychological capital in our leaders and their teams?

Leadership development programs

Experienced and developing leaders will benefit from training programs that focus on each of the HERO components and how to model and share them with employees (Luthans et al., 2015; Luthans & Youssef-Morgan, 2017).

They will also gain from ongoing coaching and mentoring and workshops that promote psychological capital principles in their daily work.

Positive organizational climate

Organizational climates must be psychologically safe, adopt a growth mindset, and promote work engagement. Leaders and their employees benefit from an environment of openness, positivity, autonomy, and innovation (Avey et al., 2008).

As leaders, we should recognize and celebrate staff achievements to boost morale, optimism, and efficacy and provide a buffer for stress (Luthans et al., 2015).

Modeling positive behaviors

When senior management and leaders display positive behaviors and multiple elements of PsyCap during difficult times, they foster hope and confidence in their own abilities and those of others (Avey et al., 2008; Luthans et al., 2015).

Resilience is contagious. Leading by example, showing resilience and flexibility in the face of challenge, and being optimistic about successful outcomes prove to staff that leaders are confident in their abilities.

Team development

Team-building activities that promote trust, collaboration, and mutual support build cohesion between members. A shared vision and transparent, realistic team goals foster a sense of shared purpose that encourages openness and communication (Avey et al., 2008; Luthans et al., 2015).

Goals should be tracked, and the successful delivery of milestones recognized and rewarded.

3 Scales to Measure Psychological Capital

Measurement is vital to building psychological capital in the workplace, education, and therapeutic settings (Luthans et al., 2015).

Validated measures include:

• Psychological Capital Questionnaires (PCQ-24 and PCQ-12)
  The original scale developed by Luthans and Youssef (2007) is a 24-item psychological capital questionnaire. They also created a shorter 12-item version.

Both are available for purchase.

• Implicit Psychological Capital Questionnaire (I-PCQ)
  Luthans et al. (2015) also built a subsequent measure that reduces the influence of social approval on responses.

It is available in his book Psychological Capital and Beyond (Luthans et al., 2015) and journal article “Measuring implicit psychological constructs in organizational behavior: An example using psychological capital” (Harms & Luthans, 2012).

The I-PCQ is available for download.

Helpful Resources From PositivePsychology.com

Psychological capital can become an essential element of successful client outcomes. We have many resources available for therapists and coaches supporting clients in building hope, efficacy, resilience, and optimism.

Our free resources include:

• Resilience and Change
  When attempting to build the resilience needed to cope with change, it’s helpful to consider the skills we possess, available support, strategies we can adopt, and wisdom that could be valuable. The Resilience and Change worksheet encourages reflection on a previous successful change.
• What Is Hope?

  This is a powerful tool for learning what hope is and how becoming more hopeful could change our lives.

• Confidence Booster
  Learn the habits and skills required to boost your self-efficacy and reap the benefits with this worksheet.

More extensive versions of the following tools are available with a subscription to the Positive Psychology Toolkit© and described briefly below.

• Optimistic Thinking Style
  Optimism does not require excessive positivity but rather a realistic and flexible approach and a generally positive thinking style. Try out the following four steps:
  • Step one: Notice the good in your life.
  • Step two: Give yourself credit for making things better in your life.
  • Step three: Expect those (or other) good things to last.
  • Step four: Look beyond the present to see how these valued things can last.
• Hope Map
  How we think about the future shapes success in work, life, and education. Pathway thinking is a valuable approach for tapping into our long-term motivation and fueling our persistence.
  • Step one: Identify a clear and exciting goal.
  • Step two: Write down the actions (pathways) needed for success.
  • Step three: Identify the obstacles and how to overcome them.
  • Step four: Write down ideas for maintaining motivation.

If you’re looking for more science-based ways to help others overcome adversity, this collection contains 17 validated resilience and coping exercises. Use them to help others recover from personal challenges and turn setbacks into opportunities for growth.

A Take-Home Message

Fred Luthans’ idea of the HERO within’ combines individual elements of hope, efficacy, resilience, and optimism into an overall concept of psychological capital for boosting performance and mental wellbeing (PsyCap) (Luthans et al., 2015).

The now popular idea of PsyCap draws its inspiration from positive psychology and positive organizational behavior. It aims to capture the core aspects and overall combination of the mental resources required to overcome obstacles and achieve goal success (Luthans & Youssef-Morgan, 2017).

According to the theory, our psychological capital is not fixed. Instead, we can develop the capacity to take on challenges, complete complex tasks, and bounce back from obstacles. To do so, we must build and maintain a success mindset.

As coaches and therapists, we can work with clients to develop the will and the way (hope), confidence (efficacy), capacity to regain our footing when knocked down (resilience), and realism and flexibility (optimism) in our goal setting and achievement (Luthans et al., 2015).

The benefits for our clients are considerable. Inside and outside work, psychological capital can enhance their wellbeing and performance, increase confidence and resilience, and promote positive behaviors while reducing negative outlooks.

Working with our clients to help them become aware of, explore, and apply the four key elements of the HERO model has the potential to positively and profoundly impact multiple aspects of their lives forever.

We hope you enjoyed reading this article. Don’t forget to download our three Resilience Exercises for free.

Ed: Updated Feb 2025