How the concept of Psychological Capital can help Malta CEOs reboot after a challenging year

Apart from some notable exceptions, most business sectors have faced a tough 12 months. For global CEOs, the fight to stay afloat amidst relentless uncertainty has undoubtedly taken its toll. Hopefully, salvation is now closer at hand, and is to be found at the end of a needle. As the pace of vaccination quickens, there will be growing optimism that we have finally turned a corner and the focus will soon shift from survival to recovery. And nobody will need a boost more than CEOs themselves.

This talk of needles and boosting performance reminds me of an amusing story that appeared in the Financial Times way back in 2012. It is worth a quick digression. In an article headed ‘Keep Taking the Testosterone’_^[i] a New York Doctor of Osteopathic Medicine, Dr Bissoon, explained how he had recently started offering testosterone therapy as one of his services. In doing so, he had presumed that most of his clients would be avid gym users hoping to build their physiques. That is not what transpired.

Yes, his business boomed after the introduction of the new service, but instead of being inundated with Arnold Schwarzenegger lookalikes, the majority of those attending turned out to be senior Wall Street executives. As the good doctor himself explained: “Since the recession started, more guys want to be on top of their game.” And what were the executives – his patients – doing to stay ‘on top of their game’? Queuing up to get shots of testosterone!!

I am sure some readers – especially the female leaders amongst you – might be wondering what on earth this anecdote has to do with the topic of the article? There is quite a strong (if not obvious) lesson for all executives from this light-hearted story: whilst salvation from global pandemics might flow from the end of a needle, improved leadership performance does not. Yet, having just weathered the most traumatic year of their careers, many of Malta’s CEOs will need a ‘shot in the arm’ to help them reboot to past levels of performance.

In doing so, one area that I believe can help executives to reflect on where they are right now is the growing research on Psychological Capital, or ‘Psycap’. Over the past decade or more, organisational psychologists have been seeking to identify what helps people to excel in a work setting, and especially so for leaders. Psycap captures quantifiable personal success factors, and an expanding body of evidence now confirms that individuals with high Psycap consistently outperform those with lower levels of it.

So, what is Psycap? Four interrelated components have been identified by leading experts in this field.^[ii] They can be briefly summarised as:

Hope – willpower and ‘waypower’ to accomplish a goal

In this context, ‘hope’ refers to the determination and ability to set and achieve goals. So, if you have high hope, you are good at pushing yourself for greater achievement.

Self-efficacy – personal confidence to successfully complete a task or objective

High levels of self-efficacy, or more simply self-confidence, lead to enhanced performance because you are more assured that you can fulfil tasks or succeed in your role than if you lack the same confidence.

Optimism – personal assurance of a positive outcome

This is clear: the more optimistic you are, the more likely you will believe in constructive outcomes from your efforts and be able to influence others in a positive way.

Resilience – the ability to bounce back in the face of adversity

A person who displays this quality is tenacious and as such keeps going in the face of seemingly impossible obstacles and odds.

Of course, all leaders need a variety of talents and skills to succeed, but what the research is showing is that individuals with higher levels of Psycap (the combination of the above four elements) are more confident, better able to manage stress and adversity, have a higher level of motivation, as well as being more likely to pursue growth and development.

I think that Psycap offers Malta’s CEOs a useful personal reflection framework as they consider how to rebuild themselves after a hellish 12 months. In fact, I have been referring to this concept during recent mentoring conversations held with senior managers. Here is a flavour of some of the challenges they are reporting against the four components of the model:

Hope

It is perhaps unsurprising that many executives are currently feeling somewhat apathetic towards goal setting after having witnessed the wanton destruction of what they had built up over so many years. The uncertainty they continue to face makes the prospect of goal setting seem a bit absurd right now. One business owner wryly held up four documents to the screen during our video call and said “these are our four business plans since last June. None of them make any sense… Which one would you like to discuss?”

Self-efficacy

Any leader would be inhuman not to have had their confidence hit, at least to some extent, by what they have come through. One executive I spoke with described this very well when she said, and I am paraphrasing here: “I never previously lacked self-confidence about my ability to deliver but now I am not so sure. Whereas I always had a great track record of hitting the targets I presented to my board, I have been way off the mark on my numbers for every one of the last four quarters, and even my revised estimates have not come anywhere close. Sure, the board members are understanding given the circumstances, but I just feel my self-confidence ebbing away every time I have to join a Zoom call and report worse than expected results…” Even for the strongest leaders, confidence can be a fragile quality and all of us have taken a hit in that regard this year.

Optimism

You do not need to be a rocket scientist to understand that executives’ levels of optimism have also been heavily impacted. Except for the lucky minority who saw business expand last year, most leaders are feeling less optimistic today than they were 12 months ago. Yet, optimism is one of the must-have qualities that leaders bring to the table, so we are all going to have to try and rebuild it – and fast.

Resilience

Or ‘bouncebackability’ as the Americans like to call it, is clearly going to be a huge factor in determining the shape of personal recovery curves. One family hotelier I spoke with recently has seen his operation virtually decimated due to prolonged lockdowns. As we discussed his own route back, he said poignantly: “I’m not sure my heart is in it anymore, do I really want to start at the bottom of the hill again?” With time, I believe he will work through this sense of deflation, but only if he gets some support and outside motivation. It will not just magically happen.

These are but snapshots of what most business leaders are feeling at present, to some degree at least. It is not an exaggeration to say that levels of Psycap are likely to be lower amongst Malta’s CEOs today than they were a year ago; everyone is a bit battered and bruised. In my role as Managing Director, I know first-hand that staying goal-oriented, confident, optimistic, and resilient is not easy at present. In trying to reenergise myself, I have found Psycap to be an effective framework for reflecting on where my head is right now. It has given me insights into priority areas that I need to work hard at to get back to where I was previously. Hopefully, the Psycap model can be of support to Malta’s CEOs as they map out their own personal recovery paths.

I will close with the words of General George S. Patton: “Success is how high you bounce back after you hit bottom”. We have all fallen over the past year, but reflecting upon and then actively rebuilding Psycap will help determine the height of the bounce.

I would love to hear your thoughts on this article and to continue the conversation, so please feel free to contact me directly at [email protected]

^{[i] Wallace, “Keep Taking the Testosterone”, Financial Times, 9 February 2012.}

^{[ii] Luthans, Avolio and Youssef, Psychological Capital: Developing the Human Competitive Edge (Oxford University Press 2007).}

Reflections from business leaders