Hope, Optimism, and Other
Business Assets
Why "psychological capital" is so valuable to your company Do you have any idea what you're worth to your company? Not your human capital -- no doubt you and your employer are well aware of your talents, experience, and education. Rather, can you estimate your value to your business in terms of the psychological capacity you possess that moves your organization to the outcomes it wants?
Well, probably not -- because very few people have inventoried their psychology, and even fewer know which attributes really propel business performance. Human capital has been studied and tested extensively, but psychological capital is such a new idea that few of us know whether we've got any or not.
But if Fred Luthans has anything to say about it, that will all change.
Fred Luthans, Ph.D., is the George Holmes University Distinguished Professor of Management at the University of Nebraska-Lincoln. He has published about 150 articles and several books, served as the president of the National Academy of Management, is the co-editor-in-chief of the Journal of World Business, the editor for Organizational Dynamics and the Journal of Leadership and Organization Studies, is on the editorial board of several other journals, and is a fellow of the Academy of Management and the Decision Sciences Institute. Dr. Luthans says that, though management science and economics have explored business with excruciating thoroughness, they have overlooked something big -- the human mind.
An interest in the Positive Psychology movement got Dr. Luthans thinking about positive organizational behavior. Further research led him to a breakthrough: hope, confidence, optimism, and resiliency make workers more productive. This statement may seem like bedrock common sense to every great manager who reads it. However, Dr. Luthans' research takes it further than conventional wisdom. He's found that these attributes can be embedded, developed, measured, and trained to create sustainable, predictable, measurable increases over time. And that's not just common sense, that's profit. Dr. Luthans has co-written, with Carolyn Youssef and Bruce Avolio, a book about his findings: Psychological Capital: Developing the Human Competitive Edge (Oxford University Press, 2006). In this interview, he offers useful insights into psychological capital, including the business results of developing it, how managers can turn common sense into a systematic tool, and why psychological capital is a business advantage most organizations don't know they have.
GMJ: What's the difference between human capital and psychological capital?
Dr. Luthans: The starting point is that every business, as well as this business school, has been focused on financial capital. That's what our curriculum is based on, that's how our courses are taught, that's the mentality of most business managers today: How do we manage our financial and, to a degree, our physical capital? We've all been conditioned to think about return on investment.
But we finally realized that there was a significant differential between the book and market value of companies and the so-called worth of the company. That disparity was made up of human capital. Then some of the top business leaders were widely quoted as saying things like, "The value of my company walks out the door every night." They began to recognize that it wasn't just the financial or physical assets, but also their human assets, that made up the value of the company.
Please click here to continue reading Hope, Optimism, and Other Business Assets.
Reprinted from The Gallup Management Journal |
 Note from Kevin
Greetings!
For those of you reading this LeadersWay newsletter who remain vigilantly focused on the financial and physical aspects of your business, it's time to take a break! We've been saying for a long time that the only sustainable advantage you have in this decade and beyond is your people, and the evidence is building to support this principle. Our program, "The Separation Zone," defines with exacting clarity the differences between Good companies and Great companies. Is it any surprise that the difference is People?
In the article Dr. Luthans uses Southwest Airlines as an example of a company who knows the difference between Good and Great and is clearly enjoying the results as they remain the only airline that is consistently profitable. They've proven it's not the airplanes, it's not the food, it's not the routes they fly. It's their PEOPLE!
Think
of it this way; if you, your people and your company are
largely focused on Price, Product, Promotion and Place,
you are operating as a commodity. Each of these areas
are easily replicated and no longer represent a sustainable
business advantage. It's a focus on the People asset that
separates Great companies from Good companies, and it's
an advantage that is difficult if not impossible to replicate.
I've never been more convinced or more excited about the possibilities and the path to greatness. Every day in my world working in your business and businesses like yours, I know that it's about:
• Selecting the RIGHT people -- people who have the qualities for superior performance in the position.
• Getting the Right people in the Right jobs -- No hesitations, no favorites, just making the best decisions for you people and the company.
• Developing the Right people -- Fast forwarding the development of superior performers.
• Retaining the Right people -- Creating the conditions where superior performers are engaged and excited.
We're ready when you are!
Life is good...
KW |
