Ted Freeman, PhD Organization Effectiveness & Leadership Advisor on How I Hire podcast.

Special: Elevating Psychological Capital with Dr. Ted Freeman

Dr. Ted Freeman joins me on this special episode to discuss Psychological Capital, a framework we can use to maintain performance and wellbeing in difficult times. We get into evidence-based practices we can follow to improve our (and our teams’) ability to manage stressors and pressures now and in the future.

Ted has extensive experience as an organization development consultant and executive. He served as Culture Officer at EILEEN FISHER, INC., the purpose-driven and sustainable women’s apparel brand based in New York City. He couples his executive background with more than a decade of consulting experience in the areas of leadership development, organizational effectiveness, and executive coaching.

Find more resources on Psychological Capital, including a blog post by Ted, on NotoGroup.com


Highlight from our conversation include:

  • An overview of Psychological Capital (2:32)
  • The increased stressors that employees are facing (3:52)
  • The relationship between pressure and performance (5:38)
  • The four components (HERO) of Psychological Capital (9:47)
  • Hope (10:32)
  • Efficacy (13:58)
  • Resilience (18:01)
  • Optimism (19:51)
  • How to implement the Psychological Capital framework (23:09)
  • The role leaders should (and should not) take on with their teams (26:24)
  • Why the concept of Psychological Capital is relevant in any time (28:11)
  • Ted’s advice for leaders in this moment (29:03)

Show Transcript – How I Hire Podcast with Ted Freeman

Roy Notowitz: [00:00:00] Hello and welcome to How I Hire, the podcast that taps directly into the best executive hiring advice and insights. I’m your host, Roy Notowitz, Founder and President of Noto Group Executive Search. We work with notable consumer brands in athletic, outdoor, fashion, food/beverage, and natural product sectors. 

Roy Notowitz: Hello and welcome to How I Hire, the podcast taps directly into the best executive hiring advice and insights. I’m your host Roy Notowitz, Founder and President of Noto Group Executive Search. 

We work with leading consumer brands in the athletic, outdoor, fashion, food/beverage, and natural product sectors.

This episode is unique in that we won’t be discussing executive hiring. Instead, I felt it would be way more useful to explore the idea of Psychological Capital and provide a framework that leaders can use to support employees and themselves as they navigate an extraordinary time of stress and anxiety.

My guest today is Ted Freeman, who is an organization development consultant and people and culture executive. Ted trained as an organizational psychologist before embarking on a decade of consulting and leadership development, coaching, organizational effectiveness and culture. 

He then served as Chief Culture Officer at Eileen Fisher, the leading purpose-driven and sustainable women’s apparel brand based in New York City. 

I’ve had the opportunity to collaborate with Ted in multiple ways over the past five years, initially working on an executive search at Eileen Fisher and in the past year, in his capacity as a leadership advisor to some of our clients.

Ted, thank you for joining us today. 

Ted Freeman: Thank you for having me. I’m just delighted to be here. 

Roy Notowitz: Can you start by sharing what you’ve been up to lately? 

Ted Freeman: I divide my time between my consulting practice and being an advisor to an early stage company where I am the Vice President of People, called BioLite, that provides sustainably-powered cooking and lighting equipment to people who are off the grid.

So headlamps, cookstoves fire pits for people who are camping, hiking, and doing other outdoor activities. And high-efficiency and solar-powered lighting and cooking equipment to farmers in Africa who otherwise don’t have access to electricity. 

Roy Notowitz: There’s definitely a theme, with regard to your career, with your connection to purpose and mission-driven companies.

The other day, we were talking about Psychological Capital and how you were using that framework within your work at BioLite and elsewhere. In a nutshell, can you tell us why it’s important? 

Ted Freeman: Well, let me first give you a little background on Psychological Capital. You can think of it as resources that people can marshal to meet challenges and succeed. So, at work and in life in general, people encounter challenges, stressors, and pressures, and how they respond to them and their ability to perform in the midst of them depends on the resources that they can bring to bear.

When we boost Psychological Capital, we increase people’s resources to perform well in the face of stress, pressure, challenge. So this is something that’s important always because people are always facing challenges. You know, you get hit with seven high-priority emails at once. That’s a challenge and a stressor.

Someone resigns unexpectedly. That’s a challenge and a stressor. You have a unique request from your board. You have a technology implementation that goes awry. Those are challenges and stressors and, you know, people face those every day, but right now, people are besieged by an unusual confluence of pressures.

Roy Notowitz: Yeah, I can see how that’s especially important right now. Can you tell us, in the context of the COVID 19 crisis, what you think people are dealing with or going through? 

Ted Freeman: A few of the things that I’m seeing employees face in organizations are, you know, first that there are threats out there to their physical health.

People are rightly concerned about contracting or spreading the coronavirus and may have other health issues that are complicated by the fact that our healthcare system is focused on treating people with coronavirus. People face restrictions in their daily living, there’s stress in just day-to-day activities, going grocery shopping, managing your kids’ schooling.

People are experiencing social isolations and being away from family and friends over holidays or people not being able to carry on with dating relationships. Being shut in at home with roommates or family members can create new tensions. People have economic concerns. For many, many people, millions, they’ve lost their jobs. Many more are living on reduced incomes.

And then there’s the overall concerns about a global economic recession. And then finally, there’s grief that people are dealing with. And that grief can be specific to people they know who are suffering or who have died. Or it could be more generalized just to the fact that there are so many people who are suffering and, and dying from this disease.

So any one of these things could really impinge on people’s wellbeing and affect their performance in their jobs. And I’ve just named eight that people are facing every day. 

Roy Notowitz: Okay. Let’s dig into this a little bit more. It seems like some people rise to the occasion in these situations and, you know, other people don’t.

Why is that? 

Ted Freeman: Well, let’s back up for a second and talk about the relationship between pressure and performance. When pressure on people is very, very low. And when I talk about pressure, I’m talking about, it could be pressure from inside yourself, like your motivation to do a good job or it could be pressure from outside, external demands on you.

People asking you to do things, people telling you to do things, people setting expectations. So when that pressure is very low, performance is low too. It’s kind of like you’re in vacation mode, right? You’re laid back. You don’t need to deliver a lot. You add a moderate amount of pressure or stress, and that could be someone’s internal motivation to get something done or it could be external.

When that happens, performance goes up and it continues to go up with pressure to a certain point. When pressure gets too high, performance drops off and people become forgetful. They may be distracted, they may have lapses in judgment, they may be more nervous about making decisions and not take some of the risks that they really should take.

And of course, when pressure is extremely high, people can break down. They fail to perform altogether. So, a metaphor that can be helpful here is around swimming. You know, if you’ve ever been a competitive swimmer or been around competitive swimmers, you would know that they pay attention to the temperature of the pool because when the water’s warm, 85, 90 degrees, race times are pretty slow.

It’s very comfortable. There’s not a lot of pressure on your body, but the performance isn’t that great either. Now, as the temperature goes down, so it may be in the high 70s, maybe 80 degrees, people swim much faster, so performance goes up, but at a certain point, if that temperature keeps dropping, race times are going to go down again.

Performance is going to go down again, and of course, you know, at the extreme end, you’re talking about people not even getting in the pool because water’s so cold, or if they do, you know, they’re at risk of hypothermia.

Now, everybody’s tolerance for pressure is different, and as you say, some people absorb it and they function pretty well, and other people get rattled or lose focus. So everybody’s pressure/performance curve is a little bit different. But when you’re looking at an entire employee population and you know that there are a lot of extraordinary external pressures that are pressing on everyone, then you can expect that for a meaningful proportion of those employees, that extraordinary pressure is creating anxiety and compromising performance. 

Roy Notowitz: So, people are experiencing extraordinary pressure and anxiety right now and you could argue always, and it’s likely to affect performance. So what do we do about it? 

Ted Freeman: Well, one thing that we cannot expect is that we’re able to control everything about these circumstances.

I mean, you and I are doing our part in terms of keeping ourselves healthy and limiting, you know, the transmission of the COVID 19 but we cannot, on our own, affect the course of the pandemic. Similarly, you and I doing our part around moving the economy forward, but we’re not going to control, you know, on our own, the global economic recession.

So it’s not so much about focusing on controlling those circumstances, but it is about focusing on the things we can control, at least to some degree. And those are the resources we bring to manage ourselves in the face of these challenges. And that’s where the concept of Psychological Capital comes in.

Roy Notowitz: It’s interesting how this pandemic has really brought that to the forefront, that there are things you just can’t control. And I think that makes it so, so difficult for so many people. Tell me more about Psychological Capital and how it’s defined. 

Ted Freeman: Psychological Capital, it’s a concept that has attracted a lot of research attention in the last 20, 30 years.

It has four components to it. Hope, efficacy, resilience, and optimism. And I’ll talk about each of these, but it’s easy to remember them because, conveniently, H-E-R-O spells out the acronym HERO. The more hope, efficacy, resilience, and optimism you have, the better you’re able to manage and perform well in the face of stressors and challenges.

Roy Notowitz: In the way that you use it, does hope mean what we usually think, like thinking things will get better? 

Ted Freeman: There are some important nuances to the definitions. Let’s start with hope. So the definition that we use has two parts to it. One is the willpower to pursue goals and the second is the ability to generate alternative paths when something gets in the way of those goals.

So let me tell you a story about a conversation I had a couple of days ago. A colleague of mine was coming in after the weekend and I asked her, “How are you on a scale of one to five?” And she said, “You know, I’m a three.” I said, “What’s making you a three?” 

She said, “Well, I spent my weekend sewing masks and reading a lot of very disturbing news and I was alone the whole time. I wasn’t in a physical presence of anybody else for the entire weekend. Honestly, quarantine Mondays are really hard for me. I just feel like, you know, nothing matters in light of everything that’s happening in the world right now. How could these tasks that I have in front of me be important?”

I’ve got my Psychological Capital hat on and I’m thinking, there’s a depletion in hope here. It’s not completely hopeless but she’s not sounding very hopeful. So I’m not going to say to them, “Hey, next Monday won’t be so hard. Let’s get down to business.” What I want to do is focus on her goals and her ability to generate alternative paths around the goals.

So I said, “How about you and I sit down together later today and we look at what you were working on before we entered into this whole coronavirus thing, because before we got pulled into, you know, all the work around that, you had some initiatives that you were working on. Let’s check back and see whether those are still relevant and how you’re feeling about them.”

She said, “Great, that’d be great. I’d love to do that.” And I said, “And honestly, it would be helpful for me too.” So when we sat down later that day, she went through and she’s talked about those things. You know, if there were five things that she was working on, we identified that four of them were still relevant and three were priorities, and they were all things that she was still really excited about.

So we reengaged her in that. And then we said, “You know, we’re working very differently now. We’re now working remote. We have some new challenges upon us. Tell me how you could move forward on, you know, priority A in light of where we are right now.” So, that’s focusing on the goals and her ability to generate alternative paths when she’s running up against the challenge.

I said, “So listen, you know this morning you came in, you said, quarantine Mondays are hard. How you doing now?” She said, “You know what? I feel really unstuck. I feel motivated. I’m excited to work on these goals. I feel like I know how I’m going to move forward.” It was a different conversation. She was in a different place, and to me, what I saw change was, A, something about her wellbeing and B, something about her performance. 

What I saw was that she was not going to be taking a sluggish, distracted approach to these important initiatives. She was going to be taking a focused, engaged approach to these initiatives. 

Roy Notowitz: That’s a great example. 

Ted Freeman: Okay, so the definition that we use around efficacy is confidence in one’s ability to successfully execute. And one way that we can do that is to give people positive feedback. Now, I want to pause on that positive feedback thing because I think that there are ways of giving positive feedback that can be more impactful and can have more of an effect on raising people’s efficacy. I think sometimes people think that positive feedback is like this, “Hey, great job in that meeting, keep it up.”

Now that’s a fine thing to say. It’s encouraging and so on, but it is not as impactful as saying something like, “Hey, there were some materials that you created for that meeting. I was listening and watching very closely. They were clear. They were compelling, I think, as a result of the hard work that you did on that, that the employees listen to that, they have a better understanding of what we’re trying to do, a clearer understanding of how their work will support that and I think it’s going to make a big difference.” 

So that’s being very specific about the behavior that the person gave and very specific about the impact of that behavior. So that’s the kind of thing that can make a difference in terms of people’s confidence in their abilities to do things. 

Roy Notowitz: That makes a lot of sense and it seems like that would be a practice that many leaders might already be implementing just because it seems like a good way to tie back to the bigger picture, but can you give us another example to demonstrate efficacy? 

Ted Freeman: Another way to think about elevating efficacy is to focus on people’s success experiences or people’s strengths. So, there’s a book that I have on my bedside table called Thinking, Fast and Slow by the social psychologist Daniel Kahneman. He won a Nobel Prize for his work on decision making and its effect on economics.

So one of the things that he talks about is various studies where people were primed to just think about old age. So they, you know, were presented with words like elderly, frail, other things associated with being old. Guess what happened? After that, when people were asked to perform a task, like a physical task, they actually acted older.

Roy Notowitz: Wow, that’s crazy. 

Ted Freeman: So with, you know, professional athletes, they’re trained to spend time visualizing success, to sit somewhere quietly before a game with their eyes closed and visualize hitting the ball. Visualize making the free throw, visualize kicking the ball into the goal or over the field post. They’re not invited to visualize failure. They’re not invited to visualize missing that shot.

Roy Notowitz: Yeah.

Ted Freeman: Because we know that visualizing the positive experience increases the chances that you will actually do it when the moment arises. So here’s a quick tip. Let’s tie this back to being a manager and working with your team. If you’re sitting down for a check-in with your team, one thing that you can ask them that’s going to help elevate their efficacy is, “Tell me about your greatest success or your most impactful moment of the last week.” That primes people around their skills, their strengths, those kinds of things, and increases the likelihood that they’ll re-enact them. 

Roy Notowitz: Hmm. That’s cool. I’m sure everyone can adapt that for meetings in a way that would work for them in an authentic way. That’s, that’s interesting. You know, can you tell us a little bit about the R and O part, the resilience and optimism part of the HERO acronym? 

Ted Freeman: Resilience is the capacity to bounce back from adversity.

I hate to give this short drift because it’s a big concept. Many, many, many books have been written about it, but just a couple of ways in which people can think about promoting those. You know, one is healthy habits. Physical activity is not only good for your body, it’s good for your mind. It gives you a different level of capability to bounce back when things don’t work out.

Other healthy habits: setting boundaries around your intake of distressing news. So I know for me, when, in the early weeks of this COVID era, I was receiving constant notifications from The Washington PostThe New York TimesThe Wall Street Journal. Every couple of minutes my phone would light up with something and I was reading all of it. Consuming all of it. I had to turn those notifications off. I needed to create a different level of control around what I was taking in.

I think another thing that’s important, related to resilience, is to recognize that anxiety is normal. These threats that are out there, they’re real threats and what anxiety or other distressing feelings are doing, it’s your body telling you to be alert to those things. 

Now, the anxiety itself is not something to be afraid of. Anxiety is a message and I think once you’ve noticed that, people can then make a choice about what they want to do with that information. 

So all those things, healthy habits, boundaries around an intake of distressing information, knowledge about how anxiety works. Those are all things that can help with resilience. 

And then the last part of the HERO concept of Psychological Capital is optimism. And optimism certainly is about expecting good things to happen. But, I think to take it a step further, it is, when good things happen, you attribute that to things that are personal, permanent, and pervasive.

And I’ll explain what that means in a second, but it’s also that when bad things happen, you attribute that to external, temporary, and situational causes. Say a bad thing happens, right? You don’t say to yourself. One, “That was my fault.” Two, “This always happens to me.” Right? You don’t say those kinds of things. 

When bad things happen, you may more realistically say, “Hey, I had a part in this and I can learn but there were some other things happening that were conspiring against me.” Those things don’t last forever, but so that’s a very different kind of mindset. So what does that look like in terms of helping to elevate people’s optimism? Let me give you an example. I have a colleague, a friend, and I was in conversation with this person in the first couple of weeks of the coronavirus outbreak.

They said to me, “These moments of adversity, these are the moments when I shine. I am going to put my head down. I’m going to work harder than anyone else, and I’m going to beat this thing. I’m going to beat this wave of disease. I’m going to beat this wave of economic recession.” The person did an amazing job, very thoughtful, moved a lot of things forward, but in week three I talked to them and they were depleted.

They were blaming themselves. They were doubting themselves. They were stuck in a place of some self-criticism. And I took the moment not to say, “Hey, things are going to get better.” Right? Which is a way that people might approach optimism, but instead to remind the person that the things that they were doing A, were the right things.

B, reflected their skill and their hard work, but there were things outside their control at this moment that were working against them. So it’s kind of helping a person recalibrate what’s happening in this moment, you know, thereby hopefully elevating their Psychological Capital a little bit. So anyway, those are the four components.

It’s a lot of information, but the thing to remember is this: in moments of crisis, people can be overwhelmed. As a result of that, their performance can decline. There are evidence-based practices that we can undertake to elevate people’s Psychological Capital and when they’re done right, because I’ve given some examples of how people kind of approach that generally, when they’re done right in specific kinds of ways, they make a big difference, not only in people’s wellbeing, but also in their performance. 

Roy Notowitz: This is a great framework. There’s a lot of depth to that. So then how is this put into practice? 

Ted Freeman: You know, I’ve been working with some leadership teams to first identify what the risks are to their teams. So for them to get a really solid picture of what’s happening for their employees. And then to learn about and begin to deploy some of the specific and effective methods of increasing people’s Psychological Capital. 

So just to give you a sense, at BioLite, we had a strategy for COVID response, and part of the strategy was certainly based on our business. Changes that we needed to make, not only in where our focus was in ways to reduce risk, in ways to manage cash, you know, all those kinds of things, which any business hopefully was doing.

And we also had a people strategy. So, how we moved our people to remote work, how we communicate to people with extraordinary transparency as well as regularity. You know, what are the things that we do to keep people connected with each other, both from a work perspective and from a social perspective? What are the networks that we need to activate in the organization to keep the performance going?

And I would say we were effective on both fronts of that strategy. And then we said, you know, we’re starting to see the virus get closer to home. We had people who had family members who passed away. We had people who had roommates tested positive for coronavirus. We had people who had to bring large pieces of equipment home to their studio apartments, set them up every day, take over the entire space for themselves and their partner, and then break it all down at the end of the day so that they could return to some semblance of normality, watch TV and go to bed.

We were seeing these stressors build up in people. And so we said, all right, what can we do next? And we engaged, first, the senior leadership team in learning about the concept in Psychological Capital and beginning to adopt some practices with their team and then rolling that out into departments. So having, on a team by team level, people learning not only how I can use the Psychological Capital framework to support people who report to me, but also how people can use it themselves.

What kind of practices they can adopt on their own to preserve their hope, efficacy, resilience, and optimism and stay focused on their work.

Roy Notowitz: Yeah, I think that’s an interesting thing to call out about leaders and taking care of themselves and managers and how that’s a critical element of this, because it’s sort of like the oxygen mask analogy.

Do some leaders get uncomfortable because they feel like they’re maybe being a little bit intrusive or being somebody’s therapist? How do you avoid that or can you create some clarity around how to create boundaries there? 

Ted Freeman: Yeah, I mean, I think it’s very important to be clear about the role that leaders should and should not play.

Leaders are not therapists. They’re not doctors. They’re not crisis counselors. They’re not even best friends. So we’re not asking them to be any of those things. And you know, I think it’s important for them to be alert to when they might be pulled into a role like that. And they need to refer someone to an HR professional, an employee assistance program where they need to pull themselves out of this conversation and get some help from someone else.

But I also want to be clear about what leaders and managers should be doing in this role. From my perspective, A, they should be concerned about the wellbeing of their people. And B, they should be responsible for helping them perform well. And so that’s what we’re asking leaders to focus on. I want to be clear, the goal here in using these techniques for elevating Psychological Capital, the goal here is not to turn someone around 180 degrees.

The goal here is not to change someone’s personality. It’s not even to make a 45 degree shift for someone. It’s about making a 5 to 10 degree shift in helping them better manage these pressures and perform well in addition to, you know, preserving their wellbeing. 

Roy Notowitz: This seems like such a great model that could be used beyond the pandemic. I mean, is this something that people can use later, under normal conditions or under conditions when we’re going through the recovery? 

Ted Freeman: Yeah, I mean, certainly it has a particular relevance at this moment, but Psychological Capital did not emerge with the rise of the coronavirus and it’s not going to disappear when, you know, when we have the coronavirus contained. This is something that people can be using all the time, and good managers have these kinds of frameworks in their minds and these kinds of practices in their toolkit where they’re be able to recognize something that an employee needs and do something about it. So it does have particular relevance today given the amount of pressures that people are under. But it’s a skill. It’s a practice. It’s a framework that can be used all the time.

Roy Notowitz: Yeah. If there is one thing that you suggest leaders think about in this moment, what is it?

Ted Freeman: Stay connected to your people. I would say to do that in specific ways. So I think a lot of people are asking their direct reports, “How are you doing?” And they’re asking them that more frequently, but on a kind of casual basis.

And I think that when you ask people, “How are you doing?” You’re going to hear a lot of people saying, “I’m fine,” when they aren’t fine. So a better way to ask is to say something like, “Hey, on a scale of one to five, how are you? Tell me why you’re a five, a four, a three or a two.” Or say to someone, “Hey, we haven’t talked in a couple of days. Tell me one good thing and one hard thing that’s happened.” That will help to better understand what’s going on with people and what they need in terms of elevating their Psychological Capital. 

Roy Notowitz: I’m curious, like if somebody has more optimism or resilience and they’re showing up, you know, with a stronger Psychological Capital than somebody else. Can that turn somebody off or put somebody off in the sense that somebody might not be feeling as positive at that particular time? Or is that something that leaders need to tone down or be aware of? 

Ted Freeman: Yeah, I mean, I can imagine it working a couple of different ways. One is that sometimes those can be infectious. You know, let’s say a leader showing a certain orientation toward, you know, optimism and, and so on, that that can be contagious to other people. Sorry to use the word contagious at this time. On the other hand, if people are not able to connect with that, then it can be invalidating of their experience.

I am really struggling and you come to me with expressions that are upbeat and positive and kind of ignoring what’s going on with me. I’m just going to disconnect. I’m going to unplug. 

Roy Notowitz: So how do you sort of read that or balance it? Is that something that’s just an individual perceptivity kind of thing? Because we’re all on video now, it’s a little bit harder.

Ted Freeman: Right. What we know about emotional intelligence is that people who have it can do a few things. They can recognize emotions that are happening in themselves and others, and they can manage emotions that are happening in themselves and others. So being tuned into that is one way that people can suss out how to engage with their partners and their employees.

Roy Notowitz: Ted, this is great. Even just talking to you is calming to some degree. It’s probably why I call you all the time. I really think that Psychological Capital and the framework that you provided will be really helpful for so many people right now. And I think there’s a lot of practical ways that people can elevate performance and employee wellbeing in any context. And I just wanted to say, I really appreciate all that you do for my firm and the clients and my team. It’s such a pleasure to work with you, so thank you. 

Ted Freeman: Oh, great, Roy. Well, the feeling is mutual and I love our shared goals around working with organizations that are doing great things and just making them better.

Roy Notowitz: Yeah, I definitely appreciate your time today and if somebody wants to learn more about Psychological Capital, where would you recommend that they go? 

Ted Freeman: Certainly people can reach out to me directly at ted@notogroup.com and why don’t we put up some stuff on the website so that people can access it. No reason to keep it secret.

Roy Notowitz: That’s perfect. Thank you so much, Ted, and I’ll talk to you soon. 

Thanks for tuning in to How I Hire. Visit HowIHire.com for more details on the show and sign up for our newsletter to get updates and featured career content. 

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How I Hire is created by Noto Group Executive Search. To learn more about Psychological Capital and Noto Group, please visit NotoGroup.com or follow us on LinkedIn

This podcast was produced by Anna McClain.


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