DALLAS RECEPTION:

Discovering Phi: Motivation as the Hidden Variable of Performance

Based on 18 months of research including in-depth interviews with 200 industry leaders and a survey of nearly 7000 respondents globally, the State Street Center for Applied Research and CFA Institute set out to answer one fundamental question:How can we leverage motivation to achieve better financial outcomes?

Through this effort, we discovered a hidden variable with a statistically significant relationship to long-term organizational performance, client satisfaction and employee engagement.

We quantified and named this previously hidden variable Phi. Phi is derived from the motivational forces of purpose, habits and incentives that govern behaviors and actions. We have found that employees with a high degree of Phi deliver far superior performance on a long term basis than those that don’t on each dimension we measured. Specifically, every one point increase in Phi is associated with 28 percent greater odds of excellent organizational performance, 55 percent greater odds of excellent client satisfaction and 57 percent greater odds of excellent employee engagement.

Those who build a culture and environment with the purpose, habits, and incentives that lead to Phi will have a competitive advantage, sustainable across market cycles that will benefit clients, the providers themselves and ultimately society as a whole.