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the most important equation a business leader need ever know

This paper describes the results of a unique research project into what motivates people at work. Using the team-to-togetherness (t3) model for assessing high-performing teams (HPTs), this research examined the degree to which membership of a HPT influences such motivation and effort, in relative comparison to other potential factors such as wages, contingent benefits and fixed-intrinsic traits. With the findings revealed, the paper then provides pragmatic advice for ambitious organizational leaders as to how to maximize such employee effort; an investment that, in turn, invariably begets increased levels of employee performance and organizational success.


This paper titles with a deliberate tease; part in copy-writing flourish but primarily with a genuine and very-serious edge. We truly mean it when we say: that this paper will reveal the most important equation a business leader need ever know. Before we get into the what, the why and the implications of all of this, let’s cut to the chase. If you are involved in leading others at work, make an indelible note of this now:


Figure 1: The most important equation a business leader need ever know

This paper will reveal how the equation was derived from research, what it all means, why it is crucial to your organizational success and, most importantly, how you can use it – at a very practical level – to unlock massive business value in your own venture.

The reveal will happen in stages; let’s start with the subject matter domain and the overall structure of this paper. The dependent variable (E) concerns employee motivation and effort. As we unpack the right-hand side together (the independent variables: Y, Z and IS), you will learn what drives E (and the relative contribution of each of these factors). We will also, by the corollary of absence, reveal what doesn’t impact on E: in direct contrast to dominant, lazy supposition and lingering, historical theory.

Why is this important? Well, if you have any professional concern whatsoever with respect to business or organizational performance you should, de facto, be concerned with optimizing employee performance. Manifestly, employee motivation and effort (E) has a major contributory role to play in driving employee performance. If you accept this simple train of logic then you will understand the significance of this equation. Simply put: for the clear majority of ventures (all those with people involved!) results hinge largely on employee performance which, in turn, hinges heavily on employee motivation and effort (E). Unlock E and you unlock the full potential of your venture.

Before we continue, we need to allay some early reader misperception or concern. Understanding employee performance, employee motivation and how to maximize such matters is a grubby, real-world concern not readily translatable into abbreviations and equations. The motivation of others is not something that happens in some sterile laboratory under the gaze and direction of earnest academics. So, for now, please just be assuaged by the fact that – at Perpetual – we write this as practitioners not observers.

As such, as soon as we have succeeded in explaining the research and statistics to you, we will draw on our collective, grounded professional experience, to draw us quickly towards a pragmatic “so what”.

The paper will proceed as follows. Firstly, some background and an explanation of how this all came about (for the curious reader, we will steer you towards what theory – neo-classical economics as well as more recent work – tells us about this topic). Next, it will describe the research project that led to this fascinating equation. The research tested an intuition we have long held concerning the importance of teamship and, as such, we had to adopt a model for assessing teams. The model used is our team-to-togetherness (t3) model: it sits at the heart of the findings so it is important we explore that carefully also. Only then, can we fully reveal the actual research findings before, finally, turning to the manifold implications this has for all real-world business leaders.

With that groundwork laid, let’s get going …

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