Our Research
At The Institute for Health and Human Potential (IHHP), we have dedicated over a quarter-century to pioneering research in the domain of leadership development. We survey upwards of 40,000 individuals monthly, using our proprietary Emotional Intelligence (EI360) assessment, the Last 8% Culture Assessment, in-depth leadership interviews, and an array of web-based surveys accessible to the general public. This endeavor has yielded profound insights into human behavior, helped us understand the challenges leaders and organizations face, and driven the design of our learning so that it is sticky, powerful and transformative.
Research On Risk Taking and The Last 8%
Background: The Story Behind The Last 8%
After a hard-fought internal battle, a new CEO was named to lead a one of the largest organizations in the hotel and food space. He beat out the other internal candidate, who despite being recruited to lead another organization, stayed on to assume the ‘second in command’ role to the new CEO.
Over time, their new relationship began to struggle, and the organization asked one of our senior consultants to coach the two of them. Relations had gotten so bad between the two leaders that they asked our consultant to mediate a final conversation between the two of them that would act as either a ‘Hail Mary’ attempt at reconciliation or an exit interview.
Though tense at times, the two and half hour mediated session a week later between the three of them went reasonably well. When each of the leaders was asked in their next individual coaching sessions how the conversation went, they both agreed, independently, that it went much better than expected and they each felt many of the issues had been suitably cleared up and that there was reason for optimism. Then they were asked two questions that set off IHHP’s next research agenda for the next several years. First question: “did you say everything you wanted to say to the other person?”
Both instantly answered, “yes, absolutely”. They each had believed they had said everything they wanted to say to the other person. However, it was obvious to the consultant, who had spent considerable time coaching each of them and knew the issues in detail, that they were each holding back important information they really wanted to say to the other. They were leaving important stuff ‘on the table’. So, he asked them again: “really, you said everything you really wanted to say to them?”
Finally, each of them agreed they didn’t say everything they wanted to say. Then they were asked a second question, “what percentage of what you really wanted to say did you leave out?”. They both replied in roughly the same way: “more than 5%, less than 10%”. And that was the impetus that started our journey attempting to quantify the percentage of hard stuff people struggle with when facing difficult conversations, decisions and situations.
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Study 1: Research Methods
From January 1, 2014, through December 31, 2014, we surveyed 34,959 individuals in organizations about making hard decisions, giving critical feedback up and down, naming inconvenient truths, and having the hardest parts of a conversation. We analysed a subset of 20,959 respondents.
Data Analysis
Item: Think about tough conversations you faced in the past 6 months that required you to give critical feedback, speak the truth to someone, or deliver information up to your boss etc. Were there times when you avoided or deferred having the full conversation? That is, did you say everything you wanted to say or did you avoid some parts of the conversation? Estimate the percentage of the conversation you avoided?
Range | Count | Percentage |
1-5% | 6,659 | 31.77% |
6-10% | 2,828 | 13.49% |
11-15% | 1,447 | 6.90% |
16-20% | 880 | 4.20% |
More | 620 | 2.96% |
N/A | 2,110 | 10.07% |
Avoided Responses | 6,415 | 30.61% |
For the category “1-5%”, the midpoint is 3%. For the category “11-15%”, the midpoint is 13%. For the category “16-20%”, the midpoint is 18%. For the category “6-10%”, the midpoint is 8%.
Total Avoidance= (6,659×3)+(1,447×13)+(880×18)+(2,828×8)+(620×25) = 92,752
Total Frequency=6,659+1,447+880+2,828+620 = 12,434
Average Avoidance= Total Avoidance
Total Frequency = 92,752/12,434
=7.56% is the average percentage of avoidance
Discussion
What we’ve found is that people are not especially adept at doing these kinds of hard things in organizations. For instance, we found that people leave out or avoid, on average, approximately 7.56% of what they want to say in a difficult conversation. They are comfortable enough discussing the first 92.44% of what they want to say, but when they get to the more challenging parts—the parts that have consequences for the other person or the project—they get caught up in how the other person is reacting, or is perceived to be reacting, and they avoid having the full conversation.
It is the same with decisions: most people are comfortable enough making the easier decisions they face, but when it comes to the more difficult ones—those they perceive will upset other people, such as who gets promoted and what projects should get backed—they back off, procrastinate and struggle to take action.
Hard conversations and decisions are all about risk, and this gap, between what people want to do and what they actually do, we have named, the Last 8%. These are the conversations and decisions that don’t happen or take too long to happen because doing it feels too risky.
Last 8% Is More Than Conversations
It is important to understand that while the Last 8% shows up in and is easily illustrated in conversations, they show up beyond conversations. They show up whenever you experience risk and need to make a decision around risk. Such as:
- giving critical feedback,
- suggesting a new idea,
- saying no to a request
- holding someone accountable,
- making a tough people decision,
- making a tough strategy decision,
- naming an inconvenient truth,
- experimenting with a new way of doing things,
- admitting a mistake
All of these situations cause you to make a calculation about whether you have the internal skills to execute the behavioralong with an assessment of whether you feel the environment is yielding to your efforts and the risk you are contemplating.
Other Data Points of Interest
- Respondents reported facing both Unexpected Last 8% moments than Expected Last 8% moments.
- That is, 59% of the time, individuals faced a difficult interaction or situation, in a meeting, or conversation, (or elevator) when they were surprised by the interaction, were caught off guard, and did not have time to prepare for it. An example being when someone asks a tough question or gives pointed feedback in a situation that was not ‘on the agenda’ and the person was not prepared for it.
- 41% of the time, individuals faced an Expected Last 8%, where they had time to plan and prepare for it. They may even have initiated this Expected Last 8% after an Unexpected Last 8% had caught them by surprise and they were unprepared for it the day or sometime before.
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Study 2:Correlation of Connection, Courage,
Engagement & Performance
From January 1, 2014, through December 31, 2014, we surveyed 2,288 individuals in organizations about perceptions of their team, how connected and psychologically safe people felt on the team, their relationship with their manager, courage displayed on the team (inputs into performance), levels of engagement and correlated it with perceptions of performance (innovation, agility, turnover).
Data Collection
- The primary data has been collected from 2,288 respondents to assess various individual variables and major constructs within an organizational setting.
- The statistical analysis in this study includes Pearson’s correlation coefficient for all the individual variables, and the major constructs, which helped in identifying the strength and direction of the relationships between the variables.
These constructs were measured across different dimensions of organizational behavior and attitudes, providing insights into how employees perceive their interactions and environment at work. The study’s use of statistical analysis provided valuable insights into how individual variables and constructs interrelate within the organizational context. Most relationships were statistically significant, which strengthens the reliability of the findings. The use of Pearson’s correlation coefficient helped in quantitatively assessing these relationships, making the conclusions drawn from the data robust.
Items:
1. Relationship with Manager Variables
- I have regular one to one meetings with my manager.
- My manager gives me all the information and context I need to do my job well.
- My manager communicates clearly what is expected of me in my role.
- My manager shows a genuine interest in my professional development.
- My manager recognizes how his/her behavior affects others.
- My manager utilizes criticism and other feedback for their own growth.
- My manager stays calm under pressure.
- My manager stays positive in difficult circumstances.
- My manager becomes defensive when criticized.
- My manager can deal with difficult interpersonal situations skillfully.
- My manager tries to see from another’s perspective.
- My manager has regular development conversations with me.
It is evident that the each of the variables representing relationship with manager is positively correlated with innovative and agile team at a low to moderate level (r is ranging from 0.300 to 0.480, p<0.01), but no correlation is observed with team turnover.
RM1 | RM2 | RM3 | RM4 | RM5 | RM6 | RM7 | RM8 | RM9 | RM10 | RM11 | RM12 | Innovative | Agile | |||
RM1 | ||||||||||||||||
RM2 | .435** | |||||||||||||||
RM3 | .454** | .786** | ||||||||||||||
RM4 | .446** | .638** | .609** | |||||||||||||
RM5 | .412** | .646** | .624** | .659** | ||||||||||||
RM6 | .237** | .448** | .431** | .500** | .500** | |||||||||||
RM7 | .395** | .574** | .542** | .536** | .678** | .451** | ||||||||||
RM8 | .353** | .614** | .562** | .541** | .699** | .463** | .798** | |||||||||
RM9 | .313** | .510** | .436** | .492** | .649** | .447** | .591** | .639** | ||||||||
RM10 | .293** | .646** | .626** | .614** | .690** | .502** | .608** | .599** | .548** | |||||||
RM11 | .391** | .622** | .569** | .622** | .727** | .501** | .681** | .710** | .600** | .662** | ||||||
RM12 | .541** | .647** | .677** | .759** | .664** | .489** | .551** | .557** | .494** | .635** | .618** | |||||
Innovative | .195** | .323** | .343** | .361** | .376** | .289** | .346** | .278** | .269** | .383** | .303** | .389** | ||||
Agile | .140* | .374** | .377** | .369** | .398** | .334** | .353** | .320** | .309** | .447** | .368** | .349** | .533** | |||
Turnover | .045 | -.105 | -.058 | -.082 | .003 | -.013 | .069 | -.026 | .011 | -.091 | -.081 | -.074 | .055 | -.117* | ||
**. Correlation is significant at the 0.01 level (2-tailed). | ||||||||||||||||
*. Correlation is significant at the 0.05 level (2-tailed). |
2. Courage Construct Variables
- People on my team have the courage to make difficult decisions.
- On my team, we have a feedback rich culture (managers/colleagues provide constructive feedback on each others work).
- I feel comfortable taking calculated risks on my team.
- I feel safe admitting a mistake on my team.
- I feel free to speak my mind without fear of negative consequences.
- I feel comfortable giving feedback to my immediate manager.
- People on my team are held accountable for delivering on their commitments.
- People name inconvenient truths (difficult to discuss issues) on our team.
- Toxic behaviours are not tolerated on our team.
It is evident that the each of the variables’ representing courage is positively correlated with innovative and agile team at a moderate level (r is ranging from 0.320 to 0.499, p<0.01) and only C1 at a high level (r is above 0.50).
C1 | C2 | C3 | C4 | C5 | C6 | C7 | C8 | C9 | Innovative | Agile | |||
C1 | |||||||||||||
C2 | .583** | ||||||||||||
C3 | .532** | .464** | |||||||||||
C4 | .547** | .450** | .685** | ||||||||||
C5 | .539** | .593** | .552** | .578** | |||||||||
C6 | .439** | .539** | .463** | .538** | .623** | ||||||||
C7 | .464** | .546** | .301** | .271** | .395** | .310** | |||||||
C8 | .430** | .486** | .319** | .378** | .418** | .368** | .354** | ||||||
C9 | .482** | .501** | .422** | .484** | .516** | .389** | .476** | .398** | |||||
Innovative | .516** | .495** | .348** | .335** | .406** | .385** | .417** | .382** | .320** | ||||
Agile | .595** | .451** | .410** | .420** | .367** | .380** | 428** | .314** | .449** | .533** | |||
Turnover | -.059 | -.039 | -.057 | -.110 | -.075 | -.030 | -.022 | -.024 | -.091 | .055 | -.117* | ||
**. Correlation is significant at the 0.01 level (2-tailed). | |||||||||||||
*. Correlation is significant at the 0.05 level (2-tailed). |
3. Connection Construct Variables
- My manager values my opinions and contributions.
- My manager cares about me as a person.
- I feel recognized for my hard work and contributions on my team.
- I feel comfortable asking for help every time I need it.
- In my day to day I believe we work well together as a team.
- I trust the people on my team.
- I am excited to be part of this organization and its future.
- I would recommend a friend or family member to work for our company.
- I feel energized by my organization’s goals and motivated to contribute to its success.
- I still intend to be working for this company for:
- Most people on my team give extra effort.
- This organization as a place where I can really grow and develop.
- My work gives me a sense of personal accomplishment.
- The level of work pressure and stress I experience is manageable.
It can be concluded that the each of the variables representing connection is positively correlated with innovative team at a moderate level (r is ranging from 0.300 to 0.470, p<0.01) except for CN2 that showed a weak correlation (r = 0.240). This is same for the agile team except for CN5 that showed a strong correlation (r = 0.553). However, except for CN2 at a weak level, no correlation is observed with team turnover.
CN1 | CN2 | CN3 | CN4 | CN5 | CN6 | Innovative | Agile | |||
CN1 | ||||||||||
CN2 | .743** | |||||||||
CN3 | .637** | .541** | ||||||||
CN4 | .564** | .515** | .548** | |||||||
CN5 | .483** | .423** | .534** | .483** | ||||||
CN6 | .466** | .415** | .549** | .500** | .586** | |||||
Innovative | .306** | .240** | .371** | .339** | .467** | .410** | ||||
Agile | .385** | .333** | .393** | .371** | .578** | .485** | .533** | |||
Turnover | -.065 | -.160** | -.100 | -.075 | -.113 | -.096 | .055 | -.117* | ||
**. Correlation is significant at the 0.01 level (2-tailed). | ||||||||||
*. Correlation is significant at the 0.05 level (2-tailed). |
Discussion:
The interplay between courage and connection as drivers of organizational culture is evident in the data. Cultivating these elements can make teams more innovative, agile (adaptable), with lower turnover and with higher quality of work. Organizations that understand and leverage these relationships can create environments where employees thrive and contribute to their fullest potential, thereby enhancing overall performance and satisfaction.
Implications for Organizational Strategy:
Based on these findings, organizations are recommended to:
- Expand focus to creating both ‘high connection’, where people feel psychological safe, valued and have a voice, and ‘high courage’, on teams, where people are equipped with the tools and the environment to take risks (name inconvenient truths, speak up, admit mistakes, make hard decisions, have difficult conversations) and build accountability on the team. You need both connection and courage for high performance.
- Relationship with managers is a strong driver of people feeling engaged, which is a mediator for performance.
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Study 3: Perceptions of Team Characteristics
We surveyed 72,345 from Jan. 2023 – June 2023. All survey participants, who ranged in level from individual contributors to line managers to C-level executives participated. Respondents were not required to respond to all questions.
We asked respondents for perceptions of their team based on findings derived from the study: Correlation of Connection, Courage, Engagement and Performance, specifically, where they perceived their team to be in terms of connection and courage.
18% reported the culture on their team to have features of high courage and low connection as exemplified by characteristics of blame, prioritization of results over relationship, high anxiety and high burnout and where people were afraid to speak up for fear of being reprimanded. People on these teams reported not feeling valued, having a voice but would get feedback.
We termed this cluster as Transactional culture.
12% reported the culture on their team to have features of low courage and low connection as exemplified by characteristics of inconsistency of feeling valued, having a voice and receiving feedback that led to low risk taking.
We termed this cluster a Fear-Based culture.
37% reported the culture on their team to have features of low courage and high connection as exemplified by characteristics of feeling valued, having a voice but not receiving feedback. There were mediocre standards, slow decision making, and people did not speak up for fear of hurting other people’s feelings. It was an avoid culture.
We termed this cluster a Family culture.
33% of people reported the culture on their team as being high in both connection and courage as exemplified by feeling valued, having a voice and having feedback rich environment. There was a balance of results and relationship and high trust which led to high experimentation and innovation.
We termed this cluster a Last 8% culture.
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Study 4: Building the High-Performance Workforce:
A Quantitative Ananlysis of the Effectiveness of Performance Management Strategies
Overview of Research Methodology
- The Corporate Leadership Council used two survey techniques to identify which performance drivers have the highest impact on individual performance. First, the Council surveyed both managers and employees on virtually all facets of performance management. The Council combined these survey results with company-supplied data on the employees and managers who took the survey, allowing for detailed analysis of the impact of specific performance management levers.
- Second, the Council used a statistical technique, structural equation models (SEMs), to assess the direct and/or indirect impact of each performance driver.
- The result of this research is a list of performance drivers, in rank-order of their impact on individual performance, that will allow organizations to target their performance management resources most effectively.
Focus of the Research
- The research investigated seven categories of potential performance management drivers: the performance management system, performance culture, manager-employee interaction, formal performance reviews, informal performance feedback, day-to-day work, and job opportunities.
High-Performance Culture
- The cultural trait with the largest impact on employee performance is risk taking—the extent to which an organization encourages high-risk, high-return ideas and investments. After risk tolerance, internal communication (the extent to which there is good communication between peers and between employees and managers) and organizational flexibility (an organization’s effectiveness at adapting to change) top the list.
- The emerging definition of the high-performance culture: a community of openness, where one is encouraged to experiment, take risks, and try new things, and mistakes are viewed as a necessary by-product of achievement.
Each bar in the chart above presents a statistical estimate of the maximum total impact on employee performance each strategy will produce. The total impact includes the strategy’s direct impact on performance as well as any indirect impact it may have through employee attitudes. The maximum total impact is calculated by comparing two statistical estimates: the predicted performance level for an employee who scores “high” on the strategy and the predicted performance level for an employee who scores “low” on the strategy. The impact of each strategy is modeled separately. A strategy that fails to achieve traditional levels of statistical significance is denoted with a clear bar (t < 2.0).
Source: Corporate Leadership Council 2002 Performance Management Survey.
Indirect and Direct Impact
- The research below outlines the indirect and direct impact of three cultural traits: risk taking, internal communication, and differential treatment of best and worst performers.
- Risk taking increases three key attitudes—discretionary effort, commitment to the organization, and feelings of job fit. In addition, risk taking has a positive direct impact on performance. Together, these indirect and direct improvements drive an increase in overall employee performance.
- Likewise, internal communication increases employees’ effort, commitment, and match with job and also has a positive direct impact on performance, leading to an overall increase in employee performance.
- In contrast, although differential treatment of best and worst performers increases the key attitudes of discretionary effort, commitment, match with job, and team strength, it has no direct impact on employee performance. The total impact on improvements in employee performance is 1.5 percent.
Understanding Drives Commitment, Effort, and Job Fit: A Closer Look at the Performance Management System
Understanding Standards: Impact on Performance
- Employee Understanding of Performance Standards
- Indirect:
- Discretionary Effort (19.0%)
- Commitment (34.0%)
- Match with Job (36.1%)
- Direct:
- Direct Impact (31.4%)
- Total:
- Increases Individual Performance by 36.1%
- Indirect:
Number of Formal Performance Reviews: Impact on Performance
- Discretionary Effort (0.5%)
- Commitment (4.8%)
- Match with Job (3.8%)
- Having Necessary Resources (4.7%)
- Direct Impact (0.1%)
- Total:
- Decreases Individual Performance by 1.0%
Presence of 360-Degree Review: Impact on Performance
- Discretionary Effort (0.3%)
- Commitment (-6.9%)
- Having Necessary Resources (-9.0%)
- Direct Impact:
- Direct Impact (9.0%)
- Total:
- Increases Individual Performance by 8.1%
Source: Corporate Executive Board
The Value of Culture: Cultural Traits Drive Attitudes of Performance
Risk Taking: Impact on Performance
- Risk Taking
- Indirect:
- Discretionary Effort (18.4%)
- Commitment (45.7%)
- Match with Job (33.4%)
- Direct:
- Direct Impact (29.7%)
- Total:
- Increases Individual Performance by 38.9%
- Indirect:
Internal Communication: Impact on Performance
- Internal Communication
- Indirect:
- Discretionary Effort (17.1%)
- Commitment (43.2%)
- Match with Job (34.7%)
- Direct:
- Direct Impact (26.7%)
- Total:
- Increases Individual Performance by 34.4%
- Indirect:
Differential Treatment of Best and Worst Performers: Impact on Performance
- Differential Treatment of Best and Worst Performers
- Indirect:
- Discretionary Effort (5.5%)
- Commitment (23.2%)
- Match with Job (13.1%)
- Team Strength (29.3%)
- No Direct Impact:
- Total:
- Increases Individual Performance by 1.5%
- Indirect:
The total impact of a strategy on employee performance is a weighted sum of the strategy’s direct and indirect effects. Each direct and indirect effect is weighted differently, which is why the direct and indirect effects do not sum to the total impact. Percentages next to employee attitudes denote the maximum percentage change produced by each strategy, expressed as a percentage of the total possible change.
Source: Corporate Leadership Council 2002 Performance Management Survey.
The Culture of High Performance: Risk Taking, Communication, and Organizational Flexibility Most Important
Maximum Impact of Cultural Traits on Employee Performance
Change in Performance
- Risk Taking – 38.9
- Internal Communication – 34.4
- Flexibility – 22.9
- Innovation – 16.7
- Future Orientation – 9.6
- Employee Involvement – 7.7
- Coworker Cohesion – 7.2
- Diffuse Decision-Making Authority – 4.7
- Differential Treatment of Best and Worst Performers – 1.5
Level of Performance Driver
- A-Level: ≥25.0
- B-Level: 10.0 to 24.9
- C-Level: 0.0 to 9.9
- D-Level: <0.0
With Sincere Thanks…
Partnering with the Membership, the Council Surveyed Over 19,000 Respondents from 34 Companies, Seven Industry Groups, and 29 Countries
Consumer Products and Retail
- LEGO
- LG Electronics Inc.
- Lowe’s
- Maytag
- RadioShack
Entertainment and Media
- Viacom
- Walt Disney World Resort
Chemical and Energy
- Dow
- Perez Companc S.A.
Health Care
- Aventis
- Bayer
- Bristol-Myers Squibb Company
Manufacturing
- Caterpillar
- Stora Enso
Financial Services
- Abbey National
- ABN AMRO
- First Data Corp.
- H&R Block
- IADB
- RBC Financial Group
- Sanlam
- Skandia
- Standard Chartered
- State Farm Insurance
Technology
- AMD
- AMS
- BT
- Canon
- EDS
- Ingram Micro
- SAS
- Sprint
- Vodafone