Skip to content


Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Behavioral Science: Do higher hopes lead to better compliance?

The way expectations influence outcomes was first researched in depth in the 1960s by two psychologists, Robert Rosenthal and Lenore Jacobson, who studied teachers and students. Then in 1969, Harvard business professor J. Sterling Livingston wrote a classic article that for the first time applied the “Pygmalion effect,” as Rosenthal and Jacobson called it, to business settings, for both individuals and groups.

The idea that expectations affect outcomes wasn’t new. Henry Ford had long before said, “Whether you think you can, or you think you can’t – you’re right.”

But building on the work of Rosenthal and Jacobson, Livingston was the first to document the Pygmalion effect in multiple case studies for big companies. He moved it from aphorism to management science.

Where did the name “Pygmalion effect” come from?

In Ovid’s Metamorphoses, Pygmalion is a sculptor who falls in love with an ivory statue he created. He begs the gods for a wife as beautiful and virtuous as the statue; the goddess Venus answers his prayers and brings the statue to life. Pygmalion’s desires helped produce the outcome.

George Bernard Shaw took it a step further. He wrote a play called “Pygmalion” in which Professor Henry Higgins vows to transform a Cockney flower girl, Eliza Doolittle, into a counterfeit duchess in three months.

The play is all about expectations, as explained through Eliza Doolittle’s best-known lines:

You see, really and truly, apart from the things anyone can pick up (the dressing and the proper way of speaking, and so on), the difference between a lady and a flower girl is not how she behaves but how she’s treated. I shall always be a flower girl to Professor Higgins because he always treats me as a flower girl and always will; but I know I can be a lady to you because you always treat me as a lady and always will.

Back to Professor Livingston.

His groundbreaking research led to four major findings (in his words):

What managers expect of subordinates and the way they treat them largely determine their performance and career progress.

A unique characteristic of superior managers is the ability to create high performance expectations that subordinates fulfill.

Less effective managers fail to develop similar expectations, and as a consequence, the productivity of their subordinates suffers.

Subordinates, more often than not, appear to do what they believe they are expected to do.

The positive aspects of Livingston’s research are apparent. The Pygmalion effect creates a self-fulfilling prophecy; high expectations (or pre-existing beliefs) change the behavior of both the person with the expectations and the person (or group) who’s the target of the expectations, putting them on a path to mutual success.

One caveat: Livingston found that subordinates are motivated to perform better only if they consider the boss’s high expectations “realistic and achievable.” Unachievable goals eventually cause subordinates to give up and settle for less than they can achieve.

Livingston’s most surprising findings are the negative aspects of the Pygmalion effect.

Managers of those expected to be low performers always communicate their low expectations. In turn, the workers perform worse and the managers lower their expectations even further, leading to increasingly worse performance. The managers’ initial low expectations set in motion a sort of death spiral into objective failure — lower productivity, fewer sales, more attrition, and the like.

For example, a lending group had already produced some losses at a bank Livingston studied. Supervisors with increasingly low expectations reduced the group’s lending authority. The bankers then “behaved in a manner that led to larger credit losses. They appeared to do what they believed they were expected to do, and their supervisors’ expectations became self-fulfilling prophecies.”

Livingston said it is “virtually impossible” for managers to mask low expectations. That’s because the message “usually is communicated unintentionally, without conscious action on their part. . . The silent treatment communicates negative feelings even more effectively, at times, than a tongue-lashing does.”

The implications for compliance are profound.

If compliance officers expect workers to behave badly, some or most of the workers will behave as expected.

More specifically, if compliance officers or other leaders believe certain groups — sales, business development, logistics — are most apt to cause problems, they’ll communicate those low expectations. That will trigger the Pygmalion effect and might ultimately lead to non-compliant behavior.

What about compliance leaders who expect whistleblowing to cause problems instead of helping to improve compliance? That expectation will likely push good-faith whistleblowers aside and encourage troublemakers to speak out.

Compliance trainees — younger workers and those new to the company — are often highly impressionable. Low expectations of them will plant doubts deep in their minds, perhaps at the outset of their careers, and drag them down from then on.

How do you know if compliance training assumes bad behavior? Trainers will have a negative tone and judgmental vocabulary, and they’ll use accusatory (and even cynical) examples. As Livingston said, it’s impossible to hide low expectations.

Within compliance departments, if leaders think lower-ranking compliance officers won’t have much impact, that’s likely to be the outcome. The lower-ranked officers will work to meet low expectations.

But here’s good news about the Pygmalion effect: When compliance leaders have realistic and achievable high expectations, those expectations can transform the ethics and compliance of an entire organization. It’s mutual success multiplied by a thousand.

Problems might still happen. There are no guarantees.

But in an organization where leaders expect ethical and compliant behavior and workers try to meet those expectations, problems are likely to be smaller and do less harm. So that even problems, should they happen, will help prove the value and effectiveness of the compliance program.

Share this post


Comments are closed for this article!