In his book “Hidden Potential,” Adam Grant, A New York Times Best Seller, explained the hidden power behind expectations and how they shape performance. Although the principle has always been known, Grant does a good job of shading more light on it in a unique way. According to Grant, the influence on others takes three forms based on three important principles.

1. The Pygmalion Effect, which he called the Self-fulfiling prophecy
2. The Golem Effect and;
3. The Underdog Effect.

The self-fulfilling prophecy is based on the principle that high expectations result in high performances, especially from people we look up to, like teachers, partners, or mentors. The self-fulfilling prophecy is based on the Pygmalion effect (also known as The Rosenthal Effect) after an experiment performed by Rosenthal and Jacobson in 1968.

The Rosenthal Experiment

At the beginning of the academic year, Rosenthal and Jacobson told the teachers that this test was to predict which students would “bloom” intellectually during the academic year. They deceived the teachers that their genius students had been tested by some new methodology of determining the success of school age children, and these kids were the best of the best.

In fact, the students were randomly chosen from 18 classrooms, and their true test scores would not support them as “intellectual bloomers.” The result of the experiment showed a distinguishing difference between the sample students and the control students.

The “bloomers” gained an average of two IQ points in verbal ability, seven points in reasoning, and four points in overall IQ. The experiment showed that teacher expectations worked as a self-fulfilling prophecy. If teachers were led to expect enhanced performance from some children, then the children did indeed show that enhancement. (Source)

The Rosenthal Experiment backed up Schrank’s experiment (still carried out in 1968) and proved the positive effect of expectations. Both experiments proved the existence of the Pygmalion effect or Self-fulfilling prophecy. But where there is a positive side, there is also a negative side. This is where the Golem Effect comes in.

The Golem Effect is the opposite of the self-fulfilling prophecy or the Pygmalion Effect. According to the Golem Effect, low expectations from esteemed individuals result in low or poor performance. Again, this could be a spouse, mentor, or boss.

The Brophy Experiment of 1985‍

Brophy found that negative expectations, expectation-mediated discrimination, and false s can be harmful to student motivation. Following his experiment in 1985, Brophy listed eight concrete forms of negative expectations that made disadvantageous learning conditions. They are as follows:

Giving up easily on low-expectation students; criticizing them more often for failure; praising them less often following success; praising inappropriately; neglecting to give them any feedback following their responses; seating them in the back of the room; generally paying less attention to them or interacting with them less frequently; expressing less warmth towards them or less interest in them as individuals. (Source)

While the Golem and Pygmalion effects were both observed many years ago, the Underdog Effect is a bit more recent. The Term Underdog itself was used to refer to “a dog that was beaten in a dog fight.” Applied in business, the term underdog refers to a business with an obvious disadvantage compared to the competition. But despite their disadvantage, Underdogs are known for challenging the status quo in any industry and spearheading innovation.

What differentiates the Underdog Effect from the other two is that the Golem and Pygmalion effect are both direct results of expectations from highly valued individuals. People we hold in high esteem and possibly look up to. Whereas the Underdog effect is often a result of being underestimated by those who we consider equal or of “lower credibility.”

Where does this all lead to?

What the principles of Self-fulfilling prophecy, the Golem effect, and the Underdog effect tell us is the performance of employees is influenced by several factors, one of which is the expectation of the leader. If you have high expectations for your employees, you tend to push them to be their best, praise them when they do well, and encourage them when they fail. All of these force them to level up and strive to meet expectations.

On the other hand, if you have low expectations for your employees, you tend to undervalue them and focus more on the mistakes they make. These will have a negative impact on their performance. The same principles apply to founders as well. When people you consider credibility or hold in high regard encourage and praise your ability to excel in business, you have a better chance of succeeding.

But if the people you hold in high regard discourage you, your chances of success is slim. This is not because you don’t have what it takes to succeed, but psychologically, the opinions or expectations of these individuals can motivate you to rise to the challenges you will likely face and overcome them. Or drain you of energy and make you less likely to overcome challenges and succeed.

Knowing this,

it is important to surround yourself with like minds. People who can understand the reasons behind your actions but are not afraid to give constructive criticism when necessary. This can be your spouse, a mentor, or an adviser.