Back to Business Growth: A Business Imperative…

Competitive pressure on companies has never been greater. Globalization, mergers and acquisition, eroding margins, outsourcing, the technological revolution, shrinking customer bases; these and other developments are creating unprecedented challenges for business manager, especially for those who manage strategic accounts.

More than ever, maintaining and building relationship with these key customers has become essential for sustaining the P&L profile that you need to survive and grow.

In the book “The New Successful Large Account Management” by Robert Miller and Stephen Heiman they write: There are two approaches to maintaining a healthy P&L. Cut costs or improve revenue (ideally, you do both). By now the first approach, which dominated corporate strategies for at least the last decade, is approaching the stage of limited returns, as organizations realize that there’s only so much excess any company can cut out.

As a result the second approach, revenue improvement, is fast becoming a universal imperative.  Recognizing that revenue is the lifeblood of their organization, managers increasingly following the mantra “back to growth”.

There are two approaches for business intent on growing revenue. Expand into new markets and new customers bases, or optimize the business you have in your existing accounts. These approaches are meant to be complementary, but with global competition severely curtailing market expansion, leading firms are focusing on the second option, seeking to develop untapped potential in their existing customer bases.

Alert to the traditional benchmark that 50 percent (or the 80-20 rule) of a company’s revenue comes from 5 percent of its customers, they are concentrating on that critical 5 percent; the accounts that companies define variously as their key, strategic, or simply “large” accounts. Even small businesses are following this pattern, by focusing on those critical accounts that are large to them.

There are two approaches to improving business with your strategic accounts. The old-fashioned method is to try to sell them more and bill them accordingly. A more reliable method, as measured by enhanced revenue over the long term, is to work on building relationships that bring the accounts value.  In fact the single “secret” to business success in the twenty-first century is to make contributions to your key accounts that ensure their success. That’s correct:

It’s not just about your business; you work with your key accounts to improve their business and ensure their success; rather then just trying to sell them something.

Whatever their size and whatever their markets, businesses everywhere need to protect their key account “assets”. They need to deliver real customer value or risk being de-positioned as commodity suppliers. They need to invest appropriately in the strategic relationships, which is the only safeguard against account erosion.

                “Change alone is unchanging”—Heraclitus

In their book Miller & Heiman write: If you are competing for major account revenue today, you’ve got to rely on something other than your latest generation products or services. To achieve competitive advantage today, especially in targeting large or strategic accounts, the key differentiating factor is the ability to build relationships that bring your customers measurable value over time. In a sense there’s nothing new about this imperative; bringing ‘customers value’ has always been key to success. But the world in which we now must compete has in fact changed; and changed in ways that are only marginally related to your technology.

While good account management, like good selling, has always depended on effective information management, today’s hyper-connected, information-saturated, wireless environment, that requirement has been pushed to an entirely new level. Not only is there now infinitely more information out there than ever before, but that information is both instant and ubiquitously accessible.

Now, thanks to Google, Yahoo, Hoover’s, and a host of other unlikely-named data-banks and search engines, the newest market entrants can acquire, within minutes, the kind of  rich customer data that used to take days, and that pre-Web sales and marketing teams could only dream about. Which means, with very little investment of either time or money, a potential competitor can acquire as much pubic information about your account as you have yourself.

However, here’s another hard truth: Your customers have access to this new information, too. They’re using it to research your capabilities, to compare them against those of your competitors, and to bring to the bargaining table a much higher degree of sophistication than businesses have ever had to contend with before. The accounts that you acquired fairly easily during the 1990s boom are both more resource-poor and data-rich than they were then; and fully capable of using that scenario to their competitive advantage.

In this highly competitive market, the central lesson is that your success is a function of your customers’ success. Not for this quarter alone, but for the long haul. Businesses are successful over time because they ‘add value’ to their customers’ business, while simultaneously realizing value themselves. Only this kind of mutual benefit justifies continued investment in a relationship.

To many senior-level people, who must answer to shareholders quarter-by-quarter, this is a difficult lesson to act on, especially when markets are volatile. Some of them frankly still see long-term account management as an investment that they’re making in their successors’ career. But it’s a valid lesson nonetheless. And the narrowing of the vendor base makes it an all the more urgent imperative.

Be Prepared: Your-Time Will Come…

Dr. Brian Sutton-Smith writes: “The opposite of play isn’t work. It’s depression.” “Furthermore, the opposite of success is not failure—it is living a life where you are comfortably numb.”

In the book “Sink, Float or Swim” by Scott Pelton & Jogi Rippel they write: “The truth is that in every crisis, there are opportunities: Opportunities for evaluation, for change, for reinvention, for innovation”.

In the article “Change Management is an Oxymoron” by Jim Clemmer he writes: “Those two words (change and management) make about as much sense together as “holy war”, “non-working mother”, “mandatory option”, and “political principles”. Many of the books, models, theories, and “processes” on change have come from staff support people, consultants, or academics who’ve never built a business or led an organization”. “Change management comes from the same dangerously seductive reasoning as strategic planning.

They’re both based on the shaky assumption that there’s an orderly thinking and implementation process which can objectively plot a course of action like Jean Luc Piccard on the starship Enterprise and then ‘make it so’. But if that ever was possible, it certainly isn’t in today’s world of high velocity change”.

In the book by Jim Collins, “Good to Great: Why Some Companies make the Leap” he writes: “If I was running a company today, I would have one priority above all others; to acquire as many of the best people as I could. I’d put off everything else…to fill the bus”.

Michael Jordan said, “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty-six times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”

Kjell Nordstrom, author of “Kararoke Capitalism” writes: “Business today has turned into a karaoke bar. Everything is a copy of a copy of a copy. He explained that it is similar to some untalented drunk patron in a bar singing someone else’s song; business is full of copy–cats. Further, he says “imagination and innovation will place societies, organizations, and sad individuals on center-stage”. “Creativity is the commodity of the future. But taking the same information that everybody else has and doing something unique, useful, and impactful; this is the ticket for success”.

Tiger Woods said “after a round of golf, he goes over went wrong but more importantly, he goes over what went right. This means he is rehearsing (practicing) success over and over and over again. In contrast, what are people practicing when they focus on their mistakes? They are mentally rehearsing their poor performance. So what will they get good at? You got it; poor performance. Does this mean you should ignore your mistakes? Absolutely not: But focus on the success and not the failure”.

“Challenge is based on the belief that change is a constant in one’s life. Successful people tend to see change as an exciting challenge to embrace and master rather than as a stressor to avoid. They welcome new opportunities to learn, grow, and change when faced with challenges, and do not perceive these opportunities as threats.  The feeling of control or ownership is at the root of almost every theory of effectiveness. People who are able to make critical decisions and to make change happen have developed this sense of control”.

Scott Pelton & Jogi Rippel, write: “An action plan is important but without execution and ‘movement’ the plan accomplishes nothing”. “The typical (linear) approach is to think that the harder you push the greater you improve the chance for success—false. As you keep trying harder & harder and work longer and longer at some point there is the law of diminishing return and your efforts become counter productive. To be more productive set a ‘rhythm’; plan, execute, follow-up, disengage; plan, execute, follow-up, disengage; …etc”.

In business, there is a preponderance of goal setting, which is perceived as crucial for measuring results and creating accountability. The type of goals most commonly used are ‘SMART’ goals: Specific, Measurable, Attainable, Realistic, and Time-based. Unfortunately, they lack “emotion”. One of the biggest factors in success is developing emotional & meaningful goals. If a goal has no meaning and doesn’t touch an emotional chord, then the chances of achieving it are very unlikely. It must be personally meaningful: Why is it important to an individual?

Find this meaning provides the emotion for the goal. In order for the goal to be achieved, people must visualize themselves achieving it. The goal must bridge the GAP between where they are and where they want to be in the future.  Developing the “To Be” goals is vital to making the change”.

John Kotter, Harvard Business School, writes: “Behavior change happens mostly by speaking to people’s feelings. In other words, making change is all about your emotional connection to the change”.  A very effective way to create an emotional connection is with a clear and compelling image of who you want to be in the future (“To Be”). This is different from what you want “To Do” or what you want “To Have”.

Geoff Colvin author of “Talent is Overrated” writes: “What separates world-class performers? The poorest performer doesn’t set goals. The mediocre performer set goals that are general and often focus simply on achieving a good outcome. The best performers set goals that are not outcomes but rather about the process for reaching the outcome”.

Change can be ignored, resisted, responded to, capitalized upon, and created. But it can be managed and made to march to some orderly step-by-step process. However, whether change is a threat or an opportunity depends on how prepared we are.

Whether we become change victims or victors depends on our readiness for change.  An inspiring quotation from Abraham Lincoln (in his decades long string of failures in business and politics before becoming one of America’s greatest presidents): He once said, I will prepare myself and my time must come.”

Leadership: The Price of Arrogance

           “I set no limits to what a man of ability can accomplish” –Alexander the Great

Few figures in history are as venerated as Alexander the Great, the young Macedonian king who believed that ability, focus, and determination in a leader would enable him to conquer the world. The Romans were the first to append the moniker “the Great” to his name, and history and popular perception have kept his legend intact for centuries.

Alexander’s leadership style reflected his conviction that a man of ability and determination could inspire and direct others to accomplish anything he set his mind to. For Alexander it was all about conquest –“acquisitions” in today’s corporate world. He was willing to pay whatever price was necessary to achieve his goal of nothing short of conquering the world.  In the early years of this career, Alexander was pragmatic enough to recognize that success does not come without cost: “The path is difficult and requires great personal sacrifice”. Alexander was able to connect with those he led because he exuded determination, projected confidence and ability, and generated excitement and passion for what he was doing.

An idealized or romantic view of Alexander’s conquests often overshadows some of the negative aspects of his leadership style, especially in the latter stages of his career. Though idolized in the West, he is not always viewed in the East as an enlightened leader, guiding the eastern barbarians toward the light of Greek learning and culture. He is sometimes demonized as the Hellenic version of Genghis Khan, sweeping across central Asia in 330 BC and bringing suffering, enslavement, and death to millions. Some of the countries that Alexander subjugated nearly twenty-four hundred years ago: Iran, Afghanistan, and Pakistan, make up today’s “terrorists” areas in which anti-Western sentiment is at its most virulent. There, Alexander, or Iskander as he is called, is often portrayed as an early example of Western cultural arrogance and exploitation.

In the book ”Power, Ambition, Glory” by Steve Forbes & John Prevas they write; “The real story of Alexander is a tragic case of what happens when too much power is concentrated in hands not strong enough to use it constructively or wisely. Each successive conquest and the power and wealth that came with it bred arrogance in Alexander instead of caution, moderation, and reflection. He not only destroyed himself but carried with him an entire civilization that believed his success was confirmation of its cultural superiority over the rest of humanity.

Alexander is a cautionary example for today’s leaders. Success not only in the corporate world but in politics, entertainment, and professional sports can frequently end in personal tragedy and failure. It can undermine the best achievements of the most brilliant leaders if they lack self-control and the discipline to remain focused on what is important and keep their success in perspective.  Relatively few entrepreneurs and CEOs today seem capable of managing lofty levels of success while maintaining a sane perspective. The dramatic downturn in the current economy is providing a humbling lesson for many at the top as they see their fortunes radically devalued and they become the focus of federal and state investigations for financial irregularities”.

In the book, Forbes & Prevas continue: “Leaders like Alexander often have an inclination to rely on their instincts and abilities instead of on objective information and analysis to conduct business. Seduced by their success and the constant praise of those who surround them, they come to believe that they alone know what is best. They stop seeking, listening, and learning. They become rigid, authoritative, and no longer receptive to feedback from their own organizations or the markets. Large corporations often come apart for the same reasons as Alexander’s empire did; leaders don’t create structures and cultures that keep them functioning profitably when the founder or creator leaves the scene or is carried out. Alexander’s empire disintegrated as soon as he died.

Ambition and the desire for immortality destroyed Alexander the Great. His story is the tragedy of what happens when a leader achieves power and wealth equal to his passion, something the Greek historian Plutarch warned about when he wrote: “No beast is more savage than man when he is possessed of power equal to his passion”. Alexander failed because he came to believe his own propaganda, and he lacked the self-control to keep his success within a sane perspective. He was weak within and not strong enough to carry the weight of his success. Alexander refused to accept the fact that success in large part can be due to a combination of ability, circumstances, and luck; factors that often converge in the career of a leader for a brief period when his stars are aligned”.

Young Alexander often impetuously destroyed the very things he had fought hard to achieve. He was blinded by his ego and failed to learn the lesson a simple Indian ascetic tried to teach him on the banks of the Indus River: Power is ephemeral , all glory is vanity, and in the end all that any man controls is the small piece of land on which he stands while he lives.


Alexander III of Macedon (20/21 July 356 – 10/11 June 323 BC), commonly known as Alexander the Great (Greek: Μέγας Ἀλέξανδρος, Mégas Aléxandros), was a Greek king of Macedon. He is the most celebrated member of the Argead Dynasty and the creator of one of the largest empires in ancient history. 

Born in Pella in 356 BC, Alexander was tutored by the famed philosopher Aristotle. In 336 BC he succeeded his father Philip II of Macedon to the throne after he was assassinated. Philip had brought most of the city-states of mainland Greece under Macedonian hegemony, using both military and diplomatic means. Upon Philip’s death, Alexander inherited a strong kingdom and an experienced army. He succeeded in being awarded the generalship of Greece and, with his authority firmly established, launched the military plans for expansion left by his father. In 334 BC he invaded Persian-ruled Asia Minor and began a series of campaigns lasting ten years. Alexander broke the power of Persia in a series of decisive battles, most notably the battles of Issus and Gaugamela. Subsequently he overthrew the Persian king Darius III and conquered the entirety of the Persian Empire. The Macedonian Empire now stretched from the Adriatic sea to the Indus river. Following his desire to reach the “ends of the world and the Great Outer Sea”, he invaded India in 326 BC, but was eventually forced to turn back by the near-mutiny of his troops. 

Alexander died in Babylon in 323 BC, before realizing a series of planned campaigns that would have begun with an invasion of Arabia. In the years following Alexander’s death a series of civil wars tore his empire apart which resulted in the formation of a number of states ruled by the Diadochi – Alexander’s surviving generals. Although he is mostly remembered for his vast conquests, Alexander’s lasting legacy was not his reign, but the cultural diffusion his conquests engendered. Alexander’s settlement of Greek colonists and culture in the east resulted in a new Hellenistic culture, aspects of which were still evident in the traditions of the Byzantine Empire until the mid-15th century. Alexander became legendary as a classical hero in the mold of Achilles, and features prominently in the history and myth of Greek and non-Greek cultures. He became the measure against which generals, even to this day, compare themselves; military academies throughout the world still teach his tactical exploits.

Washington DC Metro Station on a Cold January Morning in 2007…

The theme: How well are you experiencing the world around you?—How well do you listen?

It’s the Washington DC Metro Station on a cold January morning in 2007. There on the station floor sitting on an old orange crate was a man, unshaven and dressed in worn clothes playing a musical instrument.  He played six Bach pieces for about 45 minutes.  During that time approximately 2000 people went through the station, most of them on their way to work.

After 3 minutes a middle aged man noticed there was a musician playing.  He slowed his pace and stopped for a few seconds and then hurried to meet his schedule. 

4 minutes later: The violinist received his first dollar: a woman threw the money in the till and, without stopping, continued to walk.

6 minutes: A young man leaned against the wall to listen to him, then looked at his watch and started to walk again.

10 minutes: A 3 year-old boy stopped but his mother tugged him along hurriedly, as the kid stopped to look at the violinist.  Finally the mother pushed hard and the child continued to walk, turning his head all the time.

This action was repeated by several other children. Every parent, without exception, forced them to move on.

45 minutes: The musician played. Only 6 people stopped and stayed for a while. About 20 gave him money but continued to walk their normal pace.  He collected $32.

1 hour: He finished playing and silence took over. No one noticed. No one applauded, nor was there any recognition.

No one knew this but the violinist was Joshua Bell, one of the best musicians in the world. He played one of the most intricate pieces ever written, with a violin worth $3.5 million dollars. Two days before Joshua Bell sold out a theater in Boston where the seats averaged $100.

This is a real story. Joshua Bell playing incognito in the metro station was organized by the Washington Post as part of a social experiment about perception, taste and people’s priorities.

The Questions Raised

In a common place environment at an inappropriate hour, do we perceive beauty? Do we stop to appreciate it?  Do we recognize talent in an unexpected context?

One possible conclusion reached from this experiment could be: If we do not have a moment to stop and listen to one of the best musicians in the world playing some of the finest music ever written, with one of the most beautiful instruments. How many other things are we missing?

Management by Objectives: What is it?

Peter Drucker has seen a great many of his ideas gain general acceptance. But sometimes in practice they don’t come out quite the way he envisioned them.

In the book ‘Drucker’ written by John J. Tarrant, he writes about Peter Drucker and his many accomplishment and contribution to the study of management. In the book, Tarrant writes; “Management by Objectives” is a dominant concept in management and it has been for some years. The term was introduced by Drucker in his book ‘The Practice of Management’ in 1954, and he is recognized as a leading pioneer of the concept.

This idea is thought by a good many people to be the most important and influential concept Drucker has ever generated. Richard H. Byskirk says: “His (Drucker) emphasis upon the results of managerial actions rather then the supervision of activities was a major contribution for it shifted the entire focus of management thought to productivity output, and away from work efforts, the inputs.”

Management by objectives was a natural development in Drucker’s thinking. He had described the new order of Industrial Man, and identified the corporation as the representative entity of that society. He had outlined the concept of the corporation in philosophic terms. Corporations must be managed. The manager was the key individual in this vision of the future. Therefore, the next need was for a strong central principle by which management could be conducted to meet the requirement of the new world.

Drucker comments, “I didn’t invent the term ‘management by objectives’; actually Alfred Sloan used it in the 1950s. But I put it in a central position, whereas to him (Sloan) it was just a side effect”.

Drucker sketched the broad framework of the concept. Since the mid-1950s there have been numerous books and articles on management by objectives. Accepting the principle, managers and academicians have refined it, applied it to a wide variety of situations, and debated many of its implications.

What is it? At this point we are faced with a distinct split between the ideas as Drucker conceived it and as others have promulgated it, and the way it is often thought of in practice.  In his book ‘Management by Objectives’, Geroge S. Odiorthne gives this definition:

“In brief, the system of management by objectives can be described as a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual’s major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members.”

This principle has come into such wide acceptance that the reader who comes upon it for the first time might well say, “Of course. Is there any other way to run a company?” There were other ways, and there still are. In first talking about management by objectives, Drucker was responding to the inadequacy of an older idea of management that concentrated on processes rather than goals. The old-time manager was expected to learn the ins and outs of the business and to keep people busy. His operative question was, “What am I supposed to do?”

Management by objectives shifts the focus to goals, to the purpose of the activity rather than the activity itself. Instead of asking, “What do I do?” the manager is lead to ask, “What is the objective toward which we are working?”

Under the concept, the manager is held responsible for results rather than for activities. It is no longer a matter of how well he understands the machinery or how many meetings he holds or what volume of correspondence he is able to turn out but, rather, how his activities pay off in terms of the objectives of the organization.

In practice, however, we often see the concept of management by objectives translated totally into a formulation that night be called “bottom-line management” or management by results.  More and more an upper-echelon executive holds himself aloof from what is going on beneath him. He figures that his responsibility lays in hiring somebody to do a job, telling him the “bottom-line” results that are expected, and then rewarding the subordinate if he delivers or firing him if he does not deliver.

This bastardization of management by objectives has had some unfortunate consequences. One obvious one is that organizations are not run well. But there are other elements of fallout. The executive who knows that he must deliver, or else is apt to be an extremely insecure person. He deals in abstractions rather than concrete entities; he finds less pleasure in his work; and he is subjected to greater tension.

Another offshoot of management by objectives has been the notion of the transferable manager. According to this view, the superior manger is so involved with broad-gauge objectives – to the exclusion of details about how they are to be attained – that it does not make much difference what kind of company he works for. So we have seen numerous examples of top executives taking on big jobs in industries with which they are unfamiliar.

The idea that a manager who has mastered his craft can carry his briefcase into any situation and be a success is often attributed to Peter Drucker.

Drucker realized in the 1950s that management by objectives was susceptible to this kind of misguided application and warned against it. Always conscious that people are the vital resources of an enterprise, he cautioned that the bottom-line should not become an obsession, and that managers should not subject the organization to pressures approximating those in the Mindanao Trench in the quest for results.

His fears have been realized in no small degree.

Fire-Yourself: Re-Energize Your Organization and Management

When management changes were announced at General Motors last December, most people focused on the firing of chief executive Fritz Henderson and his replacement by Chairman Ed Whitacre. The more significant moves, however, were those that took place afterward when Whitacre promoted a number of younger managers to key positions. Taken together, these shifts sent a strong message to everyone in GM that it was time for fundamentally new perspectives.

In an article by Ron Ashkenas, Managing Partner of Robert H. Schaffer & Associates, he writes; “But why did it take a virtual purge for GM’s executives to realize that it was time for a change? Wasn’t bankruptcy, a federal bailout and international embarrassment enough of a wake-up call?

“Unfortunately, the GM situation reflects the reality that most managers have trouble breaking free of their tried and true strategies. Even when we intellectually understand that the world has changed and we need to do things differently, it’s difficult to let go.”

Former GE CEO Jack Welch used to gather his senior executives together in January and tell them to act as though they had just been newly appointed to their jobs. What would they do differently if they approached their work with a completely fresh perspective? It’s a powerful question, and one that most of us never ask ourselves.

Naturally, it’s easier to take a fresh perspective when you are really new and when the assumptions you’re questioning aren’t your own. We’re all more comfortable challenging someone else’s thinking than stepping back and critically assessing our own ideas. That’s why Whitacre needed to shake up GM’s management team—because the incumbents couldn’t get enough distance to challenge the way things had previously been done.

But why wait for your company to get in trouble? Now is a good time for every manager to take stock and think about what they would do if they were starting fresh. Here’s a thought exercise: First, take a deep breath and fire yourself.

Second, consider what you would do to reapply for your job. What would you say in an interview about the changes you would make and the improvements you would engineer? What unique stamp would you put on this new job? How do you feel about the company’s business strategy and the quality of its leadership team?

Answering these questions candidly and constructively cannot only help your business to thrive—it also can re-energize you for the next year.”

Pygmalion and Galatea Effects: Power of Expectations

Pygmalion effect, or Rosenthal effect, refers to the phenomenon in which the greater the expectation placed upon people, often children or students and employees, the better they perform. The effect is named after Pygmalion, a Cypriot sculptor in a narrative by Ovid in Greek mythology, who fell in love with a female statue he had carved out of ivory.

The Pygmalion effect is a form of self-fulfilling prophecy, and, in this respect, people with poor expectations internalize their negative label, and those with positive labels succeed accordingly. Within sociology, the effect is often cited with regards to education and social class.

Galatea is a name popularly applied to the statue carved of ivory by Pygmalion of Cyprus in Greek mythology. An allusion to Galatea in modern English has become a metaphor for a statue that has come to life. Galatea is also the name of Polyphemus’s object of desire in Theocritus’s Idylls VI and XI and is linked with Polyphemus again in the myth of Acis and Galatea in Ovid’s Metamorphoses.

Though the name “Galatea” has become so firmly associated with Pygmalion’s statue as to seem antique, its use in connection with Pygmalion, originated with a post-classical writer. No extant ancient text mentions the statue’s name. As late as 1763, a sculpture of the subject shown by Falconet at the Paris Salon (illustration) carried the title Pygmalion aux pieds de sa statue qui s’anime, “Pygmalion at the feet of his statue that comes to life”.. That sculpture, currently at the Walters Art Gallery in Baltimore, now bears the expected modern title Pygmalion and Galatea.

Pygmalion Effect: Power of the Supervisor’s Expectations

In the article “The Two Most Important Management Secrets: The Pygmalion and Galatea Effects” by Susan M. Heathfield she writes “Your expectations of people and their expectations of themselves are the key factors in how well people perform at work. Known as the Pygmalion effect and the Galatea effect, respectively, the power of expectations cannot be overestimated.

These are the fundamental principles you can apply to performance expectations and potential performance improvement at work. Every supervisor has expectations of the people who report to him. Supervisors communicate these expectations consciously or unconsciously. People pick up on, or consciously or unconsciously read, these expectations from their supervisor. People perform in ways that are consistent with the expectations they have picked up on from the supervisor.

The Pygmalion effect was described by J. Sterling Livingston in the September/October, 1988 Harvard Business Review. “The way managers treat their subordinates is subtly influenced by what they expect of them,” Livingston said in his article, Pygmalion in Management. The Pygmalion effect enables staff to excel in response to the manager’s message that they are capable of success and expected to succeed.

The Pygmalion effect can also undermine staff performance when the subtle communication from the manager tells them the opposite. These cues are often subtle. As an example, the supervisor fails to praise a staff person’s performance as frequently as he praises others. The supervisor talks less to a particular employee.

Livingstonwent on to say about the supervisor, “If he is unskilled, he leaves scars on the careers of the young men (and women), cuts deeply into their self-esteem and distorts their image of themselves as human beings. But if he is skillful and has high expectations of his subordinates, their self-confidence will grow, their capabilities will develop and their productivity will be high. More often than he realizes, the manager is Pygmalion.” Can you imagine how performance will improve if your supervisors communicate positive thoughts about people to people?

If the supervisor actually believes that every employee has the ability to make a positive contribution at work, the telegraphing of that message, either consciously or unconsciously, will positively affect employee performance. And, the effect of the supervisor gets even better than this. When the supervisor holds positive expectations about people, she helps individuals improve their self-concept and thus, self-esteem. People believe they can succeed and contribute and their performance rises to the level of their own expectations.”

The Galatea Effect: Power of Self-expectations

In this same article Susan M. Heathfield writes “Even more powerful than the Pygmalion effect, the Galatea effect is a compelling factor in employee performance. The manager, who can assist employees to believe in them and in their efficacy, has harnessed a powerful performance improvement tool. I’m sure you’ve heard of the words, “self-fulfilling prophecy.” When applied as the Galatea effect, these words mean that the individual’s opinion about his ability and his self-expectations about his performance largely determine his performance.

If an employee thinks she can succeed, she will likely succeed. Consequently, any actions the supervisor can take that increase the employee’s feelings of positive self-worth; will help the employee’s performance improve. I don’t mean to over-simplify this concept. Many other factors also contribute to the level of an employee’s performance including your company culture, the employee’s life experiences, education, family support and relationships with coworkers.

However, positive supervision is one of the key factors that keep good employees on the job.  Harness the power of the employee’s self-expectations to ensure powerful, productive, improving, successful work performance.”

What is the difference between Pygmalion and Galatea effect?

When people believe in themselves and succeed as a result, it’s called the Galatea effect. Even more powerful than the Pygmalion effect, the Galatea effect is a compelling factor in employee performance. The manager, who can assist employees to believe in them and in their efficacy, has harnessed a powerful performance improvement tool.

The Pygmalion effect, Rosenthal effect, or more commonly known as the “teacher-expectancy effect” refers to situations in which students perform better than other students simply because they are expected to do so. The Pygmalion effect requires a student to internalize the expectations of their superiors. It is a kind of self-fulfilling prophecy, and in this respect, students with poor expectations internalize their negative label, and those with positive labels succeed accordingly.

Within sociology, the effect is often cited with regards to education and social class. The effect is named after George Bernard Shaw’s play Pygmalion, in which a professor makes a bet that he can teach a poor flower girl to speak and act like an upper-class lady, and is successful…