Is a Scarcity Mindset Derailing You as a Leader?

Learn three obvious signs of a scarcity mindset and why leaders need to escape the trap and develop more of an abundance mindset.

Frank Congiu, SVP, Key Accounts, LHH
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“Why in the world do you need all of that shampoo and conditioner?”

I was unpacking from a week on the road after staying in four different hotels in four nights when my wife noticed me unloading my toiletry pack with four mini shampoo bottles and four mini conditioner bottles. She stared at me with a puzzled look. In my bathroom closet was a bin full of similar bottles that was growing out of control. And while I never really needed any of it, I knew why I had hoarded it.

As I have noted in earlier blogs, I grew up in a pretty poor family and to this day, I know what it is like to not have enough of the basic necessities in life. It is this experience that I think conditioned me to have a scarcity mindset – a fear that if I don’t get something I want or need, there might not be enough of it later.

Author and businessman Steven Covey first coined the terms “scarcity” and “abundance” mindset in his best-selling 1989 book The 7 Habits of Highly Effective People. Covey said that people with a scarcity mindset “think there is only so much in the world to go around. It’s as if they see life as a pie. When another person gets a big piece, they get less. Such people are always trying to get even, to pull others down to their level so they can get an equal or even bigger piece of the pie.”

 Okay, so perhaps my toiletry addiction is a mild example of what Covey is talking about. But I still understand that feeling that comes when scarcity mindset takes hold and can recognize it in others.

Do you remember the toilet paper hoarding that greeted the earliest days of the global pandemic? That is a perfect example of people taking aggressive – if not irrational – action to get something for themselves with the knowledge that in doing so, others would go without.

I’ve also worked for leaders who were dominated by a scarcity mindset. These are the leaders who hoard the credit for business successes and aren’t willing to accept any blame or accountability when things go wrong. These leaders analyse every task and challenge in terms of what they can get out of it for themselves, without any consideration for what that mindset will do to others.

What are some other obvious signs of a leader with a scarcity mindset?

  • The leaders who projects anxiety. Remember the 1984 Pulitzer Prize-winning play Glengarry Glen Ross by David Mamet? It’s about a group of increasingly desperate Chicago real estate agents who are willing to sacrifice their morals and ethics – and each other – in exchange for keeping their jobs. The characters’ desperation is driven by a manager who makes it clear that those who make sales will be rewarded and those that don’t will lose their jobs. This is a perfect example of what Covey was talking about – a leader who makes it clear that you must produce or your head is going to be on the chopping block.

  • The leaders who absolve themselves of failure and hoard success. One of the most maddening experiences any of us will have at work is toiling for a leader who never takes any blame for failure. If a contract doesn’t get renewed, or a lead on a new client evaporates, the scarcity mindset leader will quickly point a finger at someone else. When there is success, however, this leader will try to take sole credit. This is the antithesis of a productive team culture.

  • The leaders who hoard talent and resources. Leaders with a scarcity mindset tend to hoard top talent that makes them look good to the higher ups. It’s not unusual for these leaders to discourage their best people from seeking assignments in other parts of the same company or block them from promotions or transfers. These leaders know that if they lose their top producers, the performance of the team may suffer and that will look bad for them.

How can leaders escape the scarcity mindset and develop more of an abundance mindset?

There’s no secret recipe for defusing a scarcity mindset. As a business leader, you need to focus on creating a psychologically safe environment for your teams, where people can embrace a fail-fast approach to problem solving and learn from their mistakes. One where everyone carries the burden of failure and shares in success.

A whole bunch of people have tried to define the characteristics of an abundance mindset in business leadership. Here is a list of what I think distinguishes the abundance leaders from the scarcity leaders:

  • A relaxed and calm demeanour, even in the face of a crisis
  • Overwhelmingly positive with minimal emphasis on the negative
  • Clarity of communication
  • The ability to truly listen to the people you lead
  • Flexible and able to roll with the punches
  • Non-judgemental
  • A leader who welcomes change
  • Always willing to learn and admit when you don’t know something

Above all, you need to develop and support your people to be the best they can be, and then help them pursue other career opportunities. In essence, you need to give people the kind of support you would want to have from a leader.

I’m happy to say that I’ve stopped hoarding toiletries from hotels. I still feel tempted, but for the most part I have managed to keep my scarcity tendencies in check. And if I can do it, I feel as if there is hope for all of us.

LHH International Centre for Executive Options (ICEO) 

The ICEO is a global boutique practice exclusively dedicated to executive careers. We’re deeply experienced with organisational decisions and the complex challenges associated with senior leadership transitions and executive careers.
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