Leadership lesson: scarcity-proof your life

It’s a strange thing to say, but I’m fascinated by poverty, and why it persists in a world where so many have so much. But what really took me by surprise was when I picked up a book on poverty – and learned something that changed how I lead and live.

The Ivy League authors, a behavioral economist and behavioral psychologist, were writing together about decision-making. Many studies show people in poverty make bad decisions about money, and they wanted to understand why. As they researched and wrote, one started to get a creepy feeling. He realized that he made similarly bad decisions about the thing that was most scarce for him: time.

The big idea: underneath scarcity of any asset (money, time, calories, social connection, you name it) is the same scarcity mindset.

What’s a scarcity mindset and why should I care?

According to Mullainathan and Shafir in Scarcity: Why Having Too Little Means So Much, a scarcity mindset involuntarily changes the way we look at things. Have you ever noticed how a project – when the deadline looms – is like a high-powered magnet for your time and attention? That’s a scarcity mindset kicking in.

Initially, the focus is productive, but it provides only a narrow benefit. Upside: we do a better job eliminating distractions and attending to our pressing deadline. Downside: we are less effective in the rest of life.

Why? Because when a scarcity mindset kicks in, we can’t keep our thoughts off the project. And this costs us in ways we can’t even see.

Imagine this:

One of your biggest clients has informed you that it will be taking its business elsewhere. You convince the account manager to listen to one last pitch. She agrees but says it must take place tomorrow afternoon. You clear your calendar and put off all other tasks. You lock yourself in a conference room and pour the rest of the day into preparing. One appointment, though, cannot be avoided. Your daughter has her city championship softball game tonight (let’s be honest: for a moment you even consider skipping that, but your better side, barely, wins out).

On the way to the game, your daughter realizes she forgot her lucky charm. You yell at her before turning around to pick it up. By the time you’ve regained composure, it’s too late. Something fun has become tension filled. And at the game, you can’t enjoy yourself. Your mind keeps turning to that presentation. Not that you can work on it now… you just can’t focus on the game.

You’re distracted. And when your daughter catches a glimpse of you up in the stands, you know she knows it.

What’s the impact on my life of being in a scarcity mindset?

The intense focus is called tunneling. It’s an involuntary response to a scarcity mindset, and unconsciously drives our choices by controlling what comes to mind: what’s in the tunnel (the pitch) versus what’s outside the tunnel (the relationship with your child).

Tax #1: the bandwidth tax

If our bandwidth is our available cognitive capacity, a scarcity mindset levies a tax on it. We have less cognitive capacity available for the rest of life. Notice that our advertising executive operates from a scarcity mindset even when she’s not actually at the office. Her mind draws her back into the tunnel while she’s in the stands, and takes away from her capacity to be the parent she wants to be.

Think of bandwidth as a core resource. Bandwidth enables us to engage in complex thought processes about parenting, studying, navigating a difficult relationship, or getting to the gym. (Ouch – sorry I brought that one up.)

The bandwidth tax from a scarcity mindset costs the average human 13 I.Q. points. That makes someone who’s exceptionally gifted just an average thinker, and someone of average intelligence drop to cognitively impaired.

Tax #2: the tunneling tax

In addition to the bandwidth tax, when we don’t attend to what’s outside the tunnel – things that at some point must be attended to – we borrow time from the future.

And here’s the really bad news: It takes more time to do the things we relegate to the future than if we do them now. We have to lose more weight, gain more fitness, do more work on the project because we didn’t have time to get help or the right resources, reschedule meetings (putting off other commitments), make up with a disappointed child or spouse.

We calculated this on a real example at my house: 6 months without flossing due to lack of time turned into 4 cavities. At 20 seconds a pop, not flossing saved 3 hours. The cavities, on the other hand, cost 2.5 hours at the dentist’s, 2.5 hours of work to make up, two rescheduled conference calls later in the day (because novocaine makes you sound drunk), and $144 (after insurance). The authors call this the tunneling tax.

And it gets worse. The double-whammy of bandwidth and tunneling taxes puts us in a vicious cycle. To cope with chronic time scarcity, we multi-task. Say goodbye to more I.Q. points.

Scarcity-proof your life

The authors suggest that we can scarcity-proof our lives by building in slack. Slack may be the last thing that a busy person might think of “adding” to an already double-booked calendar, but the unexpected happens often.

We can also purposely prepare for those times that we need to tunnel. Recognize the impact of your scarcity mindset on others. Get the bills paid and the kitchen stocked with healthy snacks. Make decisions beforehand and set up reminders that penetrate the tunnel enough to get to the gym or spend time with a friend.

If you work to manage your bandwidth, rather than your time, what choices might you make?

Finally, take a good look at what is actually scarce. Is it really time? Or is it time to respond to the unexpected that is scarce?

Human being 

The mindset of scarcity is a human experience, whether we have scarce money or scarce time. Even though working with my own scarcity mindset isn’t a walk in the park, it’s much easier to create slack in a busy middle class life than it is to create slack when you are financially impoverished.

I have read Jeffrey Sachs and Muhmmad Yunus, and I have traveled in countries vying for poorest in the world. But tapping into my own scarcity mindset gives me a different empathy. It’s tempting to wear busyness like a badge of honor, and shame others for what we can see in them – but not ourselves.

Leslie Bevan, Force for Good at DFCP, is a non-profit and social justice leader, executive coach, and keeps a stack of other equally interesting books by her bedside.