Abundance and scarcity mindset

· 4 min read
Abundance and scarcity mindset

"The 7 Habits of Highly Effective People” is a self-help business book written by Stephen Covey in 1989. I’m pretty sure that you’ve heard about it and seen in the bookshops, as it’s quite popular — more than twenty-five million copies have been sold worldwide according to Wikipedia. There are many interesting and useful ideas in the book, but I want to focus on the concept of two types of mindset focusing either on abundance or scarcity of resources (time, money, etc.). Our attitude towards abundance or scarcity affects our lives significantly and shapes our decisions every day. It's the mindset that separates happy people from the unhappy, and it’s possible to choose the bright side by adjusting it.

Abundance vs. scarcity

It’s easy to describe the difference by example. Imagine that you are hiking down the stream in the mountains with your friend and stop by for rest. You take some water from the stream using the cup you were carrying, the water is freezing and tastes very good. Your friend asks if she can make a sip too. Would you worry that there’s not enough water for both of you? Probably not — you can always get more water from the stream, so you share it with a friend without a second thought. Water is abundant.

Now imagine another trip with your friend, this time to a nearby desert. You carry a bottle of water to keep you hydrated, and you know that you’ll reach next oasis only in a few hours. You stop for a rest and drink precious water when your friend asks if she can take a sip because she lost her water. Immediately water becomes a valuable resource that is scarce. Scarcity makes you worry. What if there’s not enough water for both of you?

Scarcity mentality

Most people live with what Stephen Covey calls "Scarcity Mentality,” living life as if there’s only one limited piece of pie out there, and if someone gets more of that pie that means that everyone else gets less. People with Scarcity Mentality have a tough time sharing recognition, credit, power or profit with others. They also don’t feel happy for the success of others because for them it means getting less of their share. When you live in a world of scarce resources, you have to compete for them continually.

If scarcity mindset prevails in the workplace, it makes a fertile ground for paranoia and politics. Leaders that have scarcity mindset damage the culture at work and cause fear and politics thrive. In an environment like that teamwork, collaboration and innovation become nearly impossible because everyone is afraid to make mistakes. In game theory,, it’s called a zero-sum game where each participant’s gain is only possible at the cost of other participant’s loss.

Abundance mentality

In contrast, an abundance mindset is when a person believes that there are enough resources to share with others. It reflects a non-zero-sum game in game theory when it’s possible for all parties to win. It flows from inner confidence and security. When you feel that you don’t have to compete with others for resources, it’s easy to appreciate what they are doing or give away something valuable from which others will benefit. It feels right from the moral perspective and also is very practical — being altruistic is good for your health, according to recent studies.

It’s also crucial for leaders — to be an effective leader you need to create an environment where you can positively influence your team, empowering and encouraging employees so that they can thrive. Praise the team and give them credit whenever possible so that customers and higher management recognize them. Encourage creative thinking in the team and let everyone know that you believe in them.  When someone makes a mistake, it’s better to use that moment to teach instead of criticizing.

How to develop an abundance mentality

  • Start giving. Help someone if there’s an opportunity for them to thrive. It means asking, listening and being curious about the needs of others. Get creative and find out how helping someone can be beneficial for you too. You can help them without getting anything in return if it does n’t. At least you will make one person on earth feel better.
  • Get yourself together. It’s important to see how much things and time you already have. Organize your time, keep your home clean and it will make your mind clear.
  • Keep a journal. There are a lot of great people you meet every day, which help you without you even remember it. Keeping a journal and writing down everyone who helped you will help you feel grateful and motivate you to help others.
  • Stop comparing yourself. Don’t compare yourself to other people, because that’s a form of competition and it makes you think that you should be something else than yourself. Compare yourself to your old self. Notice how you’ve changed over time and how many things you’ve learned. See how small steps you make every day make your life better. Remember how you dealt with problems in the past and remind yourself that there’s nothing you can’t handle.
  • Be proactive. Scarcity mindset makes you react to things happening to others. Define what you want to achieve and start moving towards your goals. Take the responsibility and make things happen.

We are programmed with the scarcity mindset because that’s what helped humans survive in the past. We don’t like other people being successful unless we consciously decide to do so. But scarcity mindset doesn’t match the reality. There are much more types of games in game theory than just zero-sum games. It’s just or brain that knows how to play only one type.

In reality, when someone gets rich everyone benefits because the financial system gets money pumped in. When someone rich goes bankrupt, everyone gets poorer not only because people lose their jobs, but because money is eliminated from the financial system to prevent inflation. Of course, it’s simplified, but I just wanted to show an example of win-win from an economical standpoint.