The panic-buying of fuel this week is a result of a scarcity mentality, but how can this human hard-wiring affect leadership? See how scarcity can influence the way you lead and your ability to grow your business...
Supply issues with fuel in the UK recently has created scenes of havoc and blocked highways, but leaders can learn a lot about how to perform better from the 'panic-buying' widely covered in the media. Think about the psychology which is at play behind the queues... Everyone else is getting so much of it, it’s all over the news, there won’t be any left unless you go out right now and get some. In fact, you might as well get twice the amount you usually do, you don’t want to be stuck. Right, where did you put your car keys...?
The scarcity mentality
The scarcity mentality is a term first coined in 1989 by Stephen Covey, globally renowned author of 'The 7 habits of Highly Effective People', and it relates to a psychological phenomenon where we perceive life and all its resources as finite. We see life as a pie, where for each piece that is taken or used, there is less available for everyone else.
With rapidly forming queues creating obstruction on highways and the average pump spend rising sharply from pre-fuel-shortage levels, some humans have responded to the thought of ‘losing out’ by building up their own personal supply and over-filling their tanks, leading to spend caps and standby army assistance.
Our environment's impact on our behaviour
On Monday, experts urged the media to stop using the phrase ‘panic buying’ when describing what was happening. Why? Because the thinking environment we create around a resource or capacity, impacts the way that humans respond to it.
We are a social species and if we think other humans are panicking, we assume it’s for valid reasons and that we should be too. And then we act on it. Because we are all hard-wired to factor in what others are doing, if our environment suggests that we need to hoard something or protect our share, we follow suit with our behaviour. (Think of the shortages of loo roll during lockdown).
Your power over your team's environment
As a leader, you set the tone for the thinking and feeling environment in which your people work. Let me elucidate. If your people think that a colleague’s recognition reflects badly on them by comparison, they will associate actions that generate recognition with a win or lose situation. They can either achieve them and win, or fail and lose. Many humans disengage when they think they are in a win or lose situation because the fear of failure is high, and they psychologically check out. An extreme example of leadership that fails to address and integrate this basic human trait is the leader who robs Peter to pay Paul; giving praise to one team member with one hand and using the accomplishments of that team member to highlight the deficiencies of another. This may sound archaic to some forward thinking leaders, but you'd be surprised how much it still happens, in many cases subconsciously.
Because the mindset is one of scarcity, leading this way suggests there is a finite amount of praise to go around. We can’t all be winners, we are indirectly told, because there is only so much winning that can be done. Whether it's behaving like you need to go head-to-head with your peers on the leadership team to access finite resources for your own department, or stubbornly refusing to let go of a work-stream because you feel like you can do it better than any of your subordinates, these all create a sense of scarcity and have an impact on the thinking and feeling environment of those you lead.
The cost of leading with a scarcity mindset
This is an incredibly damaging problem. As humans (as opposed to robots), in order to bring the best we have to our roles, we need to feel psychologically safe. It’s bordering on physically impossible for most of us to perform at our best if we feel like there is a high risk of failure, (something which is only a valid concept by comparison to others).
Are you holding onto that project (even though someone of your level might be better focusing elsewhere) because you're subconsciously thinking you are indispensable and no-one else can ensure it's success? It's no surprise that whichever human is leading that initiative won't invest as much effort as they would if they felt they truly owned it. Showing up to your leadership meeting ready for a fight? You'll trigger other humans around the table to do the same, and your own team will take their lead from you in cross-departmental projects - wasting time, creating toxic sub-cultures and dampening your agility to respond to the market.
The rewards of an abundance mindset
By contrast, operating in an environment that is led with a mindset of abundance cultivates a feeling of security, safety and freedom in humans and encourages bravery and honesty in how we show up.
For anyone who has experienced the leadership challenges of the past 18 months, you'll know these qualities in ourselves and our teams are essential to survival. In fact, businesses that have led with a high degree of trust, recognition and an abundance mindset have proven to do better during these hard times than their competition. (See my podcast interview with David Butler, CEO Crew Clothing, the retail business that grew enough during the pandemic to open more stores and were recently named by Drapers as amongst the fastest growing UK fashion retailers).
Your role in preventing 'panic-buying' behaviour
If you aren't or have never been influenced by the scarcity mindset, you will be in a very small minority. Most of us raised in the corporate world and beyond have grown up in environments that lean heavily on the concept of scarcity; scarcity of opportunities for progression, scarcity of funding for initiatives and scarcity of talented people to join our teams - to name a few.
It is rare that leaders are never affected by this way of thinking (if you're not sure how a scarcity mindset might be affecting how you show up, check out my blog ‘5 signs you are leading with a scarcity mindset’). By raising your level of awareness of this tendency, and actively managing it in yourself as a leader, you'll help create a positive, safe and growth-oriented environment for your teams.
So to support your growth, and make your life easier, more enjoyable and more productive, try observing some of the underlying beliefs at play in your own leadership practice over the next week. You’ll also reduce the amount of downtime you suffer when your team are in the metaphorical queue for fuel, and they won’t be stockpiling resources that could actually be helping you grow today. Something worth thinking about when you are operating to ambitious growth targets.
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