We are living in a time of unexpected scarcity. The basic resources, routines, and stability that we once took for granted now seem in short supply. Under these conditions, it is easy to fixate on what we don’t have or what we might lose moving forward. When this happens, we put ourselves at risk for what behavioral economist Sendhil Mullainathan calls “scarcity traps.”
When we get stuck in scarcity traps, our brains become hijacked. We tend to focus excessively on the short-term and on surface-level problems. Through our tunnel vision, we fail to think through situations rationally and strategically. This leads to poor decisions, with a prime example being the panic-buying seen in the wake of COVID-19.
But scarcity traps don’t just affect individuals. They impact teams, too. As a leader, you need a plan for preventing and working through scarcity traps with your team. We’ve put together three tips to get you started.
While scarcity is sometimes planned, it often catches leaders and team members off guard. Without effective ways to cope, people quickly fall into scarcity traps and start acting in unexpected ways. For instance, team members who used to be calm and collected suddenly become moody and anxious. Or thoughtful employees begin making rash and senseless decisions. The worst thing a leader can do is sit by idly while their team transforms before their eyes. Scarcity requires a rapid and proactive response. To start:
In teams, scarcity begets scarcity, as team members deplete their mental and emotional energy coping with the situation. This exhaustion often morphs into negativity, which can quickly spread throughout the team, creating feelings of mistrust, conflict, and confusion. Leaders have to step in and manage these reactions before they spiral out of control. So, take time to:
Under scarcity, the default reaction is to focus on the crisis and move as quickly as possible to address it. But, this can result in shortsighted decisions that jeopardize long-term success. As a leader, you need to model thoughtful, rational decision-making practices for your team. To do this make sure you:
A final note. Sometimes, scarcity traps can seem too big to escape. If you’d like help and support leading your team through scarcity, get in touch with one of our coaches.