A business with excessive cash flow, a dazzling product that has customers lined-up and an organization brimming with the top talent. The perfect picture of abundance, right?
What if I told you it’s a trap that can quickly lead to disaster?
What if the catalyst for success was the opposite of abundance and something much more painful?
A close friend of mine is the owner of a successful business. He works long hours for most of the year, but forces himself to step away for the majority of a few months over the winter.
In a recent conversation, we were speaking about his business and the factors that contribute to his overall success. His primary driver of success might surprise you.
“Scarcity drives me. Not in a bad way, but it’s what motivates me.”
He shares an example about a previous business he owned. This business generated significant revenues, but he was blind to the constant bleeding of money due to out-of-control costs and a lack of attention to important details. When things started trending toward a financial nosedive, he couldn’t recover quickly enough. Declaring bankruptcy and left with nothing but a box of leftover product, he asked himself, “How can I turn this into food?”
It was that moment that changed his approach to business. He sharpened his focus and began making calls to past customers. He went above and beyond to get this product into the hands of those who he felt could use it.
Experiencing scarcity drives him to be better at what he does and to provide service that makes his company incredibly valuable to it’s customer base.
When things are too good, we can become desensitized to the small things that make a big difference:
- We have an abundance of customers so our standard of service can become less of a priority.
- Our product is in high demand so we stop innovating.
- Our people are performing so we stop giving them attention and support.
What happens when we have abundance is called diminishing marginal utility: the more you have, the less each item is worth to you.
We are all subject to it.
Have you ever taken something for granted? A great job, great employee, perfect relationship? What happens the moment one of them slips away from you?
Scarcity can be a gift that provides what is called a focus dividend: heightened productivity when facing a deadline. Scarcity can truly capture the mind and inspire focused action. It often isn’t until we desperately need something done that we then accelerate into action.
As Mullainathan and Shafir, authors of the book, Scarcity, write, “Follow the thread of scarcity far enough and it leads back to abundance: the recession that is caused by our behaviour during the boom; the last-minute cramming that can be blamed on the weeks prior. While scarcity plays a starring role in many important problems, abundance sets the stage for it.”
So let’s lay off scarcity – it could be just what your organization needs to level set, innovate and grow.