Scarcity vs. Abundant Mindsets in Leaders

Scarcity and Abundance

We often hear the terms scarcity and abundance mindsets of employees and employers in addition to leaders. These terms are used to refer to the mindset of the individuals who think in constrained or scarcity mindsets as opposed to those who think in terms of abundance.

Indeed, even in our daily lives, we make choices between adopting a mindset that thinks in terms of scarce resources and constrained choices as opposed to those who visualize abundance as far as their attitudes are concerned.

These terms have also become more relevant in contemporary times when there are resource shortages which mean that having a scarcity mindset is not always bad. Having said that, considering that technology and innovation have the potential to usher in abundance, it is worth noting that having an abundant mindset is preferable in many situations where leaders have to have the vision to think in terms of growth, prosperity, and affluence for all.

Differences between Scarcity and Abundance Mindsets

Next, let us examine the differences between leaders who have a scarcity mindset as opposed to those who have an abundant mindset.

Scarcity Mindset leaders and Abundance mindsets differ in the following ways

  • Whereas the former are resource constrained meaning they think in terms of shortages, savings, keeping resources to themselves and a mentality which promotes individual selfishness over collective good, leaders with an abundant mindset think in terms of collective solutions, collaboration, encouraging creativity, and fostering a culture of high performance.

  • Perhaps the most important difference is that scarcity mindset leaders think in terms of zero-sum game situations where an individual or an organization can succeed only if they behave in I win/ You Lose thinking. While this is not necessarily bad considering that the very nature of competition is such that somebody has to lose if one has to win, when it comes to the internal processes of the organization, leaders have to think in terms of abundance wherein they believe that I Win/You Win and We All Win meaning that they have to encourage their employees not to compete with each other but collaborate and coordinate with each other.

  • Further, it is often the case that leaders with scarcity mindsets are prone to be fearful, play politics, and are limited in their vision. On the other hand, leaders with abundance mindsets are visionary, are role models for their employees, and ensure that their employees thrive and prosper leading to organizational success.

  • At the same time, in emerging markets such as India and China, it is often difficult for leaders to constantly think in terms of abundance because of the limitations of the system. Indeed, even in the West, there are many organizational experts who believe that while it sounds idealistic to say that leaders must have an abundance mindset, the realities of the marketplace are such that scarcity often delivers the best results.

  • Having said that, let us compare two legends of technology, Bill Gates of Microsoft, and the Late Steve Jobs of Apple. While both were indeed visionary and successful and at the same time had both scarcity and abundance mindsets, it is the degree or the extent to which one trait dominated in the sense that while Steve Jobs was willing to go with open source software, Bill Gates resisted the concept and continues to do so even now. It is another matter that Gates has also contributed to society through his foundation which has seen him donning the role of a social messiah.

Situational Leadership vs. Management

The point we are trying to make here is that both scarcity and abundance mindsets are present in all leaders and considering that management is situational and leadership is visionary, the outcomes for organizations depends to the extent in which the scarcity managerial model combines with the visionary abundance leadership model in determining the route taken by the organization as well as the culture in such organizations.

Leaders and Social Obligations and the Value they create for Society

Moreover, it needs to be remembered that organizations and business leaders have a social and moral responsibility towards society.

Therefore, when evaluating leaders with either or both of the mindsets, one must take into account how much value they have created for society. In this context, it is worth noting that while the megabanks in the West make more profits and money than many other organizations, leaders of other companies are more respected because their abundance mindsets ensure that they give back to society in the same manner in which society has contributed to their success.

Conclusion: Listen to your Inner Voice for Guidance

Therefore, in the ultimate analysis, it is the case that what works in one situation might not work in other situations and hence, whichever mindset you are going to adopt would depend on what your inner voice says about competition, collaboration, and coordination as well as moral and social obligations to your peers, families, friends, and colleagues and more importantly, to the wider society to which you belong.


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Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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