More Answers... (04/24/26 Newsletter): Working Out of a Scarcity Mindset

Hi Everyone, 

Here are More Answers... to help you head into the work week. Remember, you can see previous newsletters at askchrista.com/MoreAnswers.

Today’s topic: Working Out of a Scarcity Mindset

Today's world often focuses on scarcity cloaked in the word "efficient." If you feel like both words mean you lose (lose opportunity, time, energy, agreements, etc), you are wrong to feel that way. 

Many companies attempt to increase their margins using two limiting and short-sighted tactics-- and I'm being specific about this in that they are tactics, not strategies: expand the pipeline and close more deals (from a revenue and sales perspective) or contract business operations and lower costs (from an operational and administration perspective). Or both. All the time.

Many companies do both, but here's what many companies DON'T do when they should: be less afraid of spending money on the right things as a means to expand and grow margins, and be more afraid of choking a company's ability to do so because of "efficiencies."

Doing both isn’t a strategy. It’s a tactic that should be used with utmost precision and in a single moment of time so a company can reset, and likely recover, from whatever spurred the shift requiring such scarcity. After all, scarcity, when used as a corrective function for unexpected problems large enough to require scarcity, will work. But only as a tactic. It should never be a strategy or a way of life.

That said, there’s no question that when all employees have a mindset of reducing waste, their work becomes better and easier, spending becomes more focused, and growth becomes nearly automatic. This is truth, supported by evidence.

But efficiency is not about scarcity. It’s not about having less overall. It’s about having less waste, fewer stops, BETTER resources, fewer steps, IMPROVED tools, and an EASIER way to go about the day to day for your employees so that they’re only focused on what will deliver the best. Because if you’re strategy is the right one, that will be what you need to compete and be successful.

Reducing Waste Is Good; Starving for Resources Is Dumb

We can look to our gardens and lawns to see how reducing waste is good because it enables growth and the ability for things in the environment to thrive: take out the weeds, and the plants and grass have more room for their roots to strengthen and spread. 

But, and keeping with the analogy of the outdoors, you need to also create an environment where the goods (plants, grass) can thrive, and the bads (weeds) cannot survive. And in order to do THAT, you need to cultivate and fortify the environment with enriched soil-- or at least not tired, dry, can't-hold-water-anymore soil-- provide enough sunlight and enough shade, and water based on what is required.

But you need more than just the obvious day to day tactics: you also have to be aware of disease (which we can say is the same as bad office politics and bad managers/leaders) and insect or varmint issues (which we can say is the same as external forces like competitors or companies poaching your best employees).

No One Wants the Long-Term Impact of Scarcity
(not even those who create it)

As stated above, scarcity can be an effective short-term recovery tactic. We saw it work during World War II—it even bonded societies together for the greater mission. We see it work in companies when everyone is asked to pause their budgets, too, so long as everyone understands what’s behind the pause and they see leadership actively pausing even more at their level.

But the long-term impact isn’t a good one no matter if it’s societal or professional.

Psychologists Eldar Shafir (Princeton) and Sendhil Mullainathan (Harvard) have shown through their research how a scarcity mindset creates a "cognitive deficit" or "bandwidth tax,” and this is true for employees, too. The basis of the research is that starving people for resources, as many organizations limitlessly do in the false narrative of efficiency, means employees start to focus only on immediate survival. 

This “tunnel” view of the work world leads to the inability to plan, a loss of motivation to complete tasks or projects (which are often put on hold or subverted as new priorities constantly shift), and move away from the skills and freedom associated with innovative thinking or understanding the bigger picture (Novartney, 2014).

If we were to ask a CEO if that’s what she or he wanted for their organization, my guess is they’d say, “no.” But that doesn’t mean they’d fully understand what it meant to get out of a scarcity habit for running the business.

Reducing waste (weeds, tired soil, dried up land) enables a thriving environment—but that’s not the same as, nor should it be confused with, reducing resources. 

By definition, your resources should not be wasteful, and it confounds me every time I see an organization that somehow believes that by reducing resources, the organization is becoming “more efficient.”

No. No it’s not. It’s simply becoming more resource-depleted, and that is where the scarcity bit comes in.

Scarcity Isn't a Strategy

We see companies “cut” aspects of their business in response to acute issues all the time. The problem is that “cutting” requires recovery, and most times a reset in the area that’s been cut. This type of response to mitigating a financial and operational risk should also be the last, or one of the last, resorts, used as a tactic when the strategy must change quickly, or operations must change in order to preserve and protect the strategy (and there is no other or better way).

If you are simply reducing waste, then it’s not a cut, is it? Leaders should be leading a business that their employees run, and every day should feel like a “best” day: employees do their best, the business is run the best, the customers feel their best and/or receive the best product and service.

Those of you who know me and my work know that I’m a scholar of Hobfoll’s Conservation of Resources (COR) Theory, which primarily focuses on stress responses when there is a perceived threat, risk, or loss of losing resources (status, a job/money, a team, etc). The two primary decision actions to manage the stress is avoidance or approach (Lan & Nie, 2025).

Here’s an example: if you feel tired or slightly off your game, and you have a meeting coming up with someone who has a difficult personality, do you have that meeting? Or do you decide, “nope, not today, I just can’t do it today, I’m going to reschedule.” Most do the latter, and that’s part of Conservation of Resources (avoid).

Another example? You may feel tired or slightly off your game, but the upcoming meeting with the same person (difficult personality) could be to resolve a conflict that has been brewing. In this case, you may need to have this meeting to resolve it and feel better (approach).

So, when companies use scarcity as an ongoing strategy and way of life in order to meet or exceed goals, you can imagine a “loss spiral” taking place: employees begin to live their work life with the primary goal of conserving their resources: they’ll stop sharing ideas, they’ll become protectionist about their work, they’ll limit their access and their interactions, and… yes… push off a lot of meetings. They may even stop showing up to things they can spare, opting-out of contributing anything they consider to be “extra.”

(this all integrates with employee engagement, too, for those of you savvy on how culture impacts performance and productivity… this is on the opposite end of engagement…)

Moving Out of Scarcity
(and also: it's not your job to move a company out of scarcity... unless you're the CEO...)

You can start giving yourself some kind of relief by getting real on the inside about what’s going on when looking on the outside: efficiency is about removing friction, removing drag, removing waste—and to some extent, getting rid of it then shifting how you work and the resources you work with when you see some of those things (friction, drag, waste) creeping back in.

Worth noting: sometimes leadership creates new friction, drag, and waste, so look all ways around, not just in your work zone.

Then focus on those friction points (etc) and align it to the funding: where is the alignment? Where are the gaps? When scarcity prevails, you will see many assumptions that work will get done even when resources aren’t available to do the work. Yes, yes, yes, I realize that’s a “thing” (do it anyway, figure it out), but that tells me the do-with-spend isn’t granular enough. 

I’m not suggesting you get so stuck in the details that you don’t come up for air, I’m just saying that getting to the logic of scarcity usually refutes the assumptions behind it. By drawing lines of scarcity to funding, you are opening the discussion to focus on where opportunities are (and which ones are or would be lost).

At the same time, recommend areas of “waste” where there will be true savings.

But as the sub-title says, it’s also important to know that it’s not your job to move your organization out of a culture of scarcity if that’s the reality of your world. You can often tie what you’d like to see changed to funding, because funding is what likely, and falsely, defended the scarcity to begin with.

This is a far bigger topic than this veerrrrrrry looooooong newsletter can unpack, and I’ve been working on it all week trying to narrow it down.

This is a big honkin’ topic for me, and one that makes me as mad as Yosemite Sam, so I must leave it here for this week’s newsletter, but I assure you, more will come…

Booster for the Week!

(no Booster this week, the newsletter is long enough) :)

With kindness,

Christa

(Helpful? Interesting? Please feel free to forward and invite others to subscribe at askchrista.com/newsletter.)

References

Lan, M., & Nie, T. (2025). Effectiveness or efficiency: the impact of performance pressure and time pressure on employee feedback-seeking behavior. BMC Psychology, 14(1), 64. https://doi.org/10.1186/s40359-025-03808-4

Novotney, A. (n.d.). The psychology of scarcity. https://www.apa.org. https://www.apa.org/monitor/2014/02/scarcity

(remember: most public libraries in the USA offer access to academic papers; however, if yours does not, then Google these papers to see where they are listed, how you can learn more about them, and how you can find similar papers to learn more about conflict management and conflict resolution in the workplace)