This week we are talking about scarcity and the science of having less and more importantly, how this impacts our thinking, our choices and our lives. This is also Part 1 of the topic too and we’ll continue to cover more in next week’s episode. We’re talking about things like tunneling, borrowing and the ways in which we become more myopic when we function from scarcity.
Much of this week’s show comes from the work of Sendhil Mullainathan and Eldar Shafir who wrote the book Scarcity: the New Science of Having Less and How It Defines Our Lives. A perfect title. You can hear a couple of their talks here and here.
Essentially, what they discovered was the effect of scarcity on our minds leads us to bad choices. That seems sort of obvious however, we are typically never away of this. Living with too little imposes huge psychic costs. Now their work is primarily looking at poverty however, they have also applied the same underlying concepts and psychology to anyone who is feeling that they have “less” of anything. The world of business is no different in that we often feel we have less time and less money. The good news is, the phenomenon of scarcity works the same for everyone, like gravity.
What does this scarcity of time (both our belief and our reality) do to us…exactly?
- It reduces our mental bandwidth: how we process and make decisions
- Basically our executive control is decreased making us less insightful, less forward-thinking and less controlled. And there is a bandwidth tax overall.
- Let’s talk about time: time pressure does focus our mind and it seems to make us more effective…but eventually it ends in failure because of tunneling
- It forces us to tunnel: we focus on one immediate thing which leads us to neglect other important things occurring within our context and changes the way we choose.
- We experience a tunneling tax: for example, the decision to multi-task
- We check email while listening in on a conference call, or on our cell phone at dinner or while in the car…
- They seem efficient at the time, but there is tax; we’ll miss something important on the call, with our loved one or get into an accident
- It forces us to “borrow”: we borrow time from the future.
- Instead of answering the email we could answer now due to some other pressing task, we put it off, thinking that we will suddenly have time later.
- Never stopping to ask, “how will I make time for it later?
And here’s the big thing, even though we “know” about the future’s scarcity, we don’t feel it now. It doesn’t capture our mind in the same way. We have a “present” bias; we overvalue immediate benefits at the expense of future ones and this can make us all seem a little ridiculous at times can’t it? But once we understand how scarcity really impacts us, we can start to understand what to do about it?
What currently do you find yourself living in scarcity about? How does scarcity impact you?
Stay tuned for next week when we get into exactly what to do about it.