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How A Scarcity Mindset Can Affect Your Business Etiquette

Over the past decade or two there has been a move away from the stereotyped “cut-throat” attitudes in business. Instead, business owners work hard to present as trustworthy, authentic, and worthy of your support. In turn, they hope to earn brand loyalty, staff loyalty, and trust within both their professional and consumer communities. Along with this behaviour reform, there has been a growth in the number of self-development books for leaders and business owners, many of them focusing on mindset.

What is Mindset?

“Mindset” has become something of a recent buzzword, especially since the publication of Carole Dweck’s landmark book of the same name. She has taught us the difference between a fixed mindset versus a growth mindset, and how the latter is optimal for learning, quality of life, and resilience.

Fixed vs Growth Mindset

A fixed mindset is one limited by fixed attributes such as beauty, physical strength, and intelligence. If one possesses a fixed mindset and encounters a difficult challenge or a failure, the fixed mindset leads to attitudes of “I’m not smart enough to do that”, and one then tends to give up.

On the other hand, a growth mindset leads one to think “perhaps if I really apply myself I can overcome this challenge”. Having a growth mindset means that growth and optimism are linked to how hard one works (a flexible attribute) as opposed to how smart one is (a fixed attribute).

Scarcity vs Abundance Mindset

Fixed and growth mindsets relate to perceptions of one’s own abilities and related successes and failures. On the other hand, scarcity and abundance mindsets relate to beliefs about one’s opportunities and how they relate to success and failure.

An abundance mindset is characterised by a belief that there is always “enough”. Enough opportunities, enough clients, enough staff, enough money, enough time.

A scarcity mindset is fear driven. It is characterised by the fear that one will miss out and therefore fail.

How Does This Relate to Business?

With a fear-based scarcity mindset, we are inclined to make decisions out of desperation. We are driven by the immediate picture and swing wildly from crisis to crisis. We cut our prices in a desperate bid to draw in clients, without thinking of the longer-term financial impact. We hire and fire staff reactively, resorting to instant dismissal on the one hand and poaching on the other, without thinking of the longer-term impact on professional relationships and reputations. We lurch from stress to frustration to anger to burnout, because we haven’t kept the bigger picture in mind.

In contrast, with a secure abundance mindset, we experience less stress in the face of challenges and act with more “big picture” foresight. We encourage collaboration with other businesses because we don’t feel that we are in competition, in the unhealthy “cut-throat” sense of the word. We share knowledge and expertise freely and wisely, because we are welcoming of growth within our profession as opposed to seeing the growth of others as a threat. We recognise that staffing issues come in seasonal waves, sometimes ample, sometimes insufficient, but overall enough. We believe wholeheartedly that there are enough people out there interested in our message, our service, or joining our team. And we are equally at peace with knowing that we are not everyone’s cup of tea. We see the whole journey, not just getting the engine running, or the occasional pothole in the road.

It Nearly Killed Me

Some years ago I had a life-changing business experience. Catastrophic and potentially bankrupting at the time. Stressful enough to see me wake with chest pain. But it didn’t kill me. And it was one of the most powerful lessons in business I have ever learned. And I’m happy to share it with you.

My business had been ticking along nicely. We had grown steadily over the years, gradually expanding my team. Then I won a competitive tender for some funding, allowing us to open a second office in a new location.

In a calculated risk I signed the contract and employed a second team to meet the contract obligations. The funding was paid on a fee-per-service basis. No start-up fund. No administrative fee. A simple fee-per-service. We would only eat what we killed, so to speak.

What followed was five months of battle to first gently and then fiercely try to bring my new team on board with the right attitude. They pushed, they bucked, they scratched. Why weren’t they as easy to get along with as my pre-existing team members? Why was this so hard?

Unfortunately, I didn’t know then what I know now about mindset. This meant that I didn’t know what I was seeing when things started to fray around the edges with my second team.

In a nutshell, they had never worked in the private sector before. They refused to accept that we could only afford to “eat what we killed”. They were used to being employed simply to turn up. I don’t think they ever believed that I didn’t have a secret pot of money to pay them if everything went to hell in a handbasket. Which it did.

They struggled to adjust and then they left. Two days before Christmas. To go into business for themselves.

What Did I Learn About Mindset?

In hindsight, I can see that the second team was collectively stuck in fixed, scarcity-driven thinking. While their professional skills were undeniably excellent, their difficulties in being autonomous and growth-oriented were highlighted by scarcity-based excuses. “Not enough” time to do anything. “Not enough” control. “Not enough” independence. “Not enough” similarity to “how things have always been done before”. They were working under the exact same conditions as my original team, but they possessed a completely different mindset.

What did I learn? That people are “interesting”? Yes. That I can survive anything? YES. That mindset influences professional behaviour? Absolutely!

I learned that people will do anything, and attempt to justify their behaviour, when they are scarcity-driven. But I also learned that abundance and big picture thinking always win the day.

Personally, I learned that I have a strong and courageous growth mindset, which held the big picture in mind while I rebuilt my team. Which I did, thanks to some very loyal members of my original team who could see the big picture, weren’t scarcity-driven, and were prepared to go above and beyond to make that big picture work. I will forever be grateful to them.

Check Your Mindset

In more recent times I’ve had the opportunity to mentor other business owners, and have watched as new businesses come and go. What I am learning is that time and time again, scarcity drives people to act with only the short term in mind.

If you’re only focussed on the short-term task of starting the engine (or getting your business running) you will resort to desperate means.

You will show short-sighted and scarcity-driven thinking when you pursue staff in underhanded ways such as poaching. You are scarcity-driven when you demonstrate no thought to future professional collaborations and relationships.

You are scarcity-driven when you offer exorbitant remuneration, with no thought to how this will play out for you in the financial long term. You might think this reflects an abundance mindset, but it is the short-term, desperate motive behind the dollars that reveals the scarcity-driven truth. And sure, you might attract a team dazzled by money, and lucky them. But who wins when your business finds itself unable to sustain that financial picture, or worse, closes its doors? No-one.

You are scarcity driven when you don’t charge a fee that reflects your worth. You are scarcity-driven when you don’t trust your team to be innovative and autonomous. You are scarcity-driven when you deliberately undercut your industry colleagues. Ever royally pissed off a professional peer? I wonder if scarcity drove the behaviour behind that too?

Ask yourself this: How would you feel if another business owner engaged in these actions? If you can’t whole-heartedly cheer their ingenuity and growth, then perhaps you need to have a bit of a chat with yourself.

What’s The Moral of The Story?

I’m still learning. That will be a lifelong task. I’m by no means perfect. But in my near-20 years of owning a small business, I have learned a lot about playing the long game, keeping the big picture in mind, maintaining both abundance and growth mindsets, being flexible and relationship-oriented, and avoiding scarcity like the plague.

Allowing an abundance mindset to support values-based business decisions allows me to sleep at night.

Every business decision I make is based on these bigger picture principles.

Otherwise, what’s the point?

How A Scarcity Mindset Can Affect Your Business Etiquette

Tess Crawley

Dr Tess Crawley is an Australian clinical and forensic psychologist, based in Hobart, Tasmania. She completed a PhD in 2004, researching psychopathy in young women and is a former lecturer / clinic director at the University of Tasmania. Tess has worked in the Tasmanian and Queensland prison systems, among a variety of other clinical roles, before opening her solo private practice in 2001. Tess launched her group practice in 2009, Dr Tess Crawley & Associates. Tess has a special interest in perinatal mental health and rural mental health, and spends much of her professional time mentoring other psychologists, both those new to the profession and mental health leaders. She provides online mentoring programs for those professionals further afield. Tess is a busy mum to two boys, a mad Star Wars fan, and loves ice cream, coffee, and good red wine (not necessary all at the same time). The Stigma Rebellion blog is named after one of Tess' online communities, and continues her work towards increasing dialogue and reducing stigma around mental health issues.

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APA Reference
Crawley, T. (2018). How A Scarcity Mindset Can Affect Your Business Etiquette. Psych Central. Retrieved on April 4, 2020, from


Last updated: 13 Aug 2018
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