• Leila Ainge

trade offs


If you’re curious about sales and the behavioural choices that people make you’ll be familiar with scarcity. In his bestselling book on influence Peter Cialdini introduced us to the scarcity principle as a mental shortcut we make to place higher values on things that are scarce.


Scarcity effects our thinking and our feeling, and it makes sense that it would show up in the leadership decisions we make. On the one hand, the feeling of scarcity helps us to use what we have more effectively. Perhaps the numbers in the bank nudge you to be more conservative with your choices or helps you grab opportunities whilst they last?


Scarcity creates the conditions that help you prioritise, or create forecasts bases on what you expect to have, and it will also nudge you to use what we already have more effectively as a form of conservation bias.


How do we know if these biases are helpful?


Reflect on the decisions that drive your goals. Conservation bias shows up as being safe and staying with the status quo. Recognise when trade off decision making leans towards survival and instead ask yourself what you would need to thrive.


Are all decisions equal?


The problem I have with behavioural economics and scarcity theory is that it assumes we have a stable perception of value, that applying generic techniques will have broadly generic effects. This is a privileged way of thinking. When I worked for a homeless charity I was used to hearing narratives around the ‘education’ of people who had become homeless, and I almost believed it myself. There was definitely a sense that people who are homeless make poorer choices than those with a roof over their heads. My perception shifted when one of my clients described the power of supermarkets as ‘temptation arcades’, preferring to go to the local shop for milk and bread. This was after I’d offered some well-meaning and privileged advice about bulk buying.


People who have less are forced with more persistent and chronic trade off thinking because of a scarcity mindset than those who have more resources. The decision to spend £1 when you have £20 is harder than a decision to spend £300 when you have thousands. Having less is a cognitively exhausting situation to be in. This is what I want you to think about when you look at your goals for 2022.


· Are you rested?

· Is your goal based on survive or thrive?

· Can you verbalise your inner quick thinking, what trade offs are you making?


Abundance


I’ve managed to avoid using the word abundance so far, and fear not, I am not going to encourage you to manifest an abundance of wealth. However, it is helpful to think about abundance in terms of resources when you set goals and there is plenty of psychological evidence that thinking in an abundant way is more helpful than not.


For example, think about the resources you can lean into, borrow or swap. Traditional goal setting encourages us to think about our goals in a very self-driven way. Instead of thinking 'is my goal realistic or achievable?' consider if it’s realistic or achievable with help. Then write down what that specific help looks like. Who is your virtual team? Who is on your board of advisors for 2022?


If you’ve enjoyed this blog then you might enjoy a book by Sendhil Mullainathan and Eldar Sharif, Scarcity: Why having too little means so much. You can get it here



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