The poor spend a £ better than the rich. They are more discerning as to what they can get for the £1.00. However their focus is moment to moment, short term thinking. Scarcity of funds limits your thinking capacity. You forget everything around you apart from that £1.00. Payday loans are the classic example they are beyond the spending of the £1.00 and immediate. Eldar Shafir (Professor at Princeton University) uses the metaphor of the bucket of water in the bedroom to put out the fire, you create a money pump. The problem is not solved long term as once the source of funds goes you take out another payday loan.
Studies carried out in India to change the mindset of saving and spending, demonstrate how you can change thinking given the right encouragement and ease of implementation. Saving cards were created so that if you did not spend all the money you set out with you would be encouraged to save it, “Impulse Save Cards”.
Teams make great decisions if they have a good environment and the right equipment. Shafir uses the example of a cockpit design, pilot error used to be down to poor design of the cockpit. If every time a new employee joined your organisation you thought about the design of the job, did it give them the capacity to achieve. No-one would intentionally design a cockpit for failure, there is an intelligent way to frame a person’s motivation, however there has to be personal responsibility and accountability in partnership.
Creative thinking studies show that you can grow long term thinking in team members, a simple test of only being allowed to pack 6 items in a bag for a City break weekend. The best answers are belts around the bag, socks in shoes and the justification that this counts as only one item.
What can we learn from these studies of the scarcity gap for business and team working?
- Reward team members for saving the company money as well as bringing money in
- Get team members to look beyond the immediate deal
- Ensure that you have the right environment for your team members – good design for motivation
- Encourage creative thinking – exercise their brains on a regular basis
nuggets of learning can provide a 90 minute workshop on creative thinking, please contact email@example.com
Sourcing for this week’s blog Radio 4 – Analysis – with Eldar Shafir – Professor Psychology and Public Affairs at Princeton University.