The Scarcity Mentality: Why Toxic Bosses Undermine Talent and Productivity

Navigating Corporate Landmines with Dr. Stephen R. Covey's Wisdom from the '7 Habits of Highly Effective People'

Dr. Stephen R. Covey's timeless work in the "7 Habits of Highly Effective People" has transformed countless lives, guiding individuals and organizations toward lasting success. Among his profound teachings is the concept of the scarcity mentality, which contrasts starkly with the abundance mentality. In this article, we'll explore the scarcity mentality, its consequences in organizational settings, and illustrate its perils through fictional "real-life" example of a toxic boss. Specifically, we'll focus on Sarah, age 56, a proud, dedicated and diligent employee who reported regularly and meticulously documented her outstanding achievements weekly and again in her annual self-evaluation, only to have her boss disregard her efforts and focus on his perception of "failures".

The Scarcity Mentality Defined

Dr. Covey's the "7 Habits of Highly Effective People" delves into the fundamental difference between the scarcity mentality and the abundance mentality. A scarcity mentality is marked by the belief that resources, recognition, and success are limited commodities, leading individuals to view others' achievements as threats to their own. Conversely, the abundance mentality fosters a collaborative mindset, where people believe there is plenty of success to go around, and one person's accomplishments do not diminish another's.

"The third character trait essential to Win/Win is the Abundance Mentality, the paradigm that there is plenty out there for everybody," wrote Dr. Covey.

"Most people are deeply scripted in what I call the Scarcity Mentality.? They see life as having only so much, as though there were only one pie out there.? And if someone were to get a big piece of the pie, it would mean less for everybody else," wrote Dr. Covey.? "The Scarcity Mentality is the zero-sum paradigm of life."

The Scarcity Mentality in Leadership

In the corporate realm, the scarcity mentality can manifest in various destructive ways, often harming both individuals and organizations. A troubling scenario unfolds when a toxic boss, driven by a scarcity mentality, actively undermines their subordinates' growth and self-esteem. This often occurs during the annual review process, a pivotal moment for employee recognition and feedback.

The Toxic Boss and the Annual Review Process

Here's a fictional example of how a toxic boss with a scarcity mentality can bully an exemplary employee by weaponizing the annual review process:

Sarah, an extremely dedicated, respected and highly skilled employee with three decades of proven experience, found herself under the leadership of a boss named Richard, who exhibited all the hallmarks of the scarcity-minded mentality. Sarah meticulously executed every aspect of her job and-then-some, achieving highly measurable results and achievements that she diligently and proudly documented in her weekly reports and later in annual self-evaluations. However, Richard, driven by his scarcity mentality, failed to acknowledge Sarah's exemplary work. Instead, during the annual review process, he focused solely on perceived failures, often stemming from minor missteps or unforeseeable and unavoidable circumstances along her path to ultimate success. Sarah's self-evaluation was rich with data and detailed accounts of her achievements according to plan, yet Richard chose to ignore them, fixating solely on the instances along the way where she had stumbled.

"People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production," wrote Dr. Covey. "They also have a very hard time being genuinely happy for the successes of other people – even, and sometimes especially, members of their own family or close friends and associates.? It’s almost as if something is being taken from them when someone else receives special recognition of or windfall gain or has remarkable success or achievement.”

The Disregarded Self-Evaluation and Measurable Results

Sarah's self-evaluation was a detailed testament to her pride, diligence and commitment to her role and the organization. Week-after-week, she meticulously documented her progress, successes, and areas of improvement and reported all to Richard. Her annual self-evaluation was a meticulously detailed treasure trove of her dedication, showcasing her ability to learn from mistakes and continually strive for and achieve ultimate excellence according to plan and timelines. Despite Sarah's commendable efforts, Richard's scarcity mentality clouded his judgment. He brushed aside her detailed reports of measurable results and successes, fixating on minor toe-stubs or unforeseeable circumstances that were typically beyond her control. It was as if her achievements were invisible to him, overshadowed by his need to find flaws.

The Consequences of Ignoring Merit

The consequences of Richard's fixation on Sarah's perceived failures were detrimental to both her morale and the organization. Sarah, who had tirelessly dedicated herself to her work, felt demoralized and undervalued. Her self-worth plummeted as her boss dismissed her accomplishments and fixated on insignificant shortcomings. Moreover, the organization suffered from Richard's narrow focus on Sarah's failures. Her potential contributions were stifled, and the organization missed out on leveraging her skills to their full potential. Unfortunately for the organization, Sarah moved on, as will others down the road. Of course, Sarah and her new employer will be fine. Most managers in well-run organizations do not exhibit a scarcity mentality. In fact, just the opposite. However, this scenario and Sarah's inevitable exit painfully illustrates how a scarcity-minded boss can not only harm individual growth but also hinder overall productivity within the organization.

Covey's Wisdom: Embracing Abundance

In the face of such scarcity-minded leadership, Dr. Stephen Covey's teachings on embracing abundance become especially relevant. Covey's the "7 Habits of Highly Effective People" promotes the idea of nurturing an abundance mentality, which fosters collaboration, trust, and shared success within organizations. Covey's Habit 4, "Think Win-Win," underscores the importance of seeking mutually beneficial solutions. Leaders who embrace this mindset understand that fostering the success of their team members ultimately contributes to their own success. They acknowledge that resources and recognition are not finite, and empowering others leads to collective growth.

Future leaders: Beware of toxic leadership's dark side and embrace abundance.

Dr. Stephen Covey's teachings on the scarcity mentality and abundance mentality offer profound insights into the dynamics of leadership within organizations. Toxic bosses driven by a scarcity mentality can significantly hinder the growth and potential of their subordinates, as exemplified by Sarah's experience. Furthermore, these leaders can undermine the organization's overall productivity and morale, causing valued team contributors to move on.

In times when competition is inevitable, Covey's timeless principles remind us that abundance is attainable for all. True leadership seeks to elevate everyone, not just oneself. By internalizing Covey's wisdom and fostering an abundance mentality, professionals aspiring to be leaders can create a more nurturing and productive environment where success is shared, and the organization thrives as a whole. In doing so, they ensure that the true potential of their team members is recognized and celebrated, leading to retention, organizational success, a brighter and more prosperous future for all.

"In the long run, if it isn’t a win for both of us, we both lose. That’s why win-win is the only real alternative in interdependent realities.” — Dr. Stephen R. Covey

One idea for applying these insights to your career is to assess your own mindset and how it affects your interactions with others. Are you operating from a scarcity or abundance perspective? How can you cultivate a more positive and empowering attitude?

Don't be a Richard.