This article encourages investing in time as our most valuable resource. We provide approaches companies may use to help employees invest time wisely. In part, this article is informed by Sendhil Mullainathan and Eldar Shafir new book called Scarcity: Why Having Too Little Means So Much.
As an academically trained economist, the word "Scarcity" has a pretty well-defined meaning. I think of it in terms of Consumer Choice Theory. I think of budget constraints and indifference curves. I think of it in terms of marginal utility. This new book caused me to completely rethink my understanding of scarcity!
The authors flip the script on scarcity. They present it as a cognitive challenge. They present scarcity in terms of bandwidth tax. A tax that adds a cognitive load to our decision processes, impairing ANYONE carrying a high bandwidth tax. This may cause bad decisions and a potential life failure. The bandwidth tax causes impaired decision results from the natural psychological tunneling occurring when we face scarcity. As an example, if someone is worried about missing bill payments at the end of the month, they will become hyper-focused on raising money for the bills. Anything that is "in the tunnel" is a potential solution (like a payday loan offered before month-end). Anything that is outside the tunnel is generally ignored (like the bandwidth needed for almost everything else, including long-term fiscal discipline to prevent missing bills in the first place.) As an interesting note, the authors demonstrate that anyone (rich or poor) has impaired cognitive ability when under the influence of a bandwidth tax.
Ultimately, the authors challenge the direction of the poverty causal arrow. Instead of the notion that poverty is a result of some life failure, they suggest life failure is the result of poverty.
As a practical application, scarcity in our modern business world is usually manifest as TIME SCARCITY. Scarcity is a broad concept, it encompasses any necessary resource to which we may have reduced access. Money is certainly a driver of scarcity-enabled poverty. But time and food are certainly high on the list as well. Just like a lack of money can cause reduced cognitive bandwidth, tunneling, and bad decisions, a lack of time can do the same. In many ways, being "Time Poor" is equivalent to being "Money Poor."
Think of how you feel when you are super busy with work. Standard 40 hour work weeks turn into nights and weekends. There is a constant flow of meetings and deadlines. You feel like you can not catch up, almost like you are drowning. Your personal life will almost certainly suffer. The authors present many studies showing how ongoing time impairment causes sub-optimal performance, stress, work dissatisfaction, burn-out, and attrition.
But even more than that, robbing employees of time may cause a short-sightedness that leads to a lack of business investment. While "making hay while the sun shines" is a time-honored tradition, being thoughtful to build in enough time for investment is important as well. I'm referring to targeted creativity-based time investments that drive new business solutions, thought leadership white papers, strategic designs, scenario analyses, training, education, and other creative endeavors that drive future business growth. (1) Below are a few examples of how companies help manage time in a way to reduce the bandwidth tax.
Citibank implemented "No Zoom Fridays." They did this because 1) The pandemic has wearied us all. 2) Zoom really is exhausting. Science explains why. 3) A meeting-free day helps everyone get more done.
Capital One Bank has a practice of "No Meeting Friday" every other Friday. This is a day for training, pursuing higher education requirements, or other high focus activities.
Professional services firms manage client-facing employee utilization to optimize availability for client work. No matter the employee level, everyone is afforded some non-client time. This time can be used in a variety of ways, including investing in new solutions or other more creative endeavors. This approach's challenge is that utilization targets are often managed as a floor, or minimum billable hours. This can create an environment where staff is over 100% utilized for long periods of time. Causing a large bandwidth tax and the challenges mentioned earlier leading to attrition. Potentially, a solution would be to manage utilization targets as a ceiling, where managers would be held accountable for allowing staff to exceed the ceiling. While the target is the same, the difference is how the target is managed. This approach should provide an incentive to work on investment-oriented projects.
Finally, there is an old saying by Friedrich Nietzsche:
“That which doesn’t kill you makes you stronger”
This may be true in the very short term. A bandwidth tax can be used as a "focus dividend" when an important business priority needs to get accomplished. Think of the few days at the end of the month for accounting to close the books. The accounting team is highly focused on closing activities. But when the time-bandwidth tax is being paid for multiple weeks, months, or longer, the Nietzsche saying is no longer true. Alternatively, my saying is:
"In the longer term, that which doesn’t kill you makes you weaker”
Studies have shown that a long-term bandwidth tax will lead to a variety of stress-related issues, and could cause glucocorticoid-related diseases like cancer or diabetes. (2)
I did like this book and recommend it to others.
(1) The importance of creativity in business cannot be underestimated. In Westlake and Haskel's book, Capitalism Without Capital: The Rise of the Intangible Economy, they make the case for the creative-based economy, which they call the Intangible Economy. The use of ideas and technologies to power those ideas is the driving force in business. They offer approaches to capture value in the Intangible Economy.
(2) Besides the studies mentioned in the book, Scarcity, Robert Sapolsky in his book Behave, goes into impressive detail on the impact of stress on our lives.