In Abundance: The Future is Better Than You Think by Peter H. Diamandis and Steven Kotler, the authors make the point that technological developments and continuing innovation will bring to the world a future of abundance rather than scarcity, of increasing prosperity rather than increasing poverty. I believe that they are right so long as we can maintain freedom in general, free markets in particular, reasonable levels of taxation and relative peace throughout the world. As I pondered on the ideas they presented, it occurred to me that a business leader needs to have an abundance mindset in strategic development. An overall scarcity strategy cannot bring a strong and bright future to an organization. We cannot simply cut and slash our way into growth and prosperity. Nor can we simply spend our way into growth and prosperity. An abundance strategy is one of tremendous value generation.
My wife and I built a home using a general contractor who builds custom, luxury homes. I commented to him one day that it had occurred to me that there are three types of people who buy a custom home:
- Maximum WOW! These buyers do not care how much it cost. They want to upstage everyone else at any cost.
- Maximum value. Value is defined as quality divided by cost. These buyers are willing to spend more money if they get a good return on their investment relative to their experience living in the home and to their resale value.
- Maximum value. Value is defined as quality divided by cost. These buyers are willing to spend more money if they get a good return on their investment relative to their experience living in the home and to their resale value.
I told him that I thought that he could build homes for wow buyers and value buyers, but he could not build a home for an economy buyer to which he agreed.
At first glance we may be tempted to see a maximum wow strategy as an abundance strategy, but maximum wow and maximum economy are both scarcity strategies. Both strategies are low value generation strategies, and low value generation will sooner or later lead to scarcity. In maximum wow the cost is too high relative to the quality generated. In maximum economy the cost is low, but the quality generated is too low relative to that cost. The abundance future is in high value generation that comes in a maximum value strategy.
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