How an abundance mindset makes better OKRs
I’ve mentioned the idea of an abundance mindset over a scarcity mindset on this blog before. The short of it, as Steven Covey writes, is that, “Scarcity mentality refers to people seeing life as a finite pie, so that if one person takes a big piece, that leaves less for everyone else. An abundance mindset refers to the paradigm that there is plenty out there for everybody.” Or as my friend Daniel North likes to say, “Why don’t we just grow the pie?” When choosing our goals – especially at the leadership and strategic levels – we often talk about “taking” market share or “owning” some part of the overall customer base. What if, instead, we set goals with an abundance mindset? What would that look like and how would that make for better goals?
Scarcity mindset limits our creativity and innovation
Strategists and product managers alike like to talk about the concept of TAM – total addressable market. It’s a good way to get a sense of whether a strategic direction or business problem is worth exploring further. If there aren’t enough customers in your chosen market perhaps it’s better to look elsewhere. If the TAM is sufficient then our strategic objectives and key results (OKRs) will reflect our desire to convert some percentage of that market into happy users of our products and services. Makes sense to me. But what if that market is saturated? This is what Chan Kim & Renée Mauborgne called a “red ocean” market. In a red ocean we are fighting for differentiation through cost or value tradeoffs while defending against the competition already playing in that space. The mentality these goals come from is one of scarcity. The TAM is only so big, what part of it can we get?
There are always more people and new behaviors
Markets aren’t static. They shift based on a variety of factors including technological advancements (AI anyone?), geopolitical shifts, lowered barriers to entry, economic conditions (cheap money for example), or increased accessibility to new consumers to name a few. All of these influential factors on our market create opportunities for us to “grow the pie.” The efficiency of AI means work that humans have done in the past may get outsourced to an algorithm while those humans take on new, more complex tasks. Lower barriers to entry along with a more broadly connected global population means that the TAM that exists today may not be the TAM that exists tomorrow. How might we help grow the TAM rather than fight for a piece of the existing one? As we start to set goals from this abundance mindset we move away from fighting for a slice of the “red ocean” and instead create pockets of “blue ocean” where we can succeed without having to compete over a zero-sum market.
What do “abundance” OKRs look like?
Let’s make this idea real. For this example assume you work for a payments company. Your mission is to make digital payments easy, safe and cheap for both merchants and buyers. This is a crowded space. At the very least you’d be fighting with giants like Mastercard, Visa, Stripe and Paypal. That doesn’t take into account a myriad of smaller and local competitors. Your strategic OKRs with a scarcity mindset might look something like this:
Objective: Make it dead simple for merchants of any size to collect digital payments by the end of 2025.
Key Result: Convert at least 10% of existing merchants who already take digital payments to our platform
Key Result: Increase average number of transactions per merchant by 15%
This is a red ocean goal. You’re vying to win over parts of the existing TAM.
But, what if you chose to take an abundance mindset? What would your OKRs look like? Here’s one option:
Objective: Make it dead simple for merchants who do not accept digital payments to start taking them by the end of 2025
Key Result: Onboard 1000 new “analog” merchants onto our digital platform
Key Result: Each newly onboarded merchant processes at least 500 transactions per month in their first 6 months
The focus here is on the “blue” parts of your ocean. Rather than fight to convert customers away from your competitors you are creating new customers. You are building your own part, if not a completely new, TAM. You’re growing the pie.
To achieve these goals you’ll have to be creative and innovative. Your strategy is no longer about differentiating from the big players in your space but rather to convince disconnected merchants to get online and to do it with you. Perhaps there’s a point in the future where you’ll dive back into the red ocean but, at first, why not work to grow the overall market and succeed in the new parts?
An abundance mindset can drive innovative goals
Most companies will focus on OKRs designed to own a bigger share of the existing pie. With an abundance mindset your organization will have the competitive advantage to look beyond the obvious opportunities and create your own. In doing so, both the strategic and tactical work your teams do will change in focus and scope. However, it will be work designed to innovate in your space rather than become yet another player in a red ocean.
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