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By:

Rashmi Kulkarni

23 March 2025 at 2:58:52 pm

Loss Aversion Is Why Your Good Idea Fails

Your upgrade is their loss until you prove otherwise. Last week, Rahul wrote about a simple truth: you’re not inheriting a business, you’re inheriting an equilibrium. This week, I want to talk about the most common reason that equilibrium fights back even when your idea is genuinely sensible. Here it is, in plain language: People don’t oppose improvement. They oppose loss disguised as improvement. When you step into a legacy MSME, most things are still manual, informal, relationship-driven....

Loss Aversion Is Why Your Good Idea Fails

Your upgrade is their loss until you prove otherwise. Last week, Rahul wrote about a simple truth: you’re not inheriting a business, you’re inheriting an equilibrium. This week, I want to talk about the most common reason that equilibrium fights back even when your idea is genuinely sensible. Here it is, in plain language: People don’t oppose improvement. They oppose loss disguised as improvement. When you step into a legacy MSME, most things are still manual, informal, relationship-driven. People have built their own ways of keeping work moving. It’s not perfect, but it’s familiar. When you introduce a new system, a new rule, a new “professional way,” you may be adding order but you’re also removing something  they were using to survive. And humans react more strongly to removals than additions. Behavioral economists Daniel Kahneman and Amos Tversky called this loss aversion where we feel losses more sharply than we feel gains. That’s why your promised “future benefit” struggles to compete with someone’s immediate fear. Which seat are you stepping into? Inherited seat:  People assume you’ll change things quickly to “prove yourself”. They brace for loss even before you speak. Hired seat:  People watch for hidden agendas: “New boss means new rules, new blame.” They protect themselves. Promoted seat:  Your peers worry the old friendship is now replaced by authority. They fear loss of comfort and access. Different seats, same emotion underneath: don’t take away what keeps me safe. Weighing Scale Think of an old kirana shop. The weighing scale may not be fancy, but it’s trusted. The shopkeeper has used it for years. Customers have seen it. Everyone has settled into that comfort. Now imagine someone walks in and says, “We’re upgrading your weighing scale. This is digital. More accurate. More modern.” Sounds good, right? But what does the shopkeeper hear ? “My customers might think the old scale was wrong.” (loss of trust) “I won’t be able to adjust for small realities.” (loss of flexibility) “If the digital scale shows something different, I’ll be accused.” (loss of safety) “This was my shop. Now someone else is deciding.” (loss of control) So even if the new scale is better, the shopkeeper will resist or accept it politely and quietly return to the old one when nobody is watching. That is exactly what happens in companies. Modernisation Pitch Most leaders pitch change like this: “We’ll become world-class.” “We’ll digitize.” “We’ll improve visibility.” “We’ll build a process-driven culture.” But for the listener, these are not benefits. These are threats, because they translate into losses: Visibility can mean exposure . Process can mean loss of discretion . Digitization can mean loss of speed  (at least initially). “Professional” can mean loss of status  for the old guard. So the person across the table is not debating your logic. They’re calculating their losses. Practical Way Watch what happens when you propose something simple like daily reporting. You say: “It’s just 10 minutes. Basic discipline.” They hear: “Daily reporting means daily scrutiny.” “If numbers dip, I will be questioned.” “If I show the truth, it will create conflict.” “If I don’t show the truth, I’ll be accused later.” In their mind, the safest response is: nod, agree, delay. Then you label them “resistant.” But they’re not resisting change. They’re resisting loss . Leader’s Job If you want adoption in an MSME, don’t sell modernization as “upgrade”. Sell it as protection . Instead of: “We need an ERP.” Try: “We need to stop money leakage and order confusion.” Instead of: “We need systems.” Try: “We need fewer customer escalations and less rework.” Instead of: “We need transparency.” Try: “We need fewer surprises at month-end.” This is not manipulation. This is translation. You’re speaking the language the system understands: risk, leakage, blame, customer loss, cash loss, fatigue. Field Test: Rewrite your pitch in loss-prevention language Pick one change you’re pushing this month. Now write two versions: Version A (your current pitch): What you normally say: upgrade, modern, efficiency, best practices. Version B (loss prevention pitch): Use this template: What are we losing today?  (money, time, customers, reputation, peace) Where is the leakage happening?  (handoffs, approvals, rework, vendor delays) What small protection will this change create? (fewer disputes, faster closure, less follow-up) What will not change?  (no layoffs, no humiliation, no sudden policing) What proof will we show in 2 weeks?  (one metric, one visible win) Now do one more important step: For your top 3 stakeholders, write the one loss they think they will face  if your change happens. Don’t argue with it. Just name it. Because once you name the fear, you can design around it. The close If you remember only one thing from this week, remember this: A “good idea” is not enough in a legacy MSME. People need to feel safe adopting it. You don’t have to dilute your standards. You just have to stop selling change like a TED talk and start selling it like a protection plan. Next week, we’ll deal with another invisible force that keeps companies stuck even when they agree with you: the status quo isn’t a baseline. It’s a competitor. (The writer is CEO of PPS Consulting, can be reached at rashmi@ppsconsulting.biz )

A Mahayuti Landslide, A Fadnavis Moment

Maharashtra’s urban voters have rewarded development over identity, cementing the Chief Minister as the state’s pivotal power-broker.

Maharashtra’s municipal elections have delivered a verdict that will reverberate far beyond city halls. The Bharatiya Janata Party (BJP), allied with Eknath Shinde’s faction of the Shiv Sena under the Mahayuti banner, swept most major municipal corporations, including Mumbai’s Brihanmumbai Municipal Corporation (BMC), the nation’s richest civic body and arguably the most hotly-contested civic body. Across the state, the results suggest that voters in fast-growing cities are prioritising delivery over rhetoric, and that Devendra Fadnavis, the BJP’s strategist and former chief minister, has emerged as the most powerful figure in Maharashtra politics today.


Preliminary counts had indicated a clear Mahayuti advantage in most of the 29 municipal corporations that went to the polls. By mid-afternoon, national media reported the alliance leading in between 19 and 24 municipalities, with the BJP alone ahead in over a thousand ward seats. The Opposition comprising of Uddhav Thackeray’s Shiv Sena (UBT), the Congress, and the NCP factions under the MVA umbrella, along with Raj Thackeray’s MNS, struggled to match the Mahayuti’s performance. Across urban Maharashtra, the message from voters was loud and clear: governance that improves daily life trumps nostalgia, identity politics, or past allegiances.


Sharp Campaigning

The Mahayuti’s success was neither accidental nor purely symbolic. Analysts attribute it to a campaign sharply focused on tangible development issues. Roads, metro expansions, improved public transport, and enhanced civic amenities dominated the narrative. Even where infrastructure projects caused temporary inconvenience, citizens recognised their long-term benefits. In cities such as Mumbai and Pune, voters rewarded parties that had a record of delivery. Emotional appeals or appeals to Marathi identity, which have historically been potent in Maharashtra, largely fell flat.


Mumbai, home to the BMC, was the most closely watched battleground. The alliance of Fadnavis and Shinde eclipsed the combined efforts of Uddhav and Raj Thackeray, signalling a profound shift in the political centre of gravity in the metropolis. Pune, historically an NCP stronghold, cemented the BJP’s grip while Pimpri-Chinchwad and Nagpur reaffirmed the party’s organisational strength and grassroots appeal. In Nagpur, the BJP’s victories are especially symbolic given that the city has long been a crucible of party ideology and organisational machinery.


Civic bodies in the Mumbai Metropolitan Region (MMR) including Thane, Mira-Bhayandar, and Kalyan-Dombivli reinforced the pattern. Even in Latur, where the Congress-led alliance won, and in pockets of Marathwada, where results were mixed, the BJP maintained an edge in several wards. The lesson was clear that while local leadership mattered in places, voters unmistakably went for broad-based and performance-oriented messaging.


Fadnavis hailed the results as a “festival of democracy” arguing that the electorate had chosen performance and delivery over empty promises. Shinde and other allies echoed the sentiment, suggesting the outcome validated both their strategy and their claim to stable governance in urban bodies. With the win, both leaders now have to contend with high urban expectations that they will have to live up to. An embattled Opposition was naturally more circumspect. Ajit Pawar’s NCP celebrated select victories but acknowledged the broader challenge of regaining urban support. The Thackeray brothers, meanwhile, faced a harsher verdict and have now to contend with an even more ominous political future. Their over-reliance on identity politics, emotional narratives, and old political loyalties utterly failed to mobilise voters who now appear more concerned with tangible improvements in civic life.


Big Implications

The implications of the results extend far beyond municipal boundaries. Controlling major city corporations gives the Mahayuti direct influence over large budgets and urban policy decisions, from infrastructure projects to civic administration. If leveraged well, these victories can cement the alliance’s image as a party of delivery, providing a springboard for the BJP and its allies in future Assembly and Lok Sabha elections. Conversely, mismanagement or delays in fulfilling promises could quickly erode public trust.


For the Opposition parties, the message is stark. Relying on historical legacy, identity politics, or fragmented alliances is no longer sufficient to sway urban voters. To remain competitive, parties will need a combination of strong candidates, coordinated strategy, and a credible development agenda. The elections also underline the increasing sophistication of city electorates: voters are willing to endure short-term inconvenience for long-term gains, signalling a maturing political consciousness.


The Mahayuti sweep in Maharashtra is as much about perception as it is about policy. By projecting competence, decisiveness, and a focus on modernisation, Fadnavis and his allies have repositioned themselves at the apex of state politics. Their challenge now is to convert electoral triumph into effective governance. Delivering visible improvements in city infrastructure and services will not only justify the electorate’s confidence but also provide momentum for larger political battles ahead.


In the long run, these municipal results are less about immediate power shifts than about political momentum. They illustrate the growing primacy of performance politics in India’s urban centres, where citizens are increasingly intolerant of stagnation and empty promises. For Devendra Fadnavis, the overwhelming verdict is both an endorsement and a responsibility: the electorate has signalled that it expects tangible results. For his rivals, the lesson is unambiguous. If they hope to challenge the Mahayuti’s growing dominance, they must innovate, modernise, and reconnect with a voter base that now prizes efficacy over rhetoric.


Maharashtra’s cities have spoken. They have chosen development over identity, delivery over nostalgia, and pragmatism over populism.


 (The writer is a political observer. Views personal.)

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