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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 )

Ajit Pawar, Muralidhar Mohol at war

The Mahayuti coalition partners have turned into bitter rivals in the municipal fight for Pune and western Maharashtra

Pune: An open, and in some places covert, conflict is underway between BJP leader and Union Minister of State Muralidhar Mohol and Nationalist Congress Party president and Deputy Chief Minister Ajit Pawar, for dominance over cooperative institutions and local self-governing bodies in western Maharashtra.


A fierce exchange of accusations and counter-accusations between Mohol and Pawar has unfolded during the Pune and Pimpri-Chinchwad municipal corporation election campaigns. In the first phase of the campaign, Mohol targeted Ajit Pawar, alleging that his party had given tickets to candidates with criminal backgrounds. Ajit Pawar responded strongly, saying, “Check the list of candidates fielded by the BJP in the last 15 years, and you will understand how much truth there is in the BJP's allegations and who has actually given tickets to criminals.”


Pawar also demanded an inquiry into who helped a person from Pune flee abroad and obtain a passport. He escalated matters further, demanding an inquiry into how a Pune-based figure had allegedly fled abroad and secured a passport - an insinuation aimed squarely at the BJP’s local power structure. At rallies he has also accused the BJP of presiding over seven years of developmental inertia in Pune, dismissing the party as a “triumvirate of power brokers.”


Except for BJP state president Ravindra Chavan, other local leaders have avoided responding to Pawar. Local leaders have taken the stance that Chief Minister Devendra Fadnavis will respond. One former BJP MP said, “We will be coming together after the municipal elections anyway, so why respond?”


Widening Schism

This conflict between Pawar and Mohol has been ongoing since the 2024 Lok Sabha election. Ajit’s wife, Sunetra Pawar lost the Baramati Lok Sabha seat to Supriya Sule. Traditional BJP voters did not vote for Ajit Pawar’s party. This incident put both the BJP and the NCP on alert. BJP leaders realized that their alliance had not resonated with the voters. Ajit Pawar understood that while he had a good rapport with BJP leaders, BJP voters were not shifting their allegiance to him.


His party’s platforms prominently feature the late Yashwantrao Chavan, a Congress patriarch and invokes the legacy of Phule, Shahu and Ambedkar (icons of social reform) rather than Hindutva. This deliberate signalling is to reassure his traditional constituency in western Maharashtra where the Pawars have dominated politics and cooperative institutions for decades across Pune, Sangli, Satara, Kolhapur and Solapur.


The BJP wants to establish its party on a firm footing in western Maharashtra. The BJP has been trying to achieve this for several years. Senior leader Sharad Pawar, and consequently Ajit Pawar, dominate the politics and some cooperative institutions in the Pune, Sangli, Satara, Kolhapur, and Solapur districts of Western Maharashtra. The BJP's strategy is to take control of these institutions or gain a foothold in them. Recognizing that it is necessary to stop Ajit Pawar for this purpose, the BJP has formulated a complementary strategy.


Murlidhar Mohol was given the responsibility of the party in Western Maharashtra. After Mohol was elected to the Lok Sabha, he was given the post of Minister of State for Cooperation. In the central government, the cabinet ministership of the Cooperation department is held by Amit Shah. Through Mohol, Amit Shah has kept his focus on Western Maharashtra. The party has given Mohol the 'charge' of Pune city and district. Therefore, the Mohol-Pawar conflict has become inevitable for maintaining dominance. Ward boundaries were drawn for the municipal corporation elections. The Congress alleged that BJP leaders interfered in the administration while drawing these boundaries. Expressing dissatisfaction with the ward boundaries, Ajit Pawar expressed his displeasure with the BJP’s ‘administrators.’ Subsequently, Mohol challenged Pawar’s presidency in the wrestling association. After the Chief Minister intervened, the presidential election was averted and Mohol was given the post of senior vice-president.


Battle For Dominance

Seeing signs of achieving good success through the alliance with Sharad Pawar's party in Pune city, Ajit Pawar became more aggressive. So, the BJP wants to maintain its dominance in Pune, and Mohol is working towards this goal, with the party also supporting him. Ajit Pawar is striving to regain control of the Pimpri-Chinchwad Municipal Corporation, and in this effort, he is naturally clashing with the BJP and Mohol.


The Chief Minister is stating that the proposed Purandar airport will be beneficial for farmers and industrialists in Western Maharashtra for exporting goods, and in a way, he is trying to appease young farmers by implementing this airport project. This is an ambitious project for the BJP. The BJP wants to maintain its hold on the municipal corporation for this project and the development around it.


Considering the social situation in Western Maharashtra, a political leader opined that Sharad Pawar's leadership is deeply rooted, and the youth here are attracted to Ajit Pawar. Mohol is relatively new to Western Maharashtra. However, the BJP has chosen him keeping the next 10-15 years in mind. It seems that the BJP’s senior leaders have decided on a long-term strategy to provide Mohol with all-out support.


What looks like a local spat is thus something larger - a test of whether the BJP can finally crack western Maharashtra’s cooperative fortress, and whether Ajit Pawar can prove that his rebellion has yielded more than ministerial office.

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