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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 )

All for show…

Wadale Lake clean-up rekindles debate on accountability and the timing of civic elections


Panvel: The long-overdue cleaning of Wadale Lake, one of the oldest in Panvel, initiated after sustained persuasion by local citizens and environmental groups, has once again brought into focus an uncomfortable question: do civic bodies act decisively only when elections are around the corner?


With municipal elections slated for January 15, the sudden urgency shown by the administration has sparked a wider debate on whether more frequent elections—perhaps every two years—could compel authorities to address citizens’ issues in a timely and consistent manner.


For years, Wadale Lake had been a symbol of neglect. Once a thriving water body supporting local biodiversity and acting as a natural buffer against flooding, it gradually turned into a dumping ground for solid waste, sewage inflows and construction debris. Repeated complaints by residents and representations by environmental activists failed to yield meaningful action. It was only after sustained public pressure, amplified through protests, petitions, and social media campaigns, that the civic administration finally initiated a comprehensive cleaning drive.


“This lake did not deteriorate overnight, and it won’t recover overnight either,” said an environmental activist, who has been associated with lake conservation efforts in the region. “What is worrying is that authorities respond only when there is political pressure. Environmental protection should be a continuous responsibility, not an election-time activity.”


The cleanup operation currently underway involves removal of silt and plastic waste, desilting of feeder channels and preliminary steps to prevent further sewage discharge. Civic officials maintain that the initiative is part of a broader urban rejuvenation plan. However, residents remain sceptical, noting that similar assurances in the past have failed to translate into sustained outcomes.

‘Same Pattern’


“Every five years, we see the same pattern,” said local resident Ramesh Kulkarni, who lives in a housing society near the lake. “Before elections, roads are repaired, drains are cleaned and lakes are suddenly ‘discovered’. Once the polls are over, the momentum disappears. If elections were more frequent, perhaps officials would be forced to remain responsive throughout their tenure,” he added.


This sentiment has fuelled a growing discussion on the idea of holding civic elections every two years instead of the current five-year cycle. Proponents argue that shorter electoral cycles would increase accountability, reduce complacency among elected representatives, and ensure that pressing local issues—such as sanitation, water bodies, and public health—receive continuous attention.


Environmentalists see merit in the argument but also caution against viewing elections as a panacea. “Frequent elections may create pressure, but without strong institutional mechanisms and citizen oversight, the problem will persist,” said urban ecologist Dr. Nikhil Patwardhan. “What we need are legally binding lake protection plans, dedicated budgets, and empowered ward committees that function regardless of the electoral calendar.”


Civic officials, meanwhile, defend the current system, pointing out that governance requires continuity and long-term planning. A senior municipal officer, requesting anonymity, said, “Large infrastructure and environmental projects cannot be planned or executed in a two-year horizon. Frequent elections may lead to populism and short-term measures rather than sustainable solutions.”


Yet, for residents living with the consequences of delayed action, such arguments offer little comfort. Many fear that once the elections conclude, Wadale Lake may again slip into neglect unless constant vigilance is maintained.


As excavators work along the lake’s edge and volunteers continue to monitor the cleanup, Wadale Lake has become more than an environmental issue. It now stands as a case study in civic responsiveness—and a reminder that citizen pressure remains one of the most powerful tools to ensure accountability. Whether that pressure should be institutionalised through more frequent elections or stronger governance frameworks remains a question that policymakers can no longer afford to ignore.

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