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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 )

BJP defends unopposed wins as opposition cries

Mumbai: As the dust settles on the nomination process for the 2026 Maharashtra Municipal Corporation elections, a massive political firestorm has erupted over the "unprecedented" number of candidates elected unopposed. While the ruling Mahayuti alliance, led by the BJP, celebrates these victories as a mandate for their governance, the Opposition has branded the trend a "murder of democracy," alleging a systemic campaign of coercion, bribery, and administrative bias. While the MNS has moved court over the issue, revenue minister Chandrashekhar Bawankule said that the BJP is not worried as there is no “wrongdoing”.


Of the 2,869 seats across 29 municipal corporations heading to polls on January 15, nearly 68 candidates—the vast majority from the ruling Mahayuti—have already secured their seats without a single vote being cast. The BJP is the primary beneficiary, with 44 unopposed wins, particularly in strongholds like Kalyan-Dombivli (KDMC), Pune, and Pimpri-Chinchwad. The Eknath Shinde-led Shiv Sena secured 22 seats, while the Ajit Pawar-led NCP took 2 seats. Interestingly, Kalyan-Dombivli Municipal Corporation, the flash point of clashes between the BJP and the Shiv Sena under Eknath Shinde, recorded the highest concentration of uncontested wins, with 22 seats decided at the withdrawal stage.


BJP’s Defiance

State Revenue Minister and senior BJP leader Chandrashekhar Bawankule came out strongly in defense of the party’s gains on Monday. When asked about the questions raised by the opposition, Bawankule dismissed the Opposition's outcry and stated that the BJP is "not worried" about legal challenges.


"There have been no violations of any kind. Candidates withdraw for many reasons—sometimes they recognize the overwhelming support for our work, and sometimes they realize they lack the organizational strength to compete. If the Opposition wants to move court, they are free to do so, but the process has been entirely transparent," Bawankule remarked.


BJP leaders have further argued that these wins are a "certificate of good governance" and reflect the popularity of Chief Minister Devendra Fadnavis and the strategic planning of State President Ravindra Chavan.


The Opposition has reacted with unprecedented vitriol, alleging that candidates were forced out through a mix of financial inducements and police pressure.


Cash Scandal

The Maharashtra Navnirman Sena (MNS), led by Raj Thackeray, has announced it will move the High Court. MNS leader Avinash Jadhav alleged that their candidates in Thane and Kalyan received dozens of threatening calls and were even visited by local police to "persuade" them to withdraw.


Shiv Sena (UBT) MP Sanjay Raut alleged a massive cash scandal, claiming that bags containing Rs 5 crore were delivered to opposition candidates in Jalgaon and other districts to ensure they stepped down. He referred to the State Election Commission (SEC) as a "pet cat" of the government.


The controversy took a dark turn in Solapur, where Congress MP Praniti Shinde alleged that a local MNS leader, Balasaheb Sarvate, was killed during a dispute related to ensuring an unopposed win for a BJP candidate.


Sensing the gravity of the situation, the Maharashtra State Election Commission (SEC) has taken the unusual step of withholding the formal declaration of these winners. The SEC has ordered an inquiry into all wards where unopposed wins occurred. Returning officers, municipal commissioners, and police chiefs have been directed to submit detailed reports to confirm that no "coercive means, pressure, or allurement" were used. In Mumbai, the SEC is even reviewing CCTV footage from the office of the Returning Officer in Ward A following allegations of interference.


NOTA Demand

Beyond the political parties, civic activists and the Aam Aadmi Party (AAP) have raised a technical but crucial point: the status of the NOTA (None of the Above) button. They argue that even if there is only one candidate, the election should proceed to allow voters to choose NOTA. If NOTA receives more votes than the lone candidate, they propose that a re-election should be mandatory to ensure true democratic representation.

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