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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 )

Faltering Trajectory

India’s Polar Satellite Launch Vehicle has long been treated as a model of quiet reliability. However, that reputation is now under strain after the PSLV-C62, carrying 16 satellites, experienced a deviation during its third stage of flight shortly after lifting off from Sriharikota. ISRO confirmed that the rocket did not proceed along its expected trajectory, though it has stopped short of declaring the mission a failure.


In most launch vehicles, the third stage is where a mission is effectively decided. A problem at this point rarely allows a satellite to reach its intended orbit. That was the case last year when the only PSLV flight of the year failed at precisely this phase. The repetition of the same problem a year later is therefore difficult to dismiss as coincidence. PSLV-C62 was meant to mark the vehicle’s return to service after that setback. Instead, it has reopened questions that ISRO never fully answered.


For decades the PSLV has been the backbone of India’s space programme. It has lofted lunar probes, interplanetary missions and hundreds of commercial satellites, giving India a reputation for affordable and dependable access to orbit. With only four failures in its first 63 launches, the vehicle came to symbolise ISRO’s understated competence. The fifth failure, if confirmed, would not in itself be catastrophic. But two consecutive breakdowns in the same stage of flight suggest something more troubling than statistical bad luck.


After the 2025 failure, ISRO followed standard procedure by appointing a failure-analysis committee. What it did not do was publish the committee’s findings. The engineering community, satellite customers and even parts of India’s own space ecosystem were left in the dark about what went wrong and how it was fixed. When a launch vehicle flies again without such clarity, it asks its users to trust that the problem has been solved. PSLV-C62 now casts doubt on that assumption.


The implications stretch far beyond ISRO’s own laboratories. This flight carried satellites from Brazil, Nepal and Britain, all of whom entrusted Indian hardware with their orbital ambitions. It also carried seven satellites belonging to Dhruva Space, a Hyderabad-based start-up that represents the new private face of India’s space sector.


The Indian government has made commercial space a strategic priority. It has opened satellite manufacturing, data services and even rocket production to private players, hoping to replicate in orbit the start-up energy that transformed its software industry. The PSLV sits at the centre of this plan. It is the rocket that most Indian firms expect to use, and the one foreign customers already recognise.


Repeated third-stage anomalies undermine that confidence. ISRO has earned enormous goodwill through decades of frugal innovation. It remains a technically formidable organisation. But as India seeks to become a commercial space power, its national agency must behave like one.


If India wants the world to keep betting on the PSLV, ISRO will need to offer something more than reassurance. It will need to offer answers.

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