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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 )

Fatal Friendships: The U.S., Ukraine and the Limits of American Loyalty

Updated: Mar 4, 2025

The unsavoury diplomatic row between Zelenskyy and Trump was a reminder for the world that U.S. foreign policy remains as transactional as ever.

Zelenskyy and Trump

Henry Kissinger once remarked that being America’s enemy is dangerous, but being its friend is fatal. Ukraine, like so many before it, is learning this the hard way.


If there is a moment that encapsulates the fickleness of American foreign policy, it is the latest diplomatic spat between President Trump, Vice President J.D. Vance and Ukrainian President Volodymyr Zelenskyy during the latter’s visit to the Oval Office. The once-celebrated wartime leader, who was paraded across Washington as a symbol of democratic resilience, now finds himself cast aside like so many other American allies before him. The drama played out in full view of the world, with Trump and Vance publicly dressing down Zelenskyy, demanding gratitude, and pressing for long-term access to Ukraine’s natural resources in exchange for continued support. For Zelenskyy, this was a humiliating moment; for the world, it was a reminder that U.S. foreign policy remains as transactional as ever.


To anyone familiar with American diplomacy, this episode was hardly surprising. The United States has a long history of intervening in the affairs of other nations, often in pursuit of its own strategic interests. Between the 1848 annexation of Mexico and the countless regime-change operations of the Cold War, Washington has prided itself on shaping global politics to its advantage. Now, Ukraine finds itself on the receiving end of this history, left to reckon with the harsh reality that the U.S. does not sustain friendships but exploits them.


To understand how Ukraine arrived at this precarious juncture, one must rewind to the 1990s, when the seeds of today’s conflict were sown. In 1990, as the Soviet Union crumbled, a tacit agreement was made between President George H.W. Bush and Soviet leader Mikhail Gorbachev: NATO would not expand eastward. That promise was swiftly broken. Nineteen times, the U.S. welcomed former Soviet states into NATO, tightening the noose around Russia’s sphere of influence. Moscow protested, but its grievances fell on deaf ears until Ukraine became the next domino.


By 2014, tensions boiled over. In what became known as the Revolution of Dignity, Ukraine’s pro-Russian president, Viktor Yanukovych, was ousted in a U.S.-backed uprising. Western leaders celebrated this as a victory for democracy, but to Moscow, it was yet another American betrayal. Russia responded by annexing Crimea, an act widely condemned but entirely predictable. What followed was a drawn-out war in Ukraine’s eastern provinces, with separatist groups in Donetsk and Luhansk declaring independence - moves backed by the Kremlin.


Even then, there remained a narrow path to peace. Russia had no objections to Ukraine joining the European Economic Community; its red line was NATO membership. A grand diplomatic bargain was possible, one in which Ukraine could integrate with the West economically while remaining militarily neutral. But American policymakers, eager to consolidate Ukraine as a client state, rejected such an approach. They doubled down on military aid and encouraged Zelenskyy to pursue NATO ambitions, despite Russia’s clear warnings that this would provoke war.


By 2022, the inevitable happened: Russia invaded Ukraine. Washington responded with sanctions, weapons shipments, and financial aid packages that, while substantial, were not entirely altruistic. The U.S. supplied Ukraine with arms, but these weapons were purchased from American manufacturers, ensuring billions of dollars flowed back into the U.S. economy. The Biden administration painted its support as a moral crusade, yet in reality, it was a profitable venture wrapped in the language of democracy.


Enter Trump, back in the White House, bringing his characteristic disdain for multilateralism. While Biden had embraced Ukraine as a moral cause, Trump sees it as a business transaction. Zelenskyy’s recent visit to Washington underscored this shift. Far from being welcomed as a heroic figure, he was reprimanded like an ungrateful client. Trump and Vance not only questioned the extent of U.S. aid citing a wildly inflated figure of $300 billion, when in reality, the Kiel Institute places it at $119.7 billion but also demanded that Ukraine reward American generosity with long-term contracts granting U.S. firms access to its valuable mineral resources.


For Zelenskyy, the humiliation was complete when the U.S. refused to offer Ukraine any security guarantees. The man who once stood before Congress to thunderous applause was now walking away from meetings empty-handed. If there was any lingering doubt about the transactional nature of America’s commitment, it had been dispelled.


Predictably, this diplomatic fiasco has deepened divisions within the Western alliance. European leaders, already sceptical of Trump’s foreign policy instincts, have openly criticized the U.S. for its heavy-handed treatment of Ukraine. Meanwhile, Russia is watching closely, sensing an opportunity to exploit the cracks in Western unity. Moscow does not need to defeat Ukraine on the battlefield if it can win the war by eroding international support for Kyiv.


Ukraine’s predicament raises a larger question: What does it mean to be America’s ally in the 21st century? The answer, it seems, is that alliances with Washington come with an expiration date. Today, Ukraine faces the same fate as past U.S. partners - betrayed, abandoned and left to navigate a crisis alone.


Perhaps Zelenskyy should have taken Kissinger’s warning to heart: America’s enemies may suffer, but its friends are doomed.


(The author is a retired naval aviation officer and geo-political analyst.

Views personal.)

1 Comment


srikant.deshmukh
Mar 04, 2025

The Perfect Voice is an excellent daily, which is pleasure to read because of its layout, news coverage and focus on current global events. Kindly keep up the good work. Best wishes. Srikant Deshmukh

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