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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 )

From Polypropylene to Polystyrene: Decoding Plastic Codes

Not all plastics are created equal—codes 5, 6 and 7 show why some materials recycle easily, while others pose serious challenges.

In the earlier parts of this series, we examined the first set of Resin Identification Codes. Let us now continue our exploration of the remaining codes and their uses.

 

Code no. 5

This code is assigned to products made from polypropylene (PP). It is a highly versatile polymer, widely known for its durability, chemical resistance, and light weight. Polypropylene is commonly used in food containers and textiles, as well as in automotive parts and medical devices. When exposed to high temperatures, it melts rather than burns; hence, it is classified as a thermoplastic.


PP is easily mouldable and recyclable, and it offers an excellent strength-to-weight ratio. These properties make it an ideal raw material across many industries. In fact, it is the most commonly used thermoplastic in the world. It is extensively used in medical devices such as syringes, medical vials, petri dishes, pill containers, and specimen bottles.


Polypropylene is particularly well-suited to applications that require repeated bending and manipulation without breaking. Examples include hinges on medication pots, lids or caps on shampoo bottles, and various types of plastic bottles and containers. Beyond packaging, PP is also used to manufacture ropes, twine, tape, carpets, upholstery, clothing, and camping equipment. Its waterproof properties make it especially effective for use in the marine sector.


Although polypropylene is recyclable, there are certain limitations. Rigid items, such as containers and bottle caps, are easily accepted for recycling, whereas flexible films made from PP are more difficult to recycle.


Code no. 6

This code is assigned to products made from polystyrene (PS). Polystyrene is a hard and brittle plastic that may be transparent or opaque. It is available in three distinct forms, each used for different applications.


The first type is GPPS (General Purpose Polystyrene). This form is commonly used for disposable items such as cups, cutlery, and food trays. It is also used in rigid packaging, cosmetic boxes, toys, lighting diffusers, and laboratory ware.


The second type is High Impact Polystyrene (HIPS), which is modified to improve toughness and impact resistance. HIPS is widely used in packaging, retail displays, and signage, as well as in consumer electronics, including housings for televisions, computers, and toys. It also finds applications in automotive interiors, such as trims and panels.


The third type is Expanded Polystyrene (EPS). This form is hard and brittle yet extremely lightweight and is more commonly known as 'styrofoam' or 'thermocol'. EPS is generally used as moulded foam packaging for televisions, computers, household appliances, and other fragile goods. It is also commonly found in trays used for meat, fish, and similar products, as well as in egg cartons. In addition, EPS is used to make disposable items such as cups, plates, bowls, lids, and cutlery, and it is also used as an insulating liner in refrigerators and air conditioners.


Technically, polystyrene is 100% recyclable. However, because it is lightweight, bulky, and often contaminated with food residue, recycling it is not economically viable in many regions. The process requires specialised facilities and handling systems, which are not widely available.

 

Code no. 7

This code is assigned to plastics that do not fall under any of the six categories discussed earlier. It generally includes a broad group labelled as “other” plastics, such as polycarbonates (PC), acrylic, nylon, multilayered composite plastics used in sachets or pouches, and fibreglass composites used in automotive parts, industrial containers, and similar applications.


Polycarbonates are commonly used in products that require strength and impact resistance, such as safety goggles and reusable water bottles. Acrylic, also known as Plexiglas, has a wide range of applications and is frequently used in light fixtures, display units, and packaging windows. Nylon is valued for its strength and flexibility and is typically used in products such as toothbrush bristles, gears, and other mechanical components.


Because of their complex and mixed compositions, plastics classified under Code 7 are generally not recyclable.


Will continue in the next week. Till then, have a nice weekend!

 

(The author is an environmentalist. Views personal.)


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