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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 )

India seeks to strengthen economic, cultural relations at SCO

Updated: Oct 22, 2024

SCO

Islamabad: India’s External Affairs Minister S. Jaishankar is scheduled to visit Pakistan on Tuesday to attend the Shanghai Cooperation Organisation (SCO) Heads of Government (HoG) meeting. This visit, the first by an Indian foreign minister to Pakistan since the late Sushma Swaraj's visit in 2015, comes at a time of frosty bilateral relations between the two nuclear-armed neighbours. While no formal bilateral meetings between India and Pakistan are planned during this visit, Jaishankar’s presence at the summit highlights the importance of multilateral diplomacy, regional security, and India’s strategic interests within the SCO framework.


This visit also plays a key role in India’s broader foreign policy, as the country navigates its complex relationships within Asia, particularly with China and Pakistan. At the same time, India continues to balance its role in both Eastern and Western-led global initiatives. Jaishankar's presence in Islamabad extends beyond mere optics; it reflects India’s ambitions to strengthen its influence in Central Asia, improve regional security, and leverage multilateral platforms like the SCO to further its national interests.


This diplomatic visit is significant due to the longstanding tensions between India and Pakistan, which have been strained by cross-border terrorism, territorial disputes, and a lack of direct engagement in recent years. India has maintained that it will not engage in bilateral talks with Pakistan until cross-border terrorism is addressed. The absence of formal talks during this visit reaffirms India's stance while demonstrating its commitment to multilateral diplomacy.


India views the SCO as an important platform for engagement with Central Asian countries, strengthening its counterterrorism efforts, and securing energy supplies. Founded in 2001 by China, Russia, and four Central Asian nations, the SCO has evolved from a regional security forum into a broader organization focusing on issues like counterterrorism, trade, and economic cooperation. India and Pakistan became full members in 2017, adding a new layer of complexity to the organization’s internal dynamics.


For India, Central Asia holds strategic importance due to its rich natural resources, including oil, gas, and uranium. These resources are vital for India's energy security, as the country imports over 85 per cent of its energy needs. Central Asia's reserves offer an opportunity for India to diversify its energy supply, reducing its dependence on the volatile Middle East. Kazakhstan, the world’s largest producer of uranium, is particularly critical to India’s civilian nuclear program, while Turkmenistan’s vast natural gas reserves can help meet India's growing energy demands.


India’s participation in the SCO aligns with its broader foreign policy of multi-alignment, which seeks to maintain relationships with both Eastern and Western powers. India’s active role in organizations like the SCO, BRICS, and the Quad demonstrates its ability to engage with diverse geopolitical groupings. While the Quad is often seen as an anti-China coalition focusing on the Indo-Pacific, the SCO allows India to work with China and Russia on regional issues, particularly security and counterterrorism.


This multi-alignment approach reflects India's ambition to emerge as a global leader, capable of balancing different geopolitical blocs and navigating competing interests. The SCO offers India an avenue to engage with its traditional rivals while pursuing its economic and security objectives.


of the key aspects of India’s engagement with the SCO is its participation in the Regional Anti-Terrorist Structure (RATS), which focuses on counterterrorism efforts. For India, which has faced terrorism threats from its western borders, involvement in RATS is crucial for intelligence sharing, coordinating counterterrorism activities, and addressing security challenges. With the rise of extremist groups in Central Asia, particularly after the U.S. withdrawal from Afghanistan, the region’s security has become a priority for the SCO, making India’s participation even more important.


In addition to economic ties, India has sought to strengthen cultural and historical links with Central Asia, leveraging its shared Buddhist heritage to enhance diplomatic relations. Initiatives focused on traditional medicine, Buddhist sites, and agricultural cooperation highlight India’s use of soft power in its foreign policy.

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