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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 )

Lotus at Maghi

A Sikh martyrdom fair in Muktsar has become the unlikely battleground for Punjab’s next political realignment.

Punjab
Punjab

The Maghi Mela at Sri Muktsar Sahib has never been a quiet affair. Every January, tens of thousands of Sikhs gather on the sacred ground where the Forty ‘Muktas,’ or warriors who returned to fight and die for Guru Gobind Singh in 1705, won spiritual liberation through sacrifice. The mela has always been heavily steeped in politics. For decades it has served as Punjab’s most unforgiving Panthak court, a place where governments are judged not just on their balance-sheets but on their fidelity to Sikh sentiment, history and honour. This time, it felt like a rehearsal for the 2027 assembly election.


What made this Maghi different was not merely the noise but the new choreography. For the first time, the Bharatiya Janata Party organised a full-fledged political conference at the mela. The Aam Aadmi Party, which used this very platform in 2016 to announce its arrival as Punjab’s insurgent force, returned after nearly a decade in power. Meanwhile, the Shiromani Akali Dal, the traditional custodian of Panthak politics, struggled to reclaim relevance. The Congress stayed away, citing an Akal Takht directive against political grandstanding on religious occasions – a move that betrayed political exhaustion.


Punjab today is weary of drugs that have hollowed out a generation, of gangsterism that mocks the rule of law, of corruption that has merely changed hands since the 2022 election. The AAP had come to power promising clean governance and dignity for farmers. Four years on, even its own critics no longer need to exaggerate. The Rs. 1,000-a-month stipend for women has vanished into the ether. Farm incomes remain hostage to uncertain procurement and delayed payments. The state’s debt has swollen.


It was this sense of drift that the BJP sought to exploit at Muktsar. Union Minister Ravneet Singh Bittu accused the AAP government of brazenly misusing state machinery while Sunil Jakhar, the BJP’s state president, struck a more strategic note, portraying AAP as a subcontractor of Delhi and the Congress as a house divided by corruption and identity politics. Nayab Singh Saini, Haryana’s BJP Chief Minister, offered a neighbour’s contrast: in BJP-ruled Haryana, he said, farmers receive minimum support prices, compensation for crop losses and timely payments that aren’t happening in Punjab.


There was also an unmistakable attempt to wrap this critique in Sikh history. The Forty Muktas and Mai Bhago were invoked not as museum pieces but as symbols of moral courage. Whether the BJP’s charges against the AAP stick is less important than the terrain they seek to occupy. In a state where political legitimacy is filtered through faith and memory, the AAP’s Delhi-first image leaves it exposed.


The Akali Dal, for its part, tried to remind Punjabis of AAP’s broken promises and alleged extravagance—thousands of crores spent on advertising, chartered planes for leaders, recruits parachuted in from outside the state. Yet its own long years in power, tainted by the same allegations of drugs, sacrilege and cronyism that now dog AAP, have dulled its edge. The Panthak vote is no longer the Akalis’ private estate.


Until recently, the BJP was a marginal force in Punjab, shackled to the Akalis and mistrusted by a Sikh electorate wary of majoritarian politics. But the split with the SAD in 2020 and the central government’s overtures have given it a chance to reintroduce itself. By staking a claim at Maghi, the BJP signalled that it wants to be the pole around which a new coalition might form.


Punjab’s politics is fragmenting as the AAP’s sheen has faded, the Akalis are diminished and the Congress is listless. In such a landscape, a party that can offer administrative competence, financial muscle from the centre and a credible respect for Sikh institutions stands to gain.


The Maghi Mela has always been about redemption after failure. Punjab, too, is searching for a way out of its present malaise. By choosing Muktsar as its stage, the BJP is betting that the road to power in 2027 runs through both Delhi and the Panth.

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