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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 )

Maharashtra’s Relentless Power Broker

Devendra Fadnavis’ return to the centre of power shows how modern Indian politics rewards those who learn how to lose.

Love him or loathe him, Maharashtra Chief Minister Devendra Fadnavis has become impossible to ignore. In a state where political reputations are usually inherited or quietly managed by shadowy fixers, Fadnavis has successfully made himself the story. For more than a decade now, every tremor in Maharashtra’s politics, every revolt, realignment or rumour has seemed to revolve around his presence.


This marks a striking point of departure as for decades, the state’s politics had been narrated through a single prism: Sharad Pawar. Whether governments fell, alliances formed or rebellions fizzled out, the assumption was that ‘Pawar Saheb’ (as he is respectfully known) was the invisible hand behind any upheaval. Even those who disliked him conceded his reach. The state was less a political arena than a chessboard on which only one player truly mattered.


New Narrative

But Fadnavis’ arrival as Chief Minister in 2014 punctured that narrative. He did not fit the stereotype of a Maharashtra strongman. He was young, unshowy, soft-spoken and widely regarded as a technocrat. Many in Mumbai’s political salons assumed he would be a placeholder, a ‘polite’ face for a government ultimately run from Delhi. They were soon to be proven wrong.


Between 2014 and 2019, he governed with a confidence that surprised both admirers and critics. Infrastructure projects moved at a pace Maharashtra had not seen in years; bureaucratic bottlenecks were cleared; and the Bharatiya Janata Party (BJP), once a marginal force in large parts of the state, built a formidable organisation. Fadnavis combined a command of files with an instinct for the street. Party workers began calling him ‘Deva Bhau,’ a term that conveyed both affection and authority. He was not merely the BJP’s man in Mumbai; he was becoming Maharashtra’s own.


However, in 2019, after a bruising election, Fadnavis lost the Chief Minister’s chair to Uddhav Thackeray, who stitched together an improbable alliance with Pawar’s Nationalist Congress Party and the Congress. For the first time since 2014, Fadnavis was on the outside. Many in the state’s political class, and not a few within his own party, concluded that his moment had passed.


They were to be proven wrong once again. The two and a half years that Fadnavis spent as Leader of the Opposition (LoP) were a political apprenticeship in adversity. He travelled relentlessly, kept BJP cadres energised and used the Assembly floor to harry a government that was often more united by its dislike of him than by any shared programme. He learned how to fight without the levers of power and, crucially, to be patient.


When the Thackeray-led MVA coalition eventually unravelled, Fadnavis returned not as a chastened survivor but as a sharper, more seasoned operator. He had discovered that in India’s increasingly transactional politics, patience can be as potent as patronage.


That education is now on display as Maharashtra heads into a crucial round of municipal-corporation elections. These contests, far from being parochial, are in the machinery rooms of Indian politics. Control of the cities translates into control of contracts, of cadres and cash. Accordingly, Fadnavis he is criss-crossing the state, holding rallies, chairing strategy meetings and micromanaging candidate lists. In some places he campaigns alongside uneasy allies; in others he faces them across the barricades.


Unperturbed Player

What is striking is how little he seems distracted by the noise. Speculation about a reunion of the Thackeray brothers - an idea that has set television studios ablaze – has barely registered in his public utterances. His speeches are dry, even technocratic, dealing with poll nitty-gritties like roads, water supply, sanitation and good governance. He talks less about ideology than about drains. It is a curious strategy in a political culture addicted to theatrics, but it plays to his strengths as Fadnavis has always preferred competence to charisma.


Not everyone in the BJP is pleased. There is a quiet, persistent murmur from a small faction that would like to see him stumble, especially in these municipal battles. But Fadnavis’ grip on the party organisation, his rapport with the BJP’s central leadership and his standing among the rank and file make him a difficult man to undercut. More importantly, he looks unruffled. That, in politics, is often the most unnerving signal of all.


While to dub him the ‘king’ of Maharashtra politics would perhaps be a stretch, yet he has achieved something almost as formidable: he has made himself indispensable to every conversation about power. He understands that modern politics is not just about winning elections but about managing narratives, cultivating networks and, above all, timing one’s moves. He knows when to speak and when to fall silent, when to strike and when to let others overreach.


Maharashtra is entering another volatile phase, with alliances fraying and old families reasserting themselves. Yet through the churn, Fadnavis remains fixed at the centre. Whether voters reward him this time will depend on factors beyond his control. But one thing is already clear. In a state long accustomed to being run from the shadows, Devendra Fadnavis has dragged politics into the open and made himself its most compelling protagonist.


(The writer is a political observer. Views personal.)

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