top of page

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 )

Musk vs Trump: Clash of the Titans

Once political allies, America’s most mercurial mogul and its most polarising politician are now locked in a love-hate spiral, with grave implications for power, policy and perception.

For a while, they were the odd couple reshaping America. One was the real-estate tycoon-turned-president who thumbed his way to populist power; the other, the self-anointed techno-king who electrified everything from cars to rockets to online discourse. Donald Trump and Elon Musk once shared more than just a disdain for conventional elites. They also shared a mutual admiration, a love of provocation, and, crucially, overlapping political ambitions.


But now, the ‘bromance’ has curdled. What began as a difference of opinion has now escalated into a full-fledged public feud. The spat, more than two egos in collision, exposes deeper tensions within the Republican movement, the fragility of political alliances built on opportunism and the growing power (and peril) of billionaire influence in democratic politics.


Until recently, Musk appeared to be securely ensconced in the crest of Trumpian populism. He had opposed COVID lockdowns, voiced support for free speech absolutism (especially after acquiring Twitter, now X), and most consequentially backing Trump for his second presidency last year. His sway among Silicon Valley libertarians and suburban contrarians gave Trump another channel into tech-savvy conservative circles.


What brought the rift into sharper focus was Trump’s recent campaign rhetoric on tariffs. In May, he proposed a blanket 10 percent tariff on all imports, rising to 60 percent on goods from China.


For Musk, who manufactures Teslas in Shanghai and relies on global supply chains, this spells trouble. “A 60 percent tariff would hurt the average American,” Musk posted on X. Trump’s team brushed off the criticism, accusing Musk of caring more about profits than patriotism.


The President has also taken aim at electric vehicle (EV) subsidies, hinting that he would scrap Biden’s green energy incentives from which Tesla, Musk’s flagship, heavily benefits from.


The Trump-Musk fallout also highlights a growing conundrum in American politics of how to handle billionaires who act like political parties unto themselves. Musk, with his nearly unmoderated influence over X, has become a singular force in political discourse. His posts can tank stocks, shape narratives or ignite international rows.


His critics argue that he is too erratic, veering from libertarianism to petulant authoritarianism. But for many on the right, he remains a symbol of resistance against woke capital and a mogul who dares to bite the hand of liberal elites. That’s precisely what made him valuable to Trump.


Now that the alliance has fractured, Republicans find themselves in an awkward spot. Some conservative donors still court Musk. Others worry he is too mercurial to rely on.


The wider danger is that the feud turns transactional governance into vengeance-driven policy. Trump has long blended the personal with the political, viewing loyalty as a currency. Musk, too, is not above using his companies and platforms as weapons.


However, when all is said and done, there are signs a chance this row will fizzle out. After all, both men are masters of performance and understand the value of public spectacle. Some insiders say the feud is more about theatre than substance.


In fact, just last week, Musk was baying for Trump’s impeachment. This week, he’s back to waving flags, reposting administration talking points, and digitally embracing Trump’s top lieutenants. In the space of mere days, the erratic courtship between America’s most powerful political figure and its most influential businessman has ricocheted from public recrimination to cautious reconciliation.


The latest turn in this tumultuous relationship came amid rising tensions in Los Angeles. Immigration and Customs Enforcement (ICE) officers launched a series of controversial raids in the city, prompting widespread protests and sporadic violence. President Trump, in characteristically tough rhetoric, condemned the unrest and took aim at Democratic leaders in California.


Elon Musk, who has long supported hardline immigration policies, found a familiar ideological foothold. Having spent the early part of the week accusing Trump of being linked to the crimes of Jeffrey Epstein, and calling for his impeachment on X (formerly Twitter), Musk promptly deleted those posts over the weekend. In their place came a flurry of retweets and flag emojis echoing White House messaging.


He reposted a Truth Social statement from Trump calling on California Governor Gavin Newsom and Los Angeles Mayor Karen Bass to apologise to residents. Musk even re-followed Stephen Miller, Trump’s hawkish immigration adviser, whom he had unfollowed just days earlier.


Despite the softening of tone, Musk remains sceptical of Trump’s domestic policy. He continues to oppose the president’s sweeping “One, Big, Beautiful Bill,” a legislative Frankenstein that combines tax cuts, infrastructure pledges and defence outlays with a few populist sops to the cultural right.


One thing the conflict does reveal how brittle modern political alliances have become. In a landscape dominated by personal brands and online fandoms, relationships once built on ideology are now dictated by social media algorithms, market incentives, and momentary slights. If America is to navigate a turbulent world, it must rely less on the whims of individuals. Neither Trump nor Musk should be allowed to dictate national priorities on impulse.


Trump seeks to reassert control over a party he believes he built. Musk wants to remain the unchallenged visionary of the tech-political landscape. Both claim to be acting in America’s best interest. Each man sees in the other a mirror: powerful, mercurial, self-invented. But they forget that mirrors can crack.


(The author is a researcher and expert in foreign affairs. Views personal.)

Comments

bottom of page