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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 )

Muslims aghast as a Hindu dons CEO’s cap

Mumbai: Sparking intense debate and deep unease among Muslims, the Maharashtra government has appointed a non-Muslim IAS officer as the Chief Executive Officer (CEO) of the State Haj Committee (SHC), just as preparations for the annual Haj pilgrimage get underway.

 

According to official sources, Manoj Jadhav, a high-ranking IAS officer, is named the new SHC CEO, replacing Shaikh Ibrahim S. Aslam, who demitted office recently.

 

The appointment is being described by critics as unprecedented in the state’s history, even as state government officials maintain that the SHC CEO’s role is administrative in nature.

 

Unconvinced, community leaders and legal experts point out that the position carries significant religious and operational responsibilities.

 

India sends around 1.75-lakh Haj pilgrims to Saudi Arabia every year, with a substantial majority coordinated through state and central Haj committees. The CEO is directly involved in overseeing the logistics, accommodation, travel schedules, coordination with Saudi authorities, and compliance with religious requirements associated with the Holy Haj pilgrimage.

 

Former SHC Chairman (2014-2018) Alhaj Ebrahim Gulam Nabi Shaikh, said the appointment has raised serious questions over its validity. “There is no provision in either the Central or State Haj Committee Acts that explicitly allows or envisages such an appointment. It is shocking how this decision was taken without consulting all stakeholders. Beyond administration, the CEO must address several religious and community-sensitive issues. Many Muslims are genuinely worried about how this will be handled,” he told The Perfect Voice.

 

Well-known advocate Yusuf Abrahani termed the decision “blatantly illegal” and said it has caused widespread distress. “I am in touch with major Muslim organisations, community leaders, trusts, and clerics across the state. We plan to challenge this appointment in court as early as next week,” he said.

 

Abrahani further noted that the CEO is traditionally expected to travel to Mecca and Medina, engage with Haj authorities, and possess a working understanding of Haj rites, rituals, and Islamic practices.

 

“This is far from being merely an organisational job. The question is not personal competence, but institutional appropriateness and legality,” he added.

 

Muslim intellectual M. Faisal Azmi, whose father, the late Hafiz Naushad Azmi was an ex-SHC Chairman, described the development as ‘absolutely unimaginable’. “It has shaken the entire Muslim community. Senior religious leaders and legal experts are discussing various options to challenge and rectify this,” he said.

 

“This is purely a matter of faith and religious administration of the Muslim community and cannot be tinkered with casually. It must be examined whether the Haj Committee Act permits such an appointment and under what circumstances. If it does not, the decision is clearly open to legal challenge.”

SUHAIL KHANDWANI, Managing Trustee, Haji Ali Dargah & Mahim Dargah

 

“It is a matter of deep regret. Muslims are being systematically sidelined from key statutory and official bodies. Now even the Maharashtra State Haj Committee has not been spared. The motives may be questionable, but such actions will not succeed in weakening the community’s resolve.”

MAULANA MAHMOOD DARYABDI, General Secretary, All India Ulema Council

 

 


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