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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 )

Navigating Empire: Jane Austen’s Sailor Brothers in the Far East

Updated: Dec 23, 2024

Jane Austen’s Sailor Brothers

The year was 1810, the place was Canton - a city on the edge of Qing Dynasty China, where trade and tension often mingled in precarious balance. Captain Francis Austen, commanding the Royal Navy’s St Albans, found himself in an unenviable position. The charges were serious: three British sailors, perhaps from the East India Company’s Royal Charlotte, had allegedly ventured ashore, sparking a violent altercation with the local Chinese. In the aftermath, a shoemaker named Hoan a Xing lay dead, his life claimed by a knife’s edge. The Chinese authorities, unyielding in their demands, insisted that the culprits be handed over before they would allow the East India fleet to depart. Yet Austen’s dilemma was far from simple. The fleet’s departure could not be delayed—costs would mount, and the monsoon loomed, a looming menace to their journey home. But sailing without Chinese consent was a gamble that could imperil not just this voyage, but the future of Britain’s trade with China itself.


With no one more senior to turn to, at the far reaches of the expanding British Empire, responsibility lay heavy across the shoulders of Royal Navy captains – not just for naval concerns but also for matters of high diplomacy and trade. As it was, Francis Austen was a remarkable man, extremely talented and able, destined by the end of his stellar career to be knighted and promoted to Admiral of the Fleet, the highest rank of the Royal Navy.


But he was not an easy man to serve under. A devout Evangelical, reserved, and severe in his private life, he was a strict disciplinarian and commanded what was known, sarcastically, as a ‘praying ship’ – though any criticism of him should perhaps be tempered somewhat by the violent and gruelling times through which he lived. He was also a somewhat disappointed man, having commanded the 84-gun Canopus back in 1805 when, just prior to the Battle of Trafalgar, it had been detached from Nelson’s fleet to pick up supplies, thereby narrowly missing the famous action as well as all the fame and wealth that would have resulted from it – if he had survived, that is.


He had a younger brother also in the service, who would also enjoy an extraordinary career, rising to the rank of Rear Admiral. But Charles Austen, though just as religious as his elder brother, was a very different sort of man: warm, easy-going, and blessed with a natural charm. His crews adored him. In 1810, at the time of his elder brother’s diplomatic problem in Canton, Charles Austen was in command of the 74-gun Swiftsure, on the North American station, blockading American trade with Napoleonic Europe, looking out for Royal Navy deserters serving on American ships, and intercepting slave traffic between the British West Indies and the southern American states.


Both men would regularly write home. One can only imagine what it was like for their sister, in 1810 living a quiet life in a cottage in the village of Chawton, Hampshire, reading letters from her brothers sent from the farthest ends of the world. In two of her novels, Mansfield Park and Persuasion, she, Jane Austen, would feature sailors strongly. But, in these novels, naval officers would be seen only in an English domestic setting. There would be no descriptions in her novels of the brutalities of life in the Royal Navy: the bloody battles, the maimed and killed, the diseases, the floggings, or indeed the drunkenness and fighting on shore that was giving Francis Austen a diplomatic headache in Canton.


Francis Austen resolved the Canton crisis by demanding credible witnesses to the killing of Hoan a Xing before any British sailors could be handed over. On February 11, 1810, he cross-examined two witnesses whose accounts were vague and contradictory. With no clear evidence linking British sailors to the crime—especially as American sailors, similarly dressed, were also in the area—Chinese officials allowed the fleet to depart, though Austen vowed to continue his investigation. The East India Company praised Francis Austen for his skill and tact.


Francis would indeed continue to investigate, discovering that three British sailors from Cumberland, another East India Company ship, had been involved in a fight with some Chinese in Canton, though they denied murder. Again, with changing stories and contradictory statements, he was unable to establish who had actually murdered Hong a Xing.


After many more adventures, Francis Austen would eventually die peacefully at home in Hampshire at the age of 91, outliving his literary sister by many years. Charles Austen, whose career was every bit as successfully eventful as that of his elder brother, would succumb to cholera at the age of 71 while leading British forces during the Second Burmese War, much to the distress of his adoring men.


By the 1920s, long after her illustrious naval brothers had been forgotten, Jane Austen would at last be recognised by scholars as a great English novelist. She would also get to see China for herself, her novel Pride and Prejudice finally being translated there in 1935.


(The author is a novelist with an abiding passion for Chinese history. Views personal.)

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