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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 )

New icon of party loyalty amid world of turncoats

Mumbai: In the competitive landscape of Mumbai’s municipal politics, Akshata Tendulkar has emerged as a symbol of ideological steadfastness and party loyalty. Known as a “staunch Hindutva voice” in the Mahim-Dadar belt, she has navigated a political terrain historically dominated by regional heavyweights like the Shiv Sena (UBT) and the Maharashtra Navnirman Sena (MNS).


The Mahim-Dadar area has long been the ideological heart of Mumbai’s politics. For a BJP leader to carve out a niche as a prominent proponent of Hindutva in this specific geography is a significant feat. Tendulkar’s rise is attributed to her vocal and uncompromising stance on cultural and religious identity, which has resonated with a traditional voter base that feels a deep connection to the Hindutva narrative.


In an era where political affiliations are often fluid, Tendulkar’s career reached a defining moment during the seat-sharing negotiations of the Mahayuti alliance. When her preferred ward was allocated to the Shiv Sena (Eknath Shinde faction) as part of the coalition agreement, she faced a difficult choice: switch banners to stay in the race or stand down.


Striking Aspect

The most striking aspect of Tendulkar’s profile is her refusal to compromise on her political identity for the sake of an electoral ticket. Recognizing her local influence and the strength of her “Hindutva voice,” the Shiv Sena reportedly offered her a ticket to contest the election under their “bow and arrow” symbol.


While many politicians today—often referred to as “turncoats”—regularly cross party-lines to secure power, Tendulkar chose a different path. She famously declined the offer, insisting that she remained committed to the Bharatiya Janata Party (BJP); that she would only contest as a candidate representing the party she had served and that her loyalty to the organisation outweighed her personal ambition for office.


Rare Precedent

“This is a very rare example of party loyalty in today’s times. I’m happy that such examples can be found only in the BJP,” said city BJP spokesperson Niranjan Shetty. He also highlighted that by choosing to withdraw from the race rather than abandon her party’s flag, Tendulkar set a rare precedent in contemporary Maharashtra politics. Her decision reinforced her image as a leader driven by conviction rather than opportunism.


“She has earned the leadership by her fearless acts and uncompromising nature when it comes to issues related to Hindutva,” said senior RSS worker from Dadar area, Ramesh Deole. “Her decision today will be remembered for times to come,” he added.


While it might be a ‘Political Harakiri’ in opinion of a few political analysts. But, with her act today she has actually given herself a larger identity. Today, she is viewed not just as a local leader from Ward 192, but as a “distinct example of loyalty.” Her background as a fierce advocate for Hindutva remains her calling card, making her a critical asset for the BJP in the heart of Mumbai. In a city where political winds shift rapidly, Akshata Tendulkar stands as a reminder of the power of ideological consistency.


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