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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 )

Office market posts record leasing

Mumbai: India’s office real estate market delivered its strongest-ever performance in 2025, with gross leasing touching an all-time high of 86.4 million sq ft, marking a 20 per cent year-on-year growth, according to Knight Frank India’s India Real Estate – Office and Residential Market (H2 2025) report. The year not only surpassed the previous peak recorded in 2024 but also stood 43 per cent higher than pre-pandemic levels of 2019, underscoring the structural strengthening of occupier demand across major cities.


The surge was broad-based, with five of the eight tracked markets crossing the 10 million sq ft annual leasing threshold, reflecting the growing depth and geographic diversification of India’s office ecosystem. Bengaluru retained its leadership position, registering a historic 28.7 million sq ft of leasing—its highest ever—driven largely by global technology firms and Global Capability Centres (GCCs). Hyderabad, NCR, Pune and Chennai also recorded their best or near-best annual performances, while Mumbai narrowly missed the 10 million sq ft mark.


Leasing momentum remained robust throughout the year. H2 2025 accounted for 37.5 million sq ft, second only to the exceptionally strong first half, indicating sustained occupier confidence and long-term commitment to Indian office assets. This resilience came despite global economic uncertainty, reinforcing India’s standing as a preferred destination for corporate expansion.


Global Capability Centres

A defining feature of 2025 was the dominance of Global Capability Centres, which emerged as the largest occupier segment. GCCs accounted for 38 per cent of total leasing, or nearly 32 million sq ft, consolidating India’s position as a global hub for research, development and high-value services. Bengaluru alone captured almost half of total GCC absorption, followed by Hyderabad and Chennai, highlighting the concentration of advanced talent pools in these cities.


Other demand drivers also showed strong recovery. Third-party IT services leasing nearly doubled year-on-year, reaching over 15 million sq ft, supported by accelerating adoption of artificial intelligence and digital transformation across global enterprises. Flexible workspace operators recorded their highest-ever absorption, with close to 19 million sq ft leased, reflecting occupiers’ preference for scalable and managed workplace solutions amid evolving work strategies.


While demand surged, new office completions lagged, rising a more modest 9% year-on-year to 54.8 million sq ft. Bengaluru and Pune together accounted for more than half of new supply additions. The supply-demand mismatch kept vacancy levels in check and strengthened landlords’ pricing power, resulting in rental growth across all major markets.


Commenting on the performance, Knight Frank India Chairman and Managing Director Shishir Baijal said the 2025 cycle represented more than a numerical high, pointing instead to a “structural shift” in how global and domestic enterprises view India as a long-term business destination. The fact that multiple large markets simultaneously touched historic peaks, he noted, highlights the maturity and resilience of the country’s office ecosystem.

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