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 )

Pahalgam attack aftermath: Kashmiri students threatened, businesses hit as tensions rise

Updated: Apr 28, 2025



Srinagar: After the Pahalgam terror attack in Jammu and Kashmir on April 22, which killed 26 tourists, Kashmiri students across India have been facing threats, harassment, and violence.


Several incidents have been reported in different states where students were attacked, forced out of hostels, called terrorists, and warned to leave immediately or face consequences.


At Arni University in Himachal Pradesh, hostel doors were broken by outsiders who abused Kashmiri students. In Dehradun, Uttarakhand, a Hindu Raksha Dal video went viral, warning Kashmiris to leave or be killed, forcing many students to pack up and flee.


In Derabassi, Punjab, attackers entered a hostel after midnight, tore students’ clothes, and injured a student with a sharp weapon. In Uttar Pradesh's Prayagraj, some landlords asked Kashmiri tenants to vacate their homes. The Jammu and Kashmir Students Association (JKSA) has called these attacks a targeted hate campaign.


Its convenor, Nasir Khuehami, said this is a planned move to harass Kashmiris and is not just a reaction to the terror attack. He appealed to state governments and national leaders to act quickly and ensure the safety of Kashmiri students. Students have been advised to stay indoors, avoid political arguments, and not post anything sensitive on social media. Police in Dehradun have increased patrolling and removed over two dozen social media posts that promoted violence.


The situation between India and Pakistan has also worsened after the attack. India has accused Pakistan of sheltering terrorists behind the attack and suspended several agreements, including the Indus Waters Treaty. Visa services have been cancelled, diplomatic ties have been downgraded, and cross-border trade has been stopped. Pakistan has also retaliated by closing its airspace, halting trade with India, and cutting diplomatic contacts. Both countries are in a tense standoff, and peace talks have completely broken down.


The tension is badly hitting Kashmiri businesses, especially in tourism and trade. Tour bookings to Kashmir are being cancelled, handicraft orders have been put on hold, and many goods are stuck due to the shutdown of trade routes. According to local businessmen, they are suffering huge losses and fear that the situation could get worse in the coming weeks. Meanwhile, security forces have launched large-scale operations against terrorists in Kashmir.


Army and police units have stepped up search operations across southern districts like Anantnag, Shopian, and Pulwama. The army has increased its presence in sensitive areas to prevent further attacks. Officials say they are working to dismantle the network behind the Pahalgam attack and prevent any future strikes.


Chief Minister Omar Abdullah and former chief minister Mehbooba Mufti have condemned both the terror attack and the violence against Kashmiri students. They have urged the government of India to ensure that innocent Kashmiris are not punished for the acts of a few. Political leaders and student groups are also appealing to citizens to maintain peace and not fall for hate propaganda being spread online. The situation remains tense but under close watch. Both sides, however, remain on high alert.

Comments

bottom of page