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 )

People praise Army for protecting

Jammu and Kashmir Chief Minister Omar Abdullah interacts with displaced border residents at a shelter camp.
Jammu and Kashmir Chief Minister Omar Abdullah interacts with displaced border residents at a shelter camp.

Garkhal (J&K): Men and machines of the armed forces worked meticulously to ensure the interception of Kamikaze drones and missiles fired by Pakistani troops targeting Jammu, drawing widespread appreciation from people.


India on Thursday night swiftly thwarted Pakistan's fresh attempts to strike military sites with drones and missiles, including in Jammu and Pathankot, after foiling similar bids at 15 locations across the country's northern and western regions, amid a military conflict between the two neighbours.


Looking after the operational area of Jammu under the command of the 9 Corps, the 26 Infantry Division, nicknamed the "Tiger Division", had put in place a robust air-defence system, virtually carving out an Israel-type Iron Dome to protect Jammu from a Hamas-style attack by Pakistan.


An official who was privy to the developments said it was a meticulous combination of men and machines in defence that thwarted such a massive Pakistani attack.


In the dead of night, Pakistan unleashed its most audacious assault on Jammu since the 1971 war, deploying a swarm of more than a hundred Kamikaze drones and missiles in a sinister attempt to devastate the city. But what followed was a show of unmatched precision, courage and resilience.


"We are indebted to our armed forces who have saved Jammu from a major attack by Pakistan. We appreciate them for their missionary work. We never thought these bombs could be neutralised in the air," Garkhal resident Sikender Singh said.


Singh, whose family, along with more than 500 villagers, has shifted to safer camps set up by the government in Mishriwala on the Jammu outskirts, said had the bombs not been intercepted, they could have caused massive deaths and destruction.


Finest system

The Army, backed by one of the world's finest air-defence systems, intercepted the aerial barrage with astonishing accuracy -- virtually every hostile object was destroyed mid-air. Not a single vital installation was touched. Not a single civilian life was lost.


"Eight missiles from Pakistan were directed at Satwari, Samba, R S Pura and Arnia. All were intercepted and blocked by air-defence units. Visuals over Jammu reminded exactly of a Hamas-style attack on Israel, like multiple cheap rockets," an Army official said.


He said the Pakistan Army is operating and behaving like Hamas. "Drones were sighted at multiple places along the western front -- confirmed to be hostile. They are being effectively engaged by our air-defence systems. Pakistani drone attacks have been reported at various locations along the western borders and are being effectively countered by the Indian armed forces," he added.


The multi-tier air-defence system, with a twin technological security architecture of Russian and Israeli surface-to-air missile setups and the indigenous Akash, was a game changer against such attacks.


Former Jammu and Kashmir director general of police S P Vaid appreciated the armed forces and their technological security systems for effectively dealing with the Pakistani attacks.


He said 50 to 60 air attacks by Pakistan over Jammu and other places were neutralised on Thursday night by the impregnable air-defence system of the country.


Comments

bottom of page