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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 )

Persian Entanglements: How Israel and Iran went from covert allies to existential enemies

In the final part of this series, we trace the forgotten Cold War alliance between Iran, Israel, and the U.S. and their lasting political fallout.


Israel and its Discontents - Part 3


A forgotten Cold War triangle between the Mossad, the SAVAK and the CIA offers uncanny echoes in today’s missile strikes and nuclear espionage.

While unthinkable today, there was a time when Iran’s generals toasted Israeli tacticians over Cognac and caviar in Tehran’s plush north-side villas. In the 1970s, the one-eyed Israeli Warhawk Moshe Dayan was venerated in Iranian military circles, and the air in the capital was thick with geopolitical calculation. Long before the chants of “Death to Israel,” Tehran was quietly colluding with Tel Aviv in a covert alliance that would reshape the region.


Before the 1979 Islamic Revolution, during the heyday of the Shah, a peculiar triangle of Israel’s Mossad, the American CIA, and SAVAK - Iran’s dreaded internal security service – had formed a clandestine alliance designed to weaponize Iran into a Cold War bulwark against Arab nationalism, Soviet influence and the rise of leftist revolution across the Middle East.


The deal was as audacious as it was secretive and ambitious. Israel, the region’s only nuclear-capable state, would share missile technology with Iran while the United States would look the other way, so long as the Soviets were kept in check.


This triangulation became known as the ‘Peripheral Alliance Strategy,’ or ‘Project Klil.’ It yoked together non-Arab states - Iran, Turkey and Ethiopia with Israel in a broad counter-Arab intelligence and military network. As Mossad’s founding chief Reuven Shiloah reportedly told President Dwight Eisenhower in 1958, “This high dam will stop the red tide.”


At the heart of this bizarre brotherhood was a plan that bordered on the fantastical: Iranian missiles powered by Israeli know-how and petrodollars. As Israeli investigative journalist Ronen Bergman recounts in his thrilling ‘The Secret War With Iran’ (2007), Mossad operative Reuven Merhav negotiated with SAVAK’s Hassan Toufanian under the codename Operation Tzor.


Israeli Defence Minister EzerWeizman offered the Shah ‘Jericho’ missiles, originally designed to carry nuclear payloads and the blueprint for Israel’s Lavi fighter jets. Iran would host the test sites while Israel would gain strategic depth and funding. It was, by then, the largest Israeli military-industrial deal ever undertaken with billions of petrodollars in play.


Yet another initiative known as Project Flower, began in 1977. It aimed to develop a surface-to-surface missile with a range of 500km - enough to hit targets from Riyadh to the Iraqi capital of Baghdad – Iran’s sworn adversary in the region. Israel Military Industries would design the hardware while Iran would build the production lines. In the short term, the project promised a deterrent. In the long run, it planted the seeds of a technological lineage that would haunt both nations.


As Iranian-Swedish academic Trita Parsi notes in his ‘Treacherous Alliance’ (2008), this Israeli-Iranian courtship was not ideological but coldly strategic. Iran, ringed by hostile Arab regimes and nervous about Soviet proximity, saw in Israel a useful partner. Israel, threatened by Arab military coalitions, saw in Iran a vital flank. What emerged was a labyrinth of military cooperation, espionage and trade, rooted in pragmatism and wrapped in secrecy with more than a fair amount of skullduggery.


The Shah’s rationale was also increasingly pessimistic about American support. With Jimmy Carter in the White House preaching human rights and rethinking support for autocrats, the Iranian monarch looked elsewhere. Israel, unconstrained by congressional hearings or moral hesitations, became a dependable partner, an ‘honourable schoolboy.’


Between 1953 and 1979, Iran had sold most of its oil to Israel and, in turn, became a major buyer of Israeli goods which ranged from tyres to dentures, as per declassified Israeli state archives.


And then came 1979. Ayatollah Khomeini’s revolution toppled the Shah. SAVAK agents were executed while Mossad networks were dismantled overnight. The missiles, blueprints and cooperative legacies vanished into sealed archives. The Islamic Republic, now vocally committed to the destruction of Israel, erased all trace of its courtship. But memory is not so easily scrubbed.


In November 1979, when Iranian students stormed the U.S. embassy in Tehran, they found rooms filled with shredded CIA documents. Iran’s new rulers then pulled off a miracle. A group of 250 devout women, known as the ‘Puzzle Committee,’ set about reconstructing the shredded papers by hand. By the end of their labours, they had assembled a treasure trove of espionage secrets detailing clandestine dealings between the Mossad, the CIA and the SAVAK.


As Bergman details in his book, this effort led to the publication of ‘Asnad-e Laneh-ye Jasusi-e Amrika’ (Documents from the U.S. Espionage Den) which ran into 80 volumes. Among the revelations were surveillance logs of Khomeini’s exile, the CIA’s recruitment techniques, and blueprints for crushing leftist movements.


If that scene seemed cinematic, it would find its mirror image decades later when Iran and Israel would be locked (as they are now) in a death grapple.


In 2018, Israeli Mossad agents, in yet another of their breathtakingly audacious operations, raided a Tehran warehouse, hauling out 50,000 pages and 163 discs from Iran’s nuclear archive. The vault was breached in under seven hours using custom torches and vault-crackers. The mission, chronicled in the 2023 book ‘Target Tehran’ by Yonah Bob and IlanEvyata, exposed the AMAD project - the covert Iranian programme for nuclear weapons development which was suspected by Israel to have continued long after Tehran had promised peaceful intent. (A photo showing the presence of this book in Netanyahu’s underground war room is now doing the rounds)


Among the files retrieved were diagrams and missile plans hauntingly similar to those from Project Flower.


In a supreme irony of history, what Israel had helped Iran build in the 1970s, it was now working to dismantle by cyber sabotage, diplomatic coercion and finally, direct military strikes in form of Operation Rising Lion.


This strange symmetry came full circle on June 22 after the U.S. B-2 bombers flattened key Iranian nuclear sites in Fordow, Natanz and Isfahan using GBU-57 bunker-buster bombs. The intelligence for these missions had, in part, originated from Mossad’s 2018 haul.


The entanglements between the clandestine services of these three countries run still deeper. Israeli intermediaries were central to brokering the initial arms deals between the U.S. and Iran during the infamous Iran-Contra affair of 1985-86, which involved a secret sale of arms to Iran, despite a US embargo, in exchange for the release of American hostages and the diversion of proceeds to fund the Contra rebels in Nicaragua.


In 1985, Manucher Ghorbanifar, an Iranian arms dealer and former SAVAK agent had approached Israeli officials with a proposal that in exchange for Western arms, Iran would help secure the release of American hostages held by Hezbollah in Lebanon.


David Kimche, then director-general of Israel’s Foreign Ministry and a former Mossad deputy, was among the key Israeli intermediaries. He coordinated between the U.S. National Security Council (under Oliver North) and Israeli arms manufacturers.


Yaakov Nimrodi, a well-connected Israeli arms broker who had been the IDF’s military attaché in Tehran under the Shah, also played a role. He had deep personal contacts within Iran’s post-revolutionary military apparatus. The first shipment of TOW anti-tank missiles in August 1985 was transferred to Iran via Israel. In return, one American hostage was released.


The U.S. would thus funnel arms via Israel, who would ‘launder’ the operation to avoid public scrutiny. Later, the scandal ballooned as funds from the Iran arms sales were illegally diverted to Nicaraguan Contras.


For a country whose founding narrative rests on existential threat, Israel’s long entwinement with Iran is an awkward inheritance. That it once considered selling Iran its prized Lavi fighter jet programme, the crown jewel of Israeli aviation, strains credulity today. At the same time, it also underscores the extraordinary contingency of Middle Eastern alliances.


In 330 BCE, Alexander the Great had torched Persepolis, the ceremonial capital of the Persian Achaemenid Empire. Some say it was an accident. Others insist it was deliberate. Either way, an empire built on splendour and secrecy collapsed into ash. Today, the Islamic Republic, born in fire, sustained by secrecy, finds its prized nuclear facilities once again reduced to rubble. Only this time, the flames are not accidental.

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