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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 )

Progressive Paradox

Updated: Nov 12, 2024

As Chief Justice D.Y. Chandrachud steps down, India bids farewell to a tenure marked by both fervent praise and pointed criticism. In the annals of the SC, few Chief Justices have captured the public imagination quite like Chandrachud, who emerged as both a judicial maverick and a figure ensnared in the contradictions of his own making. His legacy is a tableau of high-minded ideals clashing with the unrelenting weight of realpolitik and public perception.


His judgments often reflected an intent to advance the ideals of a modern democracy. From championing civil liberties and LGBTQ+ rights to affirming women’s autonomy through rulings that decriminalized adultery and supported equal abortion rights, Chandrachud projected himself as an arbiter of progressive constitutionalism. His vocal stance that dissent was the “safety valve of democracy” underscored an effort to restore faith in a judiciary tarnished by perceived inaction.


Yet, irony loomed large over his tenure. To Indian progressives, who initially lauded him as a ‘darling’ for his liberal judgments, the honeymoon was short-lived. The glow began to dim when Chandrachud was pictured participating in religious ceremonies that blurred the line between private devotion and public duty. The most notable instances were PM Narendra Modi’s visit to his home for Ganesh Puja and Chandrachud’s own pilgrimage to temples in Gujarat. Ironically, ‘liberals’ who once viewed him as a symbol of resistance against a majoritarian government now fiercely accused him of sacrificing judicial independence for the sake of congeniality.


The Chief Justice’s complex position was evident in his handling of high-stakes cases with implications for the ruling party. For instance, in the Adani-Hindenburg matter, Chandrachud’s initial faith in the Securities and Exchange Board of India’s (SEBI) investigation raised eyebrows. Critics claimed that the Court, under Chandrachud’s watch, appeared unwilling to push for deeper scrutiny.


His critics took umbrage at his photo-ops and interviews, questioning what would happen if judges began curating their own public personas with the zeal of social media influencers? They claimed that for every judgment that championed constitutional principles - such as the Puttaswamy case that established the right to privacy as intrinsic to the right to life - there was a moment where Chandrachud appeared overly accommodating to the government.


Chandrachud’s judgments on women’s rights, such as those in the ‘Indian Young Lawyers Association v. State of Kerala’ and ‘Joseph Shine v. Union of India,’ underscored his commitment to dismantling patriarchal norms. His rulings often empowered marginalized communities, infused progressive values into the legal system and reaffirmed rights that many thought had been suppressed. In the end, Justice Chandrachud’s story is emblematic of the dilemmas faced by modern jurists: the challenge of upholding constitutional values in a climate where public opinion and political realities create a high-stakes balancing act.

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