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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 )

Rust Beneath the Waves

While the world’s shipping fleet looks bigger than ever, its safety culture is quietly rotting and India has the most to lose.

Global shipping transports over 80 per cent of world trade, making it essential for economic stability and global supply-chain security. From oil and grain to smartphones and fertiliser, the modern economy remains lashed to steel hulls and diesel engines. The merchant fleet has never been larger as well over 100,000 vessels ply the oceans today, but it has rarely been more fragile. Behind the boom in global shipping lies a slow decay in how ships are run, repaired and crewed. And nowhere are the consequences more visible, or more dangerous, than in Indian waters.


India is not just another maritime state. It has an 11,000-kilometre coastline, a growing web of ports and a strategic location astride some of the world’s busiest sea lanes. More than 240,000 Indian seafarers serve on ships flying every conceivable flag, making India one of the largest labour suppliers to global shipping. When something goes wrong at sea, Indian trade, Indian livelihoods and Indian coastal ecosystems are among the first to feel the blow.


In 2025 the container ship MSC Elsa-3 sank off Kerala. That same year Wan Hai 503 spilled oil and chemicals into the Arabian Sea, again near Kerala’s fragile coast. In 2022 the tanker MT Parth released oil and bitumen off Maharashtra. Earlier disasters still haunt regulators: MV Rak Carrier went down off Mumbai in 2011, MSC Chitra collided with another ship in Mumbai harbour in 2010, and MV Black Rose sank near Paradip in 2009. Even accidents outside Indian waters do not stay there. When the container ship X-Press Pearl caught fire and sank off Sri Lanka in 2021, plastic pellets and chemicals washed up along India’s southern beaches.


Machinery Failure

Marine insurers and casualty investigators are blunt about what is going wrong. Machinery failure now accounts for over 40 percent of serious shipping incidents worldwide - more than collisions, groundings or navigational mistakes. Lloyd’s List puts the figure at 43 percent.


The cause is as prosaic as it is alarming: ships are not being allowed to stop. In the 20th century, most merchant vessels periodically went into “lay-up” – i.e. the time alongside or at anchor when the engines were shut down and engineers could dismantle, inspect and overhaul critical machinery. Today, in the name of efficiency, that has become rare. Vessels are expected to move almost continuously, with maintenance squeezed into hurried port calls or improvised at anchor.


Chief engineers are pushed into a grim juggling act to keep the ship running, keep the paperwork clean and somehow keep the machinery alive. Some take risks, immobilising engines during port stays or at anchor to attempt essential repairs, often skirting port regulations and safety norms. Others tick the boxes without doing the work. Ships limp on until, one day, the small failures line up into a major disaster.


The International Safety Management (ISM) Code, the backbone of the global maritime safety regime, was designed to prevent this. It requires companies to operate ships safely and maintain them properly. But it never anticipated an industry that would try to eliminate downtime altogether.


Human Cost

Modern shipping has become a paradox: faster, more automated and more exhausting. In the past, a ship might spend four to six days in port. Crews could step ashore, see daylight that was not filtered through a porthole, and mentally reset before the next leg. Today, container ships and bulk carriers are often turned around in 12 to 36 hours. Crews work through cargo operations, inspections and paperwork, and sail again without ever leaving the quay.


At the same time, contracts have not shortened. Six to ten months at sea remains common. Worse, many shipowners have cut crew numbers to save money, sometimes in defiance of international guidelines. The result is a small, overworked team running a complex industrial plant that never sleeps. Investigations link fatigue to poor decisions on the bridge and in the engine room, to rising mental-health problems including suicide. It is also quietly poisoning the future of the profession as fewer young people want to go to sea when it looks like a form of floating bonded labour.


Shipping has always been bureaucratic, but the paperwork explosion of recent decades has been particularly perverse. Crews are required to comply with thick binders of checklists and procedures irrelevant to the actual equipment on board.  They allow ship-management companies to show flag-state regulators that they have a system, even if that system has little to do with the ship’s reality.


Everyone in the chain knows this, including the maritime administrations and the International Maritime Organisation (IMO) that oversees them. Yet the fiction persists.


Holes in the Code

The weaknesses are written into the rules. The ISM Code, adopted in the 1990s after a spate of high-profile accidents, was meant to force companies to take responsibility for safety. In practice it left some of the most powerful actors off the hook.


The most glaring omission is the shipowner. Under the code, operational responsibility is often delegated to a ship-management company, sometimes for a modest fee. If something goes wrong, the owner can point to the manager; the manager can point to the crew. True accountability dissolves. Owners have lobbied hard to keep it that way.


The code also says nothing about mandatory lay-up periods for maintenance, even though modern ships are more complex and failure-prone than ever. It leaves crew-contract lengths frozen in a 20th-century world of slower shipping and longer port stays. It allows owners to pressure flag states into approving smaller crews. And it tolerates generic procedures that bear little relation to the hardware on board.


In November 2025 America’s National Transportation Safety Board released its final report into the 2024 collision of the container ship MV DALI with the Francis Scott Key Bridge in Baltimore. The board highlighted structural flaws in the ISM Code itself and urged the United States to push the IMO to fix them. It was an unusually direct challenge to the global rulebook.


For India, this matters more than most. Its ports are busier every year. Its seafarers are on almost every major shipping line. Its coastal waters have already paid a high price for global negligence. And in November 2025 India was re-elected to the IMO Council in Category B - the group of ten countries with the greatest interest in international seaborne trade. That seat gives New Delhi a platform to shape the rules.


The country’s own maritime regulator, the Directorate General of Shipping, has been urged by industry insiders to tighten standards for Indian-flagged vessels and to push for broader reform. But unilateral action is not enough. Ships are global creatures: they are owned in one country, managed in another, flagged in a third and crewed in a fourth. Only the IMO can change the incentives that drive them.


There is an opportunity for a coalition. The United States, prodded by its own investigators, has reason to want a tougher ISM Code. Other trading nations that depend on clean, reliable sea lanes - from Japan to the EU - share the same interest. Together they could push for a rewrite that reflects how shipping actually works in the 21st century.


Such a rewrite would be practical. It would make shipowners explicitly responsible for safety, not just their agents. It would require planned maintenance periods that cannot be wished away by scheduling software. It would recognise that human beings cannot work safely for months on end without rest or relief. And it would replace paper compliance with procedures tied to real equipment.


Shipping is famously conservative. It changes only after disaster. India does not need to wait for that. Its economic future is tied to the sea, as it has been for centuries. The rust beneath the waves is spreading. Whether it is scraped off or allowed to eat through the hull will depend, in no small part, on what happens in the rule-making rooms of the IMO.


(Capt. Singhal is a shipping and marine consultant. Capt. Saggi is ex-Nautical Advisor to Government of India. Views personal.)


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