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....

min read

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 )

The Battle That Shaped the Maratha Empire

Shoumojit Banerjee
Mar 3, 2025
3 min read

Updated: Mar 4, 2025

This week marks the anniversary of a battle fought nearly three centuries ago that marked the high tide of an emerging Empire. The Battle of Palkhed (in present-day Sambhajinagar district) fought between February 25 and March 6, 1728, is a masterclass in the art of war when a young general outmanoeuvred his seasoned adversary to establish the supremacy of his people.

Much like Napoleon’s early campaigns or Rommel’s desert warfare, Peshwa Bajirao I’s triumph at Palkhed over the crafty Nizam-ul-Mulk, Asaf Jah, was a defining moment in Indian history and one of the most brilliant feats of strategic mobility in military history. The Nizam was among the last great commanders of the rapidly collapsing Mughal Empire, whose decline set in after Aurangzeb’s death in 1707.

If Chhatrapati Shivaji was the founder of Maratha power, Bajirao, the audacious Peshwa of Chhatrapati Shahu, was its architect. When he became Peshwa in 1720 aged twenty, the Marathas were a divided people, held together more by memory than by strength. The Mughal Empire, a sprawling giant in decline, still cast a long shadow over the subcontinent and its satraps like the formidable Nizam-ul-Mulk sought to carve their own fiefdoms from its crumbling edifice. In the Deccan, the Nizam saw himself as the rightful heir to Mughal authority, and the Marathas as upstart challengers to be tamed. It was Palkhed that shattered that illusion.

The historian Sir Jadunath Sarkar described Bajirao a “Carlylean Hero as King.” And yet, until 1930, when the Peshwa State Papers were finally made available to scholars, no comprehensive study of this great captain’s achievements had been possible. It was V.G. Dighe in his 1944 work ‘Peshwa Bajirao and Maratha Expansion’ who first mapped Bajirao’s genius in full.

Palkhed even drew the attention of Field Marshal Bernard Montgomery, the victor of El Alamein during World War II. In his 1968 book ‘A History of Warfare,’ Montgomery dissected Bajirao’s campaign with admiration. “The lightly equipped Marathas moved with great rapidity, avoiding the main towns and fortresses, living off the country, burning and plundering,” he observed. It was a war of movement that left the Nizam’s larger, heavier force stumbling in confusion.

Bajirao understood terrain and momentum in a way few Indian commanders before him had. His cavalry was unburdened by artillery or supply trains, allowing it to move at astonishing speeds. The Marathas struck deep into enemy territory, raiding and pillaging, then vanishing before a counterattack could be mustered. The Nizam, exasperated, chased shadows.

Desperate for a decisive engagement, he turned to a time-honoured strategy - rather than pursue Bajirao, he would strike at the heart of his power. His forces marched west to Poona, the Peshwa’s stronghold, and razed it in retaliation. This made Shahu nervous, and he urged Bajirao to return home and confront the invaders. But the young Peshwa, with the instincts of a master strategist, ignored the summons and instead launched a counterattack on the Nizam’s capital, Aurangabad, inflicting the same devastation on the enemy’s lands.

Forced onto the defensive, the Nizam now found himself in a trap of Bajirao’s making. As he attempted to turn back and engage the Marathas, Bajirao’s forces executed a textbook envelopment manoeuvre. The Marathas cut off the Nizam’s supply lines, surrounded his army, and harried them from all sides. By March 6, 1728, the Nizam had no choice but to sue for peace. Palkhed, much more than a military triumph, was a defining moment for Maratha supremacy in the Deccan. The Nizam, later humbled again at Bhopal in 1738, was forced to seek a modus vivendi with the Marathas.

Palkhed reshaped power dynamics across the subcontinent. Such was the Peshwa’s awe that even in 1735, when the Marathas were locked in fierce campaigns against Mughal officials, his mere name commanded respect across northern India. That year, his pious mother, Radhabai, undertook a pilgrimage without fear in northern India, receiving invitations from Rajput princes like Sawai Jaisingh and Mughal nobles eager to host her. Muhammad Shah, the Mughal emperor, ordered a personal escort of a thousand troops for her journey while Muhammad Khan Bangash, whom Bajirao had decisively routed just years before, accorded Radhabai every respect when she passed through his jurisdiction.

Palkhed made the Maratha cavalry a terror across the subcontinent, from Malwa to Delhi. Within a generation, the Mughal emperor himself would be reduced to a puppet in Maratha hands.