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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 )

The Forgotten Strongman

Updated: Feb 3, 2025

The unsung Jat hero from Rohtak, Sir Chhotu Ram and his Unionist Party stood as the bulwark against Jinnah’s ambitions for Punjab, but his legacy today remains largely forgotten.


Sir Chhotu Ram

Recently, I found myself in dusty Rohtak in Haryana, now home to sprawling highways and concrete buildings. Yet, it was not the modernity of the place that caught my attention, but rather a paradox of a forgotten hero whose name barely lingers in the annals of our collective memory.


His death anniversary (on January 9) had passed unnoticed, but his contribution to the preservation of India’s integrity and the thwarting of Partition is nothing short of remarkable. The man was Sir Chhotu Ram, a leader who stood firm in the face of the Muslim League’s encroachment, ensuring that the Punjab he loved remained a fractured mosaic of communities until his untimely death in 1945.


Chhotu Ram was a towering figure in the Unionist Party, the political force that governed undivided Punjab in the pre-Partition years.


The Unionists’ most significant achievement was their refusal to allow the Muslim League, led by Mohammad Ali Jinnah, any foothold in Punjab until the final months of 1947.


But despite their pivotal role in the partition drama, this party is barely mentioned in mainstream historical narratives. Few outside Punjab even recall its name, and fewer still remember the vital role Chhotu Ram played in trying to keep the province united.


The Unionist Party, founded in 1923 by Fazli Hussain, represented the region’s landlord class and emphasized Punjabiat - the concept of Punjab’s unity that transcended religious lines, seeking to unite Hindus, Muslims and Sikhs in shared political and economic interest. Its early success lay in appealing to all communities in Punjab.


After Hussain’s death, leadership passed to Sir Sikandar Hayat Khan, a politician with deep grassroots ties, who consolidated the Unionist’s power. But perhaps the party’s greatest strength came from Chhotu Ram, a man of humble origins from Rohtak in the Hindu-majority region of East Punjab, who had earned the trust of the Hindu Jats and their overwhelming support.


Punjab’s importance in British India was undeniable. Its fertile lands, bolstered by an extensive canal irrigation system, made it a key revenue generator for the British empire during the Second World War.


The region also supplied a significant proportion of soldiers to the British Indian Army, particularly from the Muslim, Sikh and Hindu communities. The significance of Punjab as the ‘grain bowl’ and ‘sword arm’ of India was not lost on Jinnah, who coveted it as the jewel of the new Pakistan. His dream of a Muslim-majority state was intricately tied to controlling this fertile, strategically vital region.


The demographics of Punjab were more complex than Jinnah expected. Of the five divisions - Rawalpindi, Lahore, Multan, Jullundur and Ambala - three were Muslim-majority, while two were Hindu-Sikh-dominated. This balance, with Muslims making up 60 percent of the population but concentrated in the western regions, kept Jinnah’s ambitions in check.


The Unionists, led by Sir Sikandar Hayat Khan, opposed Partition, and Sikandar’s alliances with conservative Muslim movements like the Ahrars and Khaksars, along with Chhotu Ram’s influence in East Punjab, prevented the Muslim League from gaining significant ground.


Jinnah’s desperation to make inroads into Punjab culminated in the 1937 Jinnah-Sikandar pact, which allowed Muslim Unionists to maintain dual membership in both the Muslim League and the Unionist Party. But crucially, the Unionist Party maintained ultimate control over Punjab’s political future. Still, it was the deep-rooted political dexterity of Sikandar and Ram that kept Punjab firmly in the hands of the Unionists for the better part of the 1940s.


However, the death of Sir Sikandar on Christmas night in 1942 dealt the Unionists a severe blow. Replacing him was Sir Khizr Hayat Tiwana, a man less politically astute and lacking the mass appeal of his predecessor. Sensing an opening, Jinnah redoubled his efforts, mobilizing students from Aligarh Muslim University and League strongholds in other parts of India to launch a campaign of religious fervour in Punjab. The once-solid Unionist front began to crack.


When Sir Chhotu Ram passed away in 1945, the Unionists were left vulnerable. Without their strongest and most beloved leader, the political unity that had previously shielded Punjab from Jinnah’s designs began to disintegrate. The 1946 elections reflected this shift, as the Muslim League emerged as the largest party in Punjab, although still short of a majority.


Despite frantic efforts at coalition-building, it was the Congress and the Akali Dal that came together to form a government, with the Unionists sidelined. The League, feeling marginalized, resorted to violence through its paramilitary National Guard, launching attacks on Hindu and Sikh communities in the region, forcing many to flee.


By March 1947, Sir Khizr, overwhelmed by internal and external pressures, resigned. The British government, under Governor Evan Jenkins, allowed the Muslim League to gain ground, facilitating the eventual Partition of Punjab and India.


It is a tragedy that, despite his significant role, Sir Chhotu Ram remains largely forgotten, even in his own hometown of Rohtak. To the locals I spoke with, he was a distant memory, often confused with his successors, such as Devi Lal, or mistakenly identified as a Congressman.


The legacy of this unsung hero, who kept Punjab out of Jinnah’s grasp for as long as he did, deserves to be acknowledged.


(The author is a history observer. Views personal.)

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