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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 Geometry of Resistance: How Algeria’s FLN, Spain’s ETA and Sri Lanka’s Tigers reshaped the asymmetric battlefield

Our series on asymmetric warfare revisits pivotal moments in modern history when underdogs rewrote the rules of war, and forced superpowers to reckon with new realities.


PART - 5


From Algiers to Jaffna via Bilbao, the FLN, ETA and LTTE redefined insurgency, casting long shadows over the playbooks of today’s counter-insurgents.

In the brutal laboratory of modern insurgency, few case studies are as instructive or unsettling as that of the FLN in Algeria, the ETA in Spain, and the LTTE in Sri Lanka. Each emerged not merely in opposition to superior state power, but in response to a particular political order they deemed illegitimate. Shaped by distinct geographies, grievances and eras in modern political history, they transformed asymmetric warfare from a strategy of last resort into a deliberate doctrine that treated violence not just as a tactic, but as a means of political communication.


Asymmetric warfare, classically defined, involves weaker actors confronting materially superior foes through subversion, attrition and psychological dominance. But these movements went further. They institutionalised the asymmetry by creating parallel states, transnational support networks and elaborate propaganda systems. While the IRA, the Viet Cong and the Afghan Mujahideen are frequently held up as archetypes, the FLN, ETA and LTTE each introduced chilling innovations.


The FLN weaponised urban space and international opinion, the ETA blurred the lines between nationalist militancy and European terror, and the LTTE pioneered suicide bombings and insurgent naval warfare. Together, they rewrote the manual on how the ‘weak’ could fight - and unnerve the ‘strong.’


Violent Casbah

The Front de Libération Nationale (FLN) arose in the dying days of French colonialism, forged in the crucible of frustration and nationalist fervour. France’s hold over Algeria was deep, legally entrenched and racially tiered with Algeria regarded less as a colony more of an overseas French département. Yet to the Arab Muslim population, colonial ‘citizenship’ came with neither dignity nor real power. When the FLN launched its revolution in 1954, it did so with scant resources but a ruthless clarity of purpose to render French rule ungovernable.


The ‘Battle of Algiers’ in 1956-57 remains a textbook case in asymmetric escalation. Bombings in cafés, cinemas and the European quarters of Algiers were choreographed with the grim precision of a symphony. The FLN’s urban cells involving predominantly female couriers and male bombers struck at symbols of settler life, daring the French to respond. And respond they did, with sweeping torture and repression that stained France’s claim to civilisation. General Jacques Massu’s paratroopers ‘won’ the battle but lost the argument.


The FLN understood that terrorism was not only about casualties but was theatre for international audiences. By provoking a heavy-handed response, the FLN framed France as the villain in a morality play that was staged before the United Nations and decolonising nations. When Algeria finally gained independence in 1962, the FLN emerged not just as the victor, but as a model with their war of attrition redefining insurgency as both spectacle and strategy.


It is no accident that Gillo Pontecorvo’s ‘The Battle of Algiers’ (1965) remains compulsory viewing in military academies and insurgent bunkers alike, with its grainy neorealism perfectly capturing both the tactics of asymmetric warfare as well as the moral ambiguity of urban rebellion into a definitive study in revolutionary violence.


Basque Shadows

In another corner of a continent grappling with memory and identity, ETA (Euskadi Ta Askatasuna), the Basque separatist group, launched its own campaign for national liberation. Founded in 1959 under Francoist Spain, ETA began as a cultural movement but quickly evolved into a paramilitary organisation with Marxist overtones. Unlike the FLN, whose fight was against a foreign occupier, ETA operated within the contested legitimacy of a post-dictatorship democracy.


ETA’s method was more surgical than the FLN’s, but no less deadly. From the 1970s through the early 2000s, it carried out assassinations, bombings and kidnappings that created a climate of fear not just in the Basque region but across Spain. Their most infamous operation - the 1973 car bomb that killed Admiral Luis Carrero Blanco, Franco’s anointed successor - was an audacious act of political decapitation that changed the arc of Spanish transition. Small wonder it was made into yet another excellent, if lesser-known film than ‘Algiers’ by Gillo Pontecorvo in 1979, which starred the great leftist actor Gian Maria Volonte.


Yet ETA’s longevity exposed its contradictions. As Spain democratised and granted autonomy to the Basque region, the ETA’s raison d’être became increasingly tenuous. Its repeated targeting of civilians, such as the 1987 Hipercor bombing in Barcelona which killed 21, alienated supporters and international sympathisers alike. Still, its infrastructure of safehouses, coded communications and transnational logistics offered a new model of networked insurgency, one that blurred the lines between political militancy and criminal enterprise.


Spain’s response, too, evolved. In the 1980s, it had flirted with state-sponsored death squads (the GAL) only to face scandal and backlash. Eventually, through a mix of counter-terror policing, judicial pressure and political negotiation, Madrid outlasted the insurgency. In 2011, ETA announced a definitive end to its armed campaign. It had not won independence, but it had reshaped Spanish politics and pioneered a kind of European terrorism that would echo in the tactics of later jihadist networks.


Tiger Alert

Half a world away, in the sweltering jungles of Sri Lanka, the Liberation Tigers of Tamil Eelam (LTTE) turned asymmetric warfare into something almost industrial. Born in 1976 amid rising ethnic tensions between Tamils and Sinhalese, the LTTE did not merely resist the state—but constructed a parallel one in its stead, much like the IRA. Under its founder, the messianic and coldly methodical Velupillai Prabhakaran, the Tigers built a standing army, a naval wing, an intelligence service and even rudimentary air power.


In a chilling tactical innovation, the LTTE pioneered the use of suicide bombers long before al-Qaeda embraced the method. The assassination of Rajiv Gandhi in 1991 by a female suicide bomber was emblematic of the group’s operational reach and ideological zeal. They turned children into soldiers, civilians into shields and humanitarian norms into optional suggestions. The Tigers also leveraged the Tamil diaspora across Canada, Britain and Australia to fundraise and disseminate propaganda, a precursor to modern digital radicalism.


For decades, the Sri Lankan state struggled to match the LTTE’s adaptability. Counter-insurgency campaigns were brutal, poorly coordinated and often indiscriminate which only drove more Tamils into the Tigers’ arms. But by the mid-2000s, the balance had shifted. With Chinese and Israeli military support, Colombo modernised its military strategy and intelligence apparatus. In 2009, after a ruthless offensive that ended in mass civilian casualties, the LTTE was annihilated. Its dream of Tamil Eelam was buried under the rubble of Mullivaikkal.


The legacy of the LTTE, however, is more complex. It demonstrated that asymmetry can evolve into near parity if the insurgent controls the terrain, the people and crucially, the narrative. Yet it also showed the brittleness of personality-driven movements. When Prabhakaran died, so too did the coherence of the Tamil military project.


What links these three geographically disparate and ideologically distinct movements is not just their asymmetry but their ability to shift the grammar of conflict. The FLN turned cities into battlegrounds and the UN into an amplifier. ETA proved that terror could persist within a democracy, even as its legitimacy eroded. The LTTE turned a patch of jungle into a proto-state, marrying insurgency with bureaucracy.


Yet their fates also hint at the limits of asymmetric war. Each movement, at its peak, forced a state to recalibrate but none could ultimately win outright. Today, modern insurgencies from the Hamas to the Houthis draw from these playbooks but face new terrain in form of drones, cyberwarfare and public opinion shaped in real-time.


Asymmetric warfare is no longer confined to saboteurs in back alleys. It has metastasised to digital cells, lone-wolf actors and proxy militias backed by state patrons. But the chief lesson of the FLN, ETA and LTTE that insurgency is not just about bombs and bullets but provocation and the manipulation of perception, continues to endure.

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