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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 Grand Indira Melodrama

Updated: Feb 27, 2025

The Congress’ extreme reaction over a casual remark on Indira Gandhi which brought the Rajasthan Assembly to a standstill is political theatre at its most unconvincing.

Rajasthan Assembly
Rajasthan

In a bizarre display of political melodrama, the Congress party in Rajasthan has spent nearly a week in turmoil over a relatively innocuous remark about Indira Gandhi. A comment by state minister and BJP leader Avinash Gehlot referring to the former prime minister as “your dadi” (grandmother) provoked an outsized reaction, leading to multiple adjournments of the Rajasthan Assembly followed by mass protests, and the suspension of six Congress MLAs. That a passing reference to the late PM in the context of a budget discussion could ignite such a storm reveals a deeper malaise within the Congress ranks as a party more eager to defend its legacy with performative outrage than engage in substantive political opposition.


The episode began during a routine Question Hour on February 21, when Gehlot made the comment while pointing out that yet another scheme had been named after Indira Gandhi. The Congress instantly erupted, treating the remark as a grave insult to their revered leader. In the ensuing chaos, the House was adjourned thrice, and six MLAs, including state party chief Govind Singh Dotasra, were suspended. Rather than de-escalating, the Congress escalated matters further, staging a dramatic sit-in within the Assembly and leading a large-scale protest outside the premises, complete with senior leaders and MPs in attendance. The demand? An apology from Gehlot and the revocation of the suspensions.


The Congress, increasingly relegated to the margins of Indian politics, has long relied on its dynastic past to maintain relevance. The invocation of the Nehru-Gandhi name, whether in government schemes or party rhetoric, has served as a crutch. To the Congress, any perceived slight to Indira Gandhi is not just an insult to history but a direct attack on the party’s dwindling political identity. The Rajasthan spectacle appears less about upholding Indira Gandhi’s dignity and more about proving the Congress’s continued ability to flex its muscles, however theatrically.


Meanwhile, the BJP-led Rajasthan government has played its cards shrewdly, standing firm against the Congress’s manufactured outrage. Speaker Vasudev Devnani refused to entertain the Congress’ demands, underscoring the ruling party’s unwillingness to cede ground to political theatrics. This only deepened the Congress’s frustration, leading to further adjournments and disruptions.


The Congress’s actions are a stark contrast to its own past handling of historical criticism. When faced with legitimate critiques of Indira Gandhi’s Emergency-era excesses, the party has either downplayed or ignored them. Yet, a mere offhand remark about her name triggers pandemonium. This inconsistency underscores a selective approach to legacy preservation, one where real historical debates are evaded but trivial provocations become existential crises.


For the average Rajasthani, this bizarre episode must seem entirely disconnected from real issues. While the Assembly should be debating crucial matters pertainign to governance, infrastructure and employment, the state’s principal opposition party is instead consumed with orchestrating a week-long protest over a perceived slight. It is political theatre at its most unconvincing.


If the Congress wishes to revive its electoral fortunes, it would do well to shift focus from personality cults to policy-driven opposition. The Rajasthan debacle is a reminder that nostalgia for past leaders, however grand, is no substitute for present-day relevance. Indira Gandhi was a formidable leader who faced far graver attacks in her lifetime, often responding with ruthless political acumen rather than petulant protests.


Ironically, by reacting with such exaggerated fury, the Congress has drawn more attention to the very point it seems to be trying to refute. Indira’s legacy, whether one admires or criticizes it, is hardly dependent on the words of a state minister. But the Congress’s exaggerated response suggests a party struggling to define itself beyond her shadow. If this is the best fight it can pick, small wonder that it finds itself increasingly irrelevant in the national political landscape.

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