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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 Invisible Network Powering Mumbai’s Commute

Nearly 80 lakh passengers travel every day, often shoulder to shoulder, quietly relying on one another in moments that rarely get noticed. I’ve seen commuters lean forward to spot an approaching train, hesitate for a second, and then turn to a stranger for clarity. These small, instinctive interactions guide the city in real time. Long before apps existed, this was how information moved through shared awareness andhuman judgment. There’s a quiet resilience in how strangers step in for each other, without hesitation, when uncertainty sets in.


If you observe closely, you start to realise that Mumbai’s transport system is not just steel, signals, andschedules. It is also made up of people constantly reading their environment, interpreting signals, andexchanging tiny but crucial pieces of information. A nod, a quick word, a raised eyebrow when a train is too full. These micro interactions keep the flow moving even when formal systems fall short.


As mobility increasingly shifts to digital platforms, I’ve often reflected on what we risk losing in that transition. The challenge isn’t to replace this human network, but to carry its essence forward in a form that still feels immediate, credible, and useful. Schedules and alerts play an important role, but during peak hours, sudden delays, or extreme weather events, they are rarely enough. In those moments, commuters need context. Is the next train delayed? Is it already overcrowded? Is entry or exit at the station affected? Are the escalators or elevators operational today? These are questions commuters instinctively ask each other on the platform, yet they often go unanswered once someone turns to a screen.


What makes human to human information so powerful is not just speed, but trust. When someone standing next to you says, “That train is already packed” or “They just announced a delay,” it carries weight because it comes from lived experience, not a distant system. Digital tools are excellent at scale, but they often struggle with this kind of situational awareness.


This thinking shaped how we approached community and communication while building Yatri. As the official Mumbai Local app partnered with Indian Railways, Yatri already supports lakhs of commuters with live train tracking, metro ticket booking, and multimodal journey planning across local trains, metro, buses, monorail, and ferries. But system level data, however accurate, cannot fully capture the lived reality of a crowded platform or a situation that is evolving minute by minute. What can capture it is people when they are given a trusted, relevant space to share what they are seeing and experiencing in real time.


Creating line specific spaces across the Western, Central, and Harbour lines became a natural way to let that collective commuter intelligence surface digitally. In practice, this means a delay noticed by a few people at Dadar can quickly help someone deciding whether to board at Borivali. A blocked exit or broken escalator can be flagged before thousands walk into it. These details rarely appear instantly in official feeds, yet they are exactly what commuters need when making fast decisions.


Over time, I’ve seen how even the smallest pieces of shared information can change outcomes at scale. During monsoon disruptions, a few timely updates can help thousands of commuters make safer, faster choices. When a single peak hour train carries over 3,000 passengers, one informed decision whether to wait, switch trains, or take an alternate route can ease congestion, reduce panic, and save precious time. When these moments stack up across the network, they have the power to influence millions of journeys.


What is striking is how closely this mirrors what Mumbai commuters have always done. The difference now is reach. A message that once travelled five people down a platform can now reach thousands across an entire line.


For me, this is not about adding another feature to a mobility app. It is about recognising how Mumbai actually works. People do not experience transport as routes and timetables. They experience it as packed platforms, rushed decisions, missed connections, and small acts of help from strangers. Technology should respect that reality, not flatten it.


By bringing together official transit data and collective commuter insight, daily travel can move from something reactive and stressful to something calmer and more assured. In a city where millions move together every day, the future of mobility is not just smarter systems. It is about strengthening the quiet human intelligence that already keeps Mumbai moving. Creating Yatri has been our attempt to make sure that intelligence does not disappear as travel becomes more digital, but instead grows stronger when shared.


(The writer is a co-founder of Yatri. Views personal.)

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