Understand Loss Aversion
What is it?
Loss aversion is the tendency for people to react to losses more strongly (1.5-2.5 times more*) than gains, making them try to prevent losses more than they try to make gains. This fear often leads to risk aversion and a reluctance to pursue potentially beneficial opportunities. For instance, one might avoid training in a more effective way of working due to a fear of incompetence, prioritising avoiding loss of self-esteem over potential gains.
How knowing this can help us:
Understanding loss aversion is crucial for mitigating its influence on decisions and crafting impactful change strategies. Focus on framing the change in a way that highlights the potential benefits that can be achieved, prompting individuals to weigh their options more carefully and foster a more deliberate response. For instance, to encourage participation in training for a more effective way of working instead of saying, "Think about all the benefits you'll gain" try "Think about all the time saved you'll miss out on if you don't participate."
Sources & Resources:
Kahneman, D. (2012). Thinking, Fast and Slow. Penguin Books