Company leaders launch change initiatives with good intentions. They’ll send carefully crafted emails and make energetic speeches telling employees how the way they work will transform for the better. We often embody the same enthusiasm in our personal lives: this is the year we’ll eat healthier and exercise more!

But achieving change is difficult. Organizations spend more than $10 billion annually on change transformations,^[1]ALM Intelligence, Competitive Landscape Analysis: Change Management Consulting, 2016. but more than 50% of efforts fail to meet objectives. At an individual level, we make New Year’s resolutions to go to the gym or eat healthier, but 80% of these resolutions fail by February (and ~60% of January gym-goers fail to return later in the year).^[2]Marla Tabaka, “Most People Fail to Achieve Their New Year’s Resolutions,” Inc.com, 2019.

To better understand why, despite our best intentions, change efforts tend to fail, we looked to the literature—and found that “loss aversion” presents a helpful point of reference. This established psychological concept states that people hate loss more than they love a gain of equal magnitude; for example, the pain of $5 falling out of their pocket is psychologically twice as powerful as finding $5 on the street. We believe people view change in a similarly emotion-charged way. Like loss, they think of change as negative, and that emotion overwhelms their ability to consider the potential benefits. In other words: people are change-averse.

The author team deeply appreciates the invaluable contribution of Milo Tamayo, whose original research made this article possible.