The Scientific Leader Blog

Did you ever think your risk management investments might include a Monkey Squad?  In Mysore (Mysuru), India, the local government funds a Monkey Squad, a Cow Squad, a Dog Squad, and even a “Special Gang” during mango season, according to this report on their website (page 39).

At first, I found this humorous, but the more I investigated it, it is actually a cross-cultural example of a special form of operational risk that is unique to locations with violent mammals.   In October, 2007, for example, the BBC reported that the deputy mayor of the Indian capital Delhi died after being attacked by a horde of wild monkeys.  In response, Delhi’s government hired a langur monkey trainer to frighten off other monkeys from boarding trains and hurting people.

It’s an unusual example of an organization purchasing a real option – a group of people (and Langurs) skilled in managing monkey menaces – to mitigate risk.  These particular governments felt it was worth hiring, in Mysore’s case, 5 people who dedicate their careers to anticipating and addressing monkey violence when needed.  Real Options is a new approach to managerial finance in which risk and uncertainty are considered alongside cost and value creation.  It allows a leader to make partial investments immediately, and allow uncertainty such as monkey attacks) to resolve itself before either exercizing an option, or letting it expire without action.