Lessons on Risk management from a warrior king
Can history teach about risk to modern finance professionals?
The conference room was buzzing with side conversations between the attendees. It was a break time in the two-day annual meet of finance professionals from Mumbai - the financial capital of India. The attendees were mostly young (30-40 years), tech savvy finance professionals from lending, asset management, insurance, private equity and allied businesses. This year the venue was Pachgani, on the outskirts of Pune. The theme was related to risk management and revolved around sub themes of process, people and technology.
The session after the tea break was by a historian and the attendees wondered what he could add to this modern topic. Finance was a relatively modern concept and with the last two decades, it had evolved into a complex yet critical component of businesses. A bland and bookish subject like History seemed to be miles apart from the dynamic, thrilling and risky domain of finance.
As the frail historian - Professor Zohaib Kaskar made his entry, the young dynamic professionals gazed at him - a mix of smirks, smiles, scoffs and surprise. The professor was no novice, so he met the air of hostility with his gentlemanly grace and warmth.
As the break-time bell rang, the conference hosts shepherded the attendees back into the conference room. The professor was already at the podium and wore his lecturer smile staring at the latecomers sliding in through the closing doors.
Within seconds, a hush descended onto the conference hall of 300-or-so finance professionals as they saw the first slide come up on the large screen.
It read - ‘Why am I here?’ Professor Kaskar kicked off his session.
You all must be wondering what sense can an old historian like me talk to you all about risk? Isn’t it?
Well, I like telling incidents from history and linking them to relevant topics from the modern life. So, when the organizers reached out to me to talk on this topic and the venue was Mahabaleshwar, the natural thought that came to me was the legendary event that happened close by a few centuries ago.
Would anyone take a shot at guessing it?
A few incidents were cited by the audience, but when one of them mentioned about Chhattrapati Shivaji killing Sardar Afzal Khan the professor latched on.
That is the one I am going to talk about. I am sure all of you read about this in the school but let me ask you a couple of questions about it.
When the two met face-to-face in the shimmering tent at the base of Fort Pratapgad, who struck first?
A young lady mentioned - “Afzal Khan tackled Ch. Shivaji and locked his head using left arm. He then pulled a dagger using his right hand and tried to stab Shivaji in the back!”
The professor appreciated her interest in history and probed - “And when he stabbed, what happened? Did Chhatrapati get hurt?”
The lady continued - “No, he had an armor on his back which protected him. Actually, under his turban, he also had a skull protection which prevented him from getting hurt from the first head lock …”
With a smile on his face, the professor said - “See the risk management that Maharaj had done?”
A wave of applause filled the conference room as the crowd now could sense what was coming.
“I will now expand on Ch. Shivaji’s risk management approach using this historic incident from beginning till end. Are you all now convinced that I have something worthwhile to listen to? It is the history you all hated in school!”
There was a unanimous nod from the audience as they were now eager to hear more.
When Shahaji Raje and Jijau - parents of Ch. Shivaji envisioned Swarajya, there was danger lurking everywhere around them. As they nurtured the young mind of Shivaji, he burned with the intensity of establishing Swarajya, but he was wise to not jump heedlessly into anything.
During his formative years, the Deccan plateau was dominated by the Sultanates - Ahmednagar, Golconda and Bijapur. While they squabbled with each other for territories, they formed a united front against the mightier Mughals. This meant there was uncertainty all-around.
So, in such a risky environment, to breathe a new belief for Swarajya and then forge a firm path, step-by-step, must have taken a completely new way of thinking. Let’s see what it was made of.
Pause to Process - risk profiling
When the news of Afzal Khan’s oath to capture Shivaji reached the fledgling Swarajya, everyone felt fear deep into their bones. Stories of Afzal’s might, shrewdness and cruelty had already spread around for many years. Besides, there was strong enmity between Afzal and Shahaji Raje at the Adilshahi court and rumors were rife that Afzal had killed Shivaji’s elder brother in battle through deceit.
But, Shivaji did not let this backdrop color his perception. Instead of swinging into action and ordering his troops to counter them, he paused.
He activated his spy network led by Bahirji Naik even before Afzal started his expedition. He wanted to know everything about the expedition - army, cavalry, arsenal, the routes they will take. He went one step further and built insights into Afzal - not the general, but the man. He wanted to think like Afzal.
In today’s parlance, we use fancier terms like risk profiling. Here is a startup king with no established army, struggling finances, but thinking like a seasoned risk expert.
Process to Plan - risk isolation
Once the data point started pouring in, Shivaji pulled in experts from military, armory, ministry and even Ayurveda to put a plan to tackle this threat.
Listening to the anecdotes of Afzal’s temper, food habits and overall behavior, he sought the advice of an Ayurvedic expert to identify how to interact with him. There are folklores of how a spy cook was sent into the expedition to spice up the food so that Afzal would remain at his edge and therefore take poor decisions. Imagine the level of planning!
Seeing the routes he was taking and the mayhem he caused along the way, Shivaji realized Afzal’s plan was to strike terror in the hearts of local population and thereby weaken the resolve of his newly minted army. Remember Shivaji’s army was a band of passionate people - no match to the well drilled and armed Adilshahi cavalry.
Shivaji needed a way to distract Afzal Khan from temple desecration and massacre. So, he fled to Jawali and settled in Pratapgad. This ensured Afzal Khan had to follow him into the treacherous valley rather than roll through the plains. Adilshahi army, cavalry and armor was well suited for plain warfare, but the slippery and steep slopes of valley neutered their strengths. Thus, Shivaji had now isolated the Adilshahi foot soldiers into an equal footing with the passionate band of brothers - Mavalas and their guerrilla warfare.
While these military tactics were in play, Shivaji was already playing the next move. He realized that he had to take on Afzal one-on-one to fully isolate the risk of any damage to Swarajya. To make this happen, he enrolled a shrewd minister - Pantaji Bokil who started diplomatic interactions visiting the Afzal expedition. Through gifts, letters and meetings, the wily Pantaji convinced Afzal and his generals that Shivaji was scared and had run away to save himself from Afzal. The only way for Afzal to catch Shivaji was to meet him at Pratapgad and then allay his fears of death at Adilshahi court.
Using a plethora of military and diplomatic moves, Shivaji isolated the risk from spreading through the Swarajya.
Plan to Perform - risk elimination
Having ensured that Afzal was no longer hurting the larger population, Shivaji put together the plan to face Afzal. He knew that Afzal would attack him and knowing his might, there was a slim chance of his own survival.
So, if Shivaji does not survive, then how to ensure that his Mavalas and local population do not suffer? Here again, Pantaji spun a web of anecdotes to lure Afzal along with only 10 armed men to the base of the fort rather than top of the fort. With only 10 men, Mavalas now had a chance to fight them to make sure that they do not capture the fort.
Now, for the meeting itself, Shivaji had an armor, skull cap and a special weapon - Bagh Nakh (tiger claw) prepared. While the armor and cap were defense, the surprise offense was the claw. When worn on the palm, it was hard to notice, but powerful weapon to dismember the opponent.
Shivaji searched and identified Visaji Morambak who had a similar build like Afzal and practiced tackling him in various ways.
Shivaji had an emotional talk with Mavalas and motivated them to drain their emotions to be vigilant for any deceit or attack. Whatever happens during the meeting, their plan was to ensure that the remaining Adilshahi soldiers do not escape.
On the meeting day, he and his Mavalas executed the plan right down to the smallest detail. Tearing apart Afzal Khan and decimating his contingent, Shivaji and his Mavalas eliminated the risk of Swarajya demolition. From risk profiling to risk isolation to risk elimination, this is how Shivaji showed risk awareness.
Perform to push through - risk turned to reward!
The fourth piece is the most audacious and perhaps not something you will hear typical risk professionals say. Shivaji - an astute strategist and brilliant statesman- knew that within each risk lay the seed for reward. If one could handle the risk with proper planning, the reward was up for winning.
In this narrative, one will find it hard to notice any reward, isn’t it? But see how Shivaji thought.
In the army of Afzal Khan, there were traders with valuable merchandise from faraway lands. Before the meeting, Shivaji and his ministers invited the traders to the top of the fort and bought their merchandise while treating them with great hospitality. They showcased various local items and encouraged them to build trading connects. Irrespective of the outcome of the meeting, merchants had realised potential for more trades, this benefitting the local population too.
Afzal Khan had moved in with a huge cavalry, army and arsenal. After Afzal, there were barely any formidable general left in Bijapur thus rendering them temporarily vulnerable. Sensing this, Shivaji devised a deadly plan wherein he entrusted his dear friend and general - Netoji Palkar to await stealthily on the borders of Bijapur and strike once the meeting is over.
Unaware, weak and leaderless - if everything went by plan, Mavalas would strike right into the heart of Adilshahi while they were anticipating a victory far away. And that's exactly what they did.
This revolutionary way of looking at risk is what I call risk-turned-to-reward and I believe its applicable to every walk of life.
As Prof. Kaskar ended his speech, the audience, which was so far paying rapt attention, applauded him. Some even gave a standing ovation. The professor had once again unravelled a gem from the treasures of history!
History and Present .. nice combination with real examples.. Nice read Amit!
Very detailed and beautifully written. I was unaware of few names mentioned it in here. Amazing read!!!!!