FOREWORD
Today’s article was partly inspired by the wars unfolding around the world.
In particular, Steven Erlanger’s article “In Iran, Trump Risks Another American ‘Forever War’”, published in The New York Times on 16 July 2026, made me reflect on an aspect of war that is often given far less attention than the decision to begin one: the willingness, and the ability, to decide when it must end.
Erlanger observes that, since Vietnam, the United States has repeatedly become involved in conflicts that seemed capable of continuing almost indefinitely, until a later president eventually concluded that the political, economic and human cost was no longer sustainable.
The article also quotes Lawrence Freedman, Emeritus Professor of War Studies at King’s College London, who describes what he calls the “short-war fallacy”: the tendency of powerful actors to believe that superior military strength will produce a rapid victory, without sufficiently considering whether military superiority can actually be translated into lasting political and strategic success.
This made me think about how often, throughout my own life, I have faced decisions that could profoundly affect what came next — in business, in my personal life and within my family.
Some required perseverance.
Others required me to stop.
And, looking back, I realise that the most difficult question was rarely whether I had the courage to continue.
It was whether continuing was still the right thing to do.
THE DONKEY, THE DEAD HORSE AND THE STOP-LOSS
I have written before about two apparently contradictory principles of leadership.
The first comes from an old Sicilian proverb:
“You ate the donkey and now you are embarrassed by the tail?”
( robertogrippi.com/you-ate-the-donkey-and-now-you-are-embarrassed-by-the-tail/ )
Its lesson is simple.
Once you have taken a major decision, do not lose courage when confronted with its smaller, inevitable consequences.
If the decision remains right, follow it through.
Eat the tail.
The second is the Dead Horse Theory.
( robertogrippi.com/the-dead-horse-theory/ )
Its lesson appears to say exactly the opposite:
When you realise that you are riding a dead horse, dismount.
Do not buy a better saddle.
Do not change the rider.
Do not create a committee to investigate how to make the horse run faster.
Accept reality and stop.
So, which is it?
Should a leader persevere?
Or should a leader know when to quit?
The answer is: both.
And that is precisely the problem.
The difficult part of leadership isn’t knowing that perseverance can be a virtue, nor understanding that sometimes a failed strategy must be abandoned.
Everyone knows both.
The difficult part is recognising the moment at which one becomes the other.
When is the obstacle merely the donkey’s tail — the final inconvenience that must be faced with consistency?
And when is the horse dead?
To answer that question, we must first ask an even more fundamental one:
What exactly constitutes victory?
An objective without a sufficiently clear definition of victory cannot have a rational definition of failure.
And without a definition of failure, there can be no rational exit strategy.
Managers, directors, politicians and governments frequently fail at precisely this point.
They plan extensively for victory.
And only for victory.
They may have a Plan A, a Plan B, a Plan C and a Plan D.
But look carefully at those plans.
Very often, they all share the same unquestioned assumption:
We must achieve the original objective.
Plan B is therefore not truly an alternative.
It is merely another route towards Plan A.
If the first strategy fails, we try another.
If that fails, we invest more.
We change the team.
We change the supplier.
We increase the budget.
We escalate.
We try harder.
But nobody asks the uncomfortable question:
What shall we do if the objective itself can no longer be achieved at an acceptable cost?
That is the plan nobody likes to make.
Because making it requires us to contemplate failure before we have even begun.
Yet that is precisely what serious strategy requires.
Military planners cannot responsibly prepare only for victory.
They must consider every plausible outcome: rapid victory, prolonged conflict, stalemate, retreat and defeat.
They must know not only how to advance, but also when to stop advancing.
They must decide how much they are prepared to lose before the objective is no longer worth its price.
Financial investors understand this very well.
Before entering a position, a disciplined investor may establish a stop-loss.
A stop-loss does not predict failure.
It recognises that failure is possible.
More importantly, it is not a plan for failure.
It is a plan for deciding when perseverance ceases to be rational.
And the crucial moment for defining it is not when everything is already going wrong.
It is before we begin.
What seems elementary in finance becomes extraordinarily difficult in business, politics and war.
The reason is profoundly human.
Once we have invested money, time, reputation, political capital — or human lives — in an objective, abandoning it becomes progressively more difficult.
Yesterday we invested ten, so today we invest another five to avoid losing the ten.
Tomorrow we invest another ten because otherwise we shall have wasted fifteen.
Eventually, we may spend one hundred trying to justify the first ten.
At that point, something fundamental has changed.
We are no longer pursuing the original objective.
We are defending our previous decisions.
This is how projects become corporate quagmires.
It is how political programmes survive long after the assumptions upon which they were based have disappeared.
And it is how wars expected to last weeks continue for years.
The problem is not necessarily the absence of alternatives.
The problem is the absence of an exit condition.
There is an enormous difference between asking:
“What shall we do if this does not work?”
and asking:
“At what point shall we accept that this is no longer working?”
The first question produces Plan B.
The second produces strategy.
The “short-war fallacy” illustrates the same problem on the largest possible scale.
Powerful states, confident in their military superiority, may assume that superior force will achieve their objectives quickly.
But battlefield superiority is not the same as strategic success.
You may win every battle and still lose the war.
Military power can destroy an army.
It can occupy territory.
It can overthrow a government.
But it cannot, by itself, determine what happens afterwards.
A strategy must therefore define not merely how victory might be achieved, but what victory actually means, what price is acceptable and what conditions would demonstrate that the original objective is no longer realistic.
This applies just as much to companies and individuals as it does to governments.
A company can increase turnover while destroying margins.
A project can meet every technical milestone while losing its commercial purpose.
A politician can continue winning elections while becoming progressively less capable of implementing the programme for which those elections were fought.
Operational success and strategic success are not the same thing.
Before beginning any important undertaking, a leader should therefore ask:
What constitutes victory?
What would constitute an acceptable partial victory?
What is the maximum price we are prepared to pay?
Which assumptions must remain true for this strategy to continue making sense?
What evidence would demonstrate that those assumptions are no longer true?
At what point do we reduce our objective?
At what point do we negotiate?
At what point do we stop?
And, perhaps most importantly:
Who has the authority to say, “Enough”?
That last question matters because organisations are remarkably good at starting things.
They are much less good at stopping them.
Stopping feels like admitting that the original decision was wrong.
But this confuses two entirely different judgements.
A decision may have been perfectly rational when it was made and completely irrational five years later.
Changing course does not necessarily mean that yesterday’s decision was wrong.
It may simply mean that today’s reality is different.
This is why the stop-loss must be defined while judgement is still relatively free from emotional investment.
The person making the decision before the loss and the person making it during the loss are psychologically not quite the same person.
Beforehand, we can establish criteria rationally.
Afterwards, pride intervenes.
Hope intervenes.
Reputation intervenes.
And sunk costs begin to speak:
“We cannot stop now, after everything we have invested.”
But everything already invested is precisely what should not determine the next decision.
The past cannot be recovered.
The only decision still available concerns what we do next.
So perhaps the most useful question is also the simplest:
Knowing everything we know today, would we make the next investment today?
Not the first investment.
Not the investment we made five years ago with the information we had then.
The next one.
Today.
If the answer is yes, continue.
Perhaps you are merely looking at the donkey’s tail.
Eat it.
If the answer is no, stop.
Perhaps the horse is dead.
Dismount.
The purpose of a stop-loss is to help us know the difference before pride, hope, fear and accumulated investment make us incapable of seeing it.
Leadership is not simply knowing that sometimes we must persevere and sometimes we must quit.
Everyone knows that.
The difficult task of leadership is knowing which situation we are in.
A good leader knows how to pursue victory.
A better leader knows how much he can afford to lose in pursuing it.
The best leader knows the difference between the donkey’s tail and the dead horse —
and knows when to stop losing.