Article 11 of 15 - Strategy That Lasts (May 2026)

Virtu and Fortuna: The Limits of Strategic Control

After Niccolo Machiavelli, The Prince (1513/1532) - Chapter XXV. Decouple decision quality from outcome quality, and build the dykes before the flood.

Primary source quotation

"Fortune is the arbiter of one-half of our actions, ... but ... she still leaves us to direct the other half, or perhaps a little less." - Niccolo Machiavelli, The Prince, Chapter XXV (Marriott trans., 1908; public domain, Project Gutenberg #1232)

Panel 1 - Decision / Outcome Classifier

Twelve illustrative business decisions. Mark each one along two axes: was the decision process good, and was the outcome good? The 2x2 fills in. The headline counts the off-diagonal share - the share where decision and outcome disagree, i.e. where luck (good or bad) dominated.

- Off-diagonal share
(luck dominated) Classify decisions to see the split.

Panel 2 - Dyke Simulator

Machiavelli's flooded-river analogy as a function. Capability built in advance (cash reserves, scenario rehearsal, optionality) is the dyke. Shock magnitude is the flood. The form-locked firm sheds value steeply under shock; the virtu-aligned firm bends and absorbs. Move both sliders and watch the gap.

50
0 = no reserves, no rehearsals. 100 = full dry powder, every scenario pre-walked.
70
0 = no shock. 100 = full-magnitude environmental hit (recession, tariff, supply break).
Form-locked
50.50
Virtu-aligned
91.25
Virtu gap
40.75

Panel 3 - Process vs Outcome Scoreboard

Log your own recent strategic decisions. For each one, judge the process and the outcome separately. Your scoreboard tracks how often you call them differently - the metric Tetlock's superforecasters spend years training.

Was the decision process good?
Was the outcome good?
- Independent judgments
(process and outcome scored differently) Log a decision to begin.