The Dead Horse Concept in Business

The Dead Horse Theory is a blunt management parable that gets attributed to the “tribal wisdom of the Dakota Indians.” It’s not a verified historical Dakota teaching, but modern business culture uses the framing of it to make the lesson hit harder. The core saying of it is that when you discover that you are riding a dead horse, the best strategy is to dismount from it. The simple logic here is that if the horse is dead, no amount of effort will make it run. Get off. Find a new horse.

What Organizations or Businesses Actually Do Instead?

The theory lists the absurd “advanced strategies” companies, governments, and teams use to avoid admitting the horse is dead:

1. Buy a stronger whip – Push harder, yell louder, demand more from a system that physically can’t deliver.

2. Change riders – Fire the manager/trader/employee and put a new person on the same dead horse.

3. Appoint a committee – Study the horse for 6 months and release a 300-page report confirming it’s dead.

4. Visit other companies to see how they ride their dead horses.

5. Lower expectations – Say “we’ll just trot, not gallop”.

6. Rebrand it – Declare the horse “living-impaired” instead of dead.

7. Throw money at it – Increase funding, buy new software, add resources to a failed model.

8. Training – Send the rider to a course because they “don’t know how to ride dead horses properly”.

9. Harness multiple dead horses together – Scale the failure.

10. Say “this is the way we’ve always done it”.

How does the Dead Horse relate to the world of Business?

A “dead horse” = any product, process, project, strategy, or business model that is no longer viable but is kept alive by ego, sunk costs, or politics.

Real examples:

• (a) Blockbuster vs Netflix: Blockbuster kept “whipping” physical stores + late fees instead of dismounting to streaming.

• (b) Kodak: Invented the digital camera, then buried it to protect film sales. Rode the film horse until it died.

• (c) Trading: This ties to your $12 account questions. A dead horse is a strategy/pair/timeframe that consistently loses money. “Changing riders” = tweaking indicators endlessly. “Stronger whip” = adding leverage. Dismounting = stopping that strategy and testing a new one.

• (d) Projects: Keeping a product with zero performance alive because “we spent 2 years building it!”

Key Fundamental Lessons

1. Sunk cost fallacy is expensive: Money/time already spent is gone. It should not justify future spending. If the expected value is negative, dismount. Doesn’t matter if you spent $100k or 3 years.

2. Speed of dismounting is a competitive advantage: The faster you recognize and kill failing initiatives, the more capital/time you free for live horses. Amazon calls this “disagree and commit, but know when to reverse.”

3. Activity ≠ Progress: Committees, reorgs, rebrands, and training feel like action. If the core premise is dead, they just burn resources.

4. Define “dead” before you start: Set kill criteria upfront. “If this strategy loses 3 times in a row, it’s dead.” If it cannot be fixed, dismount.” Without it, hope takes over.

5. Culture must reward dismounting: Most companies punish failure, so people hide “dead horses”. Good cultures reward “intelligent fast failure.” In trading, same idea: cutting losses fast is the skill!

6. “We’ve always done it this way” is a eulogy: Markets, tech, and customers change. A horse that won races in 2015 can be dead in 2026.

7. Opportunity cost is the real killer: Every day riding a dead horse = a day not finding/riding a live one. For your $12 account, every trade on a broken strategy delays you from finding one with an edge. Dismounting feels like failure, but it’s actually capital allocation. The best operators dismount early, often, and without emotion. The worst buy stronger whips and schedule more meetings! In your line of business, have you encountered dead horse scenarios? How did you deal with them?

Professor Mufaro Gunduza coaches and mentors Business Intelligence at Mount Carmel Institute (Harare), Indian School of Management (New Mumbai), and UNISA, among others. He is the SADC Investments Advisor for the Future Trends Group. He has written several books, including Unleashing Blue Sky Thinking, Spotting Business Opportunities, and Big Picture Thinking (Bookboon Publishers, London & Denmark). He has just assumed the Presidency of the Southern African Chamber of Commerce. He can be contacted on WhatsApp: +263774868896, Phone: +263718925350, Email: mgunduza@yahoo.co.uk.

Dead Horse Theory in Business