Business leaders spend a great deal of time trying to make the right call. Should the company hire aggressively or conserve cash? Expand into a new market or strengthen what already works? Raise prices now or wait? Most decisions arrive wrapped in uncertainty, which means even experienced executives sometimes discover that a strategy that looked sensible in a conference room becomes far messier once real-world conditions change.
That uncertainty is one reason Ryan McCorvie, Berkeley-based founder of Martingale AI, has spent much of his career thinking about probabilities, forecasting, and risk. Across finance, public health modeling, and statistical consulting, McCorvie’s work reflects a practical reality of leadership. Smart decisions rarely come from pretending uncertainty does not exist. They tend to improve when leaders deliberately ask difficult questions before committing resources.
In business, one of the clearest ways to do that is through stress-testing decisions. The phrase may sound technical, but the idea is surprisingly simple. Before moving forward, companies pressure-test assumptions by asking, “What happens if things go worse than expected?” or “How would this decision hold up if one or two major variables suddenly changed?”
Stress Testing Helps Leaders Prepare for Problems Before They Become Expensive
Many businesses unknowingly build plans around optimistic assumptions.
Revenue projections assume customers will behave as expected. Hiring plans depend on growth targets arriving on time. Inventory purchases rely on confidence that demand will remain steady. Sometimes those assumptions prove right. Sometimes they quietly drift off course until the consequences become costly.
Stress testing introduces discipline into that process. Instead of relying on a single forecast, leadership teams examine how a decision performs under pressure. What happens if sales come in 15% lower than expected? What if supply costs rise? What if hiring slows or financing becomes more expensive?
The goal is not pessimism. It is preparation.
Researchers and business strategists have long framed stress testing as a way to understand how organizations respond under adverse conditions rather than simply relying on a best-case projection. In practical terms, it gives leaders a chance to see where plans become fragile before real money, time, or credibility are on the line.
Strong Companies Often Ask “What If?” Earlier Than Everyone Else
One reason stress testing matters is that business disruptions rarely arrive with warning labels. Consider the oil crisis of the 1970s and the example frequently associated with Shell. The company became widely known for using scenario planning to prepare for energy shocks rather than assuming stable market conditions would continue indefinitely. When major disruptions reshaped the energy sector, Shell was better positioned than many competitors because leadership had already explored alternative futures instead of planning around one preferred outcome. More recently, scenario planning has become increasingly common across industries as leaders face volatility tied to supply chains, interest rates, labor shortages, and geopolitical uncertainty.
The broader lesson applies even to smaller organizations. A regional healthcare group deciding whether to expand offices, a manufacturing business considering new equipment, or a growing software firm weighing hiring plans can all benefit from testing assumptions before spending heavily.
McCorvie’s work repeatedly points toward this type of probabilistic thinking. Rather than treating forecasts as guarantees, better decisions emerge when leaders ask what range of outcomes is realistic and whether a plan remains resilient if conditions shift.
Stress Testing Often Improves Decision Quality Even When Nothing Goes Wrong
One misconception about stress testing is that it only matters during crises.
In reality, companies often benefit from the exercise even when conditions remain favorable because it sharpens thinking. Teams become clearer about the assumptions driving growth plans. Weak points surface earlier. Leadership discussions become more grounded because people stop arguing over certainty and start talking about probabilities and tradeoffs.
A useful modern example emerged during the economic disruptions of the early 2020s. Companies with multiple planning scenarios in place generally adjusted faster to supply chain disruptions, labor shortages, and rapid shifts in customer behavior because they had already explored downside possibilities instead of scrambling from scratch. Business publications and strategy researchers increasingly describe scenario planning and stress testing as less of a defensive tactic and more of an operating habit for resilient organizations.
That mindset matters because costly mistakes often happen when businesses commit too heavily to one assumed future.
Ryan McCorvie on Why Better Decisions Start With Better Questions
Stress testing does not eliminate uncertainty, and it cannot predict every disruption. Markets still shift unexpectedly. Customers behave unpredictably. Competitors make surprising moves.
What it can do is slow down overly confident thinking.
A leadership team considering a large investment might ask: What would make this decision fail? Which assumptions matter most? If revenue slowed for six months, would the business still feel comfortable with this strategy? Those questions sound simple, yet they often uncover blind spots that optimism alone tends to miss.
For Ryan McCorvie, whose work sits at the intersection of probability, modeling, and decision-making, that type of thinking reflects something larger than mathematics. It reflects discipline. Businesses rarely outperform because they avoid uncertainty altogether. More often, they perform better because they prepared for uncertainty before it arrived.
