In uncertain times, scenario planning can help mission-driven organizations stay grounded in vision and values as you plan ahead. Scenario planning is a strategic process for managing unknowns so you can prepare for a range of possibilities. It helps you develop a strategic response to a known risk that could impact your organization. As the future unfolds, you can be as ready as possible and act decisively.
We can’t predict the future, but we can think through possibilities. And that process of thinking through possibilities helps us surface questions, act with intention, and make thoughtful decisions.
While scenario planning can feel daunting, it doesn’t have to be overly complicated. If you’ve ever packed something for a trip “just in case,” you’ve done a very simple version of scenario planning.
After reading this guide, use our 5-Step Scenario Planning Tool to construct scenarios and outline action plans.
Reach out to us if you’d like a skilled practitioner to facilitate a scenario planning workshop with your team.
When to Scenario Plan
If you find yourself grappling with (and losing sleep over) a bunch of “what if” questions, it’s probably time for scenario planning.
Questions like:
- What if we don’t raise enough money for next year?
- What if my team loses staff?
- What if the courts/voters decide X?
- What if we don’t get enough volunteers for Y?
Scenario planning is the “then” to your “what if.”
How to Scenario Plan: 5 Steps
Your goal is to be as ready as possible for a range of circumstances. You do this by coming up with stories about a plausible future so that you can plan your responses. The steps below help you turn questions into stories, name impacts or considerations, and think through actions you might take if your story becomes reality.
1. Name the unknown.
Usually, scenario planning is necessary when you have a major unknown that could have significant impacts on your organization’s finances, programs, and/or staff. For example, “Will we lose a significant amount of funding this year?” Other common unknowns include election outcomes, legal rulings, or legislative changes.
To keep it simple, we recommend starting with the most consequential unknown.
2. Identify 2-3 scenarios (“What if…”)
Once you’ve identified your most consequential unknown, list two or three ways things could play out over a 6-12 month horizon. These are the start of your stories. To get started, try naming an optimistic one, a pessimistic one, and one in between by completing the sentence, “What if….?”
If funding is the area of uncertainty, you might have the following scenarios:
- What if we get the same amount as last year
- What if we see a slight drop of $X or X%
- What if we see a significant drop greater than $Y or Y%
3. Name the potential impacts
Once you’ve identified plausible stories (“what ifs”), name some of the impacts you want to address, prevent, or leverage. Consider programmatic, financial, and people impacts.
In the scenario where you see a slight drop in funding, you might say: losing $XX in funding wouldn’t significantly impact our programming or people over the next 6-12 months, but it would require dipping into our reserves to make up a $YY shortfall.
4. Define your overall approach and possible actions
With your potential impacts in hand, it’s time to explore at least one of your scenarios. Start with just one, either the most likely or the most pessimistic.
Ask yourself and those you consult, “If X came true, what would we do?”
Start with a simple statement that captures your overall strategy and approach. For example, you might say, “If we see a slight drop in funding, we will focus on cultivating new major donors and small foundation sources, while identifying non-staff expense savings.”
Then, surface actions that align with this approach. They don’t need to be perfect or set in stone—the purpose of this step is to generate ideas you’ll refine later.
Consider:
- Immediate next steps. If you find yourself in this scenario, what are the 1-3 immediate steps you’d take? For example, “request a cost and savings analysis for ending our office lease” or “talk to our base to find out their most critical needs.” Assign owners and timelines..
- “No regrets” moves. Are there any moves you could make right now (or soon!) to set yourself up for greater success, regardless of the scenario? For example, reviewing your balance sheet with your leadership team or scheduling calls with major donors to continue relationship-building would benefit your organization regardless of your funding outcome.
In a pessimistic funding scenario, some possible actions might be:
- Reduce senior team salaries by 10%
- Downsize our office space when the lease ends
- Freeze all hiring
More tips
- Consider choice points. As you think about actions, look for opportunities to advance equity and inclusion, mitigate bias, and avoid unintended consequences.
- Don’t just be reactive—get creative. Consider actions that might feel unrealistic, far-fetched, or even ridiculous. For example, in a pessimistic funding scenario you might launch a capital campaign or even explore a merger with another organization.
- Spot silver linings. Scenario planning isn’t just about mitigating risks; it’s also for finding new opportunities. Consider actions that could further your mission and deepen your impact.
5. Figure out when to activate
Once you’ve completed steps 1-4 for each scenario, you have a simple scenario plan. The final step is to figure out when you’ll take your plan off the shelf and put it into action.
- Indicators. Assign an owner to keep track and periodically report back to your decision makers. An indicator might be: “percentage of major donors who’ve committed to renewing for next year” or “$XX in new funds committed.” Ask: What are the signals that tell you whether you’re in scenario A versus scenario C? What news, data, or information do you need to follow?
- Decision points. Based on your indicators, identify decision-making triggers. For example, “If >50% of major donors are still non-committal by June, move forward with ending our lease and canceling campaigns.”
Gather Input and Communicate Your Plan
There are some things you shouldn’t do completely on your own—scenario planning is one of them. For any plan, you’ll need to decide what you’ll share and with whom, along with how and when. You also need to figure out who to bring in at different stages of the process to get ideas and input.
Gathering Input
There’s no way to successfully plan for your team or organization’s future without hearing others’ perspectives. The higher the stakes, the more important it is to gather input.
For each step of the process (including this one!), keep these questions in mind:
- Who should I get input from? Who on my team:
- Has more knowledge or direct experience
- Might disagree with me
- Could help test my assumptions
- Could spot equity implications that I might miss
- When I ask ___ for input, what decision-making mode should I be in?
- What’s the best way for me to gather input about this? (Some options include a 1-1 conversation, a survey, a team meeting, or a half-day retreat.)
Tips for Communicating
- Decide your “degree of disclosure.” Not everyone needs all the details. Consider these options:
- Level 1: Everyone knows the basics of the scenarios, but only a few are privy to detailed action plans.
- Level 2: Staff are consulted on the scenarios (through surveys, team meetings, or other mechanisms) and offer input on action plans. For example, you ask each department leader to sit down with their teams to dive into the programmatic aspects of the scenarios and contribute ideas.
- Level 3: Full transparency. Everyone sees the full plan.
- Keep your board or advisory group in the loop. Proactively seek board/advisor help to test your thinking and strategize (e.g., introducing partnerships, seeking new sources of funding, etc.). Building relationships and buy-in is even more crucial when you’re facing high-stakes decisions.
- Share your overall approach before getting into details. Before getting into the nitty gritty of your plan(s), share the principles or values that guided your planning.
Ready to get started?
Download our 5-Step Scenario Planning Tool. Set aside a day with your leadership team or a trusted partner and fill it out together. Or reach out to us if you’d like a skilled practitioner to facilitate a scenario planning workshop with your team.
The Management Center is a 501c3 organization that helps leaders working for social change build equitable, sustainable, and results-driven organizations via trainings coaching, and online resources and tools.