{"id":6841,"date":"2020-05-05T18:15:47","date_gmt":"2020-05-05T23:15:47","guid":{"rendered":"http:\/\/www.managementcenter.org\/?post_type=resources&#038;p=6841"},"modified":"2025-08-13T17:41:11","modified_gmt":"2025-08-13T17:41:11","slug":"scenario-planning","status":"publish","type":"resources","link":"https:\/\/www.managementcenter.org\/resources\/scenario-planning\/","title":{"rendered":"Managing Uncertainty: A Guide to Scenario Planning"},"content":{"rendered":"\n<p>In uncertain times, scenario planning can help mission-driven organizations stay grounded in vision and values as you plan ahead. <strong>Scenario planning is a strategic process for managing unknowns so you can prepare for a range of possibilities. <\/strong>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.<\/p>\n\n\n\n<p><strong>We can&#8217;t predict the future, but we can think through possibilities.<\/strong> And that process of thinking through possibilities<strong> <\/strong>helps us surface questions, act with intention, and make thoughtful decisions.<\/p>\n\n\n\n<p>While scenario planning can feel daunting,<strong> it doesn\u2019t have to be overly complicated. <\/strong>If you\u2019ve ever packed something for a trip \u201cjust in case,\u201d you\u2019ve done a very simple version of scenario planning.<\/p>\n\n\n\n<p>After reading this guide, use our <a href=\"https:\/\/www.managementcenter.org\/resources\/5-box-scenario-planning-tool\/\" target=\"_blank\" rel=\"noreferrer noopener\">5-Step Scenario Planning Tool<\/a> to construct scenarios and outline action plans.<\/p>\n\n\n\n<p><a href=\"http:\/\/managementcenter.org\/coaching\/\" target=\"_blank\" rel=\"noreferrer noopener\">Reach out to us<\/a> if you\u2019d like a skilled practitioner to facilitate a scenario planning workshop with your team.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>When to Scenario Plan<\/strong><\/h2>\n\n\n\n<p>If you find yourself grappling with (and losing sleep over) a bunch of \u201cwhat if\u201d questions, it\u2019s probably time for scenario planning.&nbsp;<\/p>\n\n\n\n<p>Questions like:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What if we don\u2019t raise enough money for next year?<\/li>\n\n\n\n<li>What if my team loses staff?<\/li>\n\n\n\n<li>What if the courts\/voters decide X?<\/li>\n\n\n\n<li>What if we don\u2019t get enough volunteers for Y?<\/li>\n<\/ul>\n\n\n\n<p>Scenario planning is the \u201cthen\u201d to your \u201cwhat if.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How to Scenario Plan: 5 Steps<\/strong><\/h2>\n\n\n\n<p><strong>Your goal is to be as ready as possible for a range of circumstances. <\/strong>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.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Name the unknown.<\/strong><\/h3>\n\n\n\n<p>Usually, scenario planning is necessary when you have <strong>a major unknown that could have significant impacts on your organization\u2019s finances, programs, and\/or staff.<\/strong> For example, \u201cWill we lose a significant amount of funding this year?\u201d Other common unknowns include election outcomes, legal rulings, or legislative changes.<\/p>\n\n\n\n<p>To keep it simple, we recommend starting with the most consequential unknown.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Identify 2-3 scenarios (\u201cWhat if\u2026\u201d)<\/strong><\/h3>\n\n\n\n<p>Once you\u2019ve 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. <strong>To get started, try naming an optimistic one, a pessimistic one, and one in between by completing the sentence, \u201cWhat if\u2026.?\u201d<\/strong><\/p>\n\n\n\n<p>If funding is the area of uncertainty, you might have the following scenarios:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>What if we get the <strong>same amount<\/strong> as last year<\/li>\n\n\n\n<li>What if we see a <strong>slight drop<\/strong> of $X or X%<\/li>\n\n\n\n<li>What if we see a<strong> significant drop<\/strong> greater than $Y or Y%<\/li>\n<\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Name the potential impacts<\/strong><\/h3>\n\n\n\n<p>Once you\u2019ve identified plausible stories (\u201cwhat ifs\u201d), name some of the <strong>impacts you want to address, prevent, or leverage<\/strong>. Consider programmatic, financial, and people impacts.<\/p>\n\n\n\n<p>In the scenario where you see a slight drop in funding, you might say: losing $XX in funding wouldn\u2019t 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.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Define your overall approach and possible actions<\/strong><\/h3>\n\n\n\n<p>With your potential impacts in hand, it\u2019s time to <strong>explore at least one of your scenarios. <\/strong>Start with just one, either the most likely or the most pessimistic.<\/p>\n\n\n\n<p>Ask yourself and those you consult,<strong> \u201cIf X came true, what would we do?\u201d<\/strong><\/p>\n\n\n\n<p>Start with a simple statement that captures <strong>your overall strategy and approach. <\/strong>For example, you might say, \u201cIf 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.\u201d<\/p>\n\n\n\n<p>Then, surface <strong>actions that align with this approach<\/strong>. They don\u2019t need to be perfect or set in stone\u2014the purpose of this step is to generate ideas you\u2019ll refine later.<\/p>\n\n\n\n<p>Consider:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Immediate next steps. <\/strong>If you find yourself in this scenario, what are the 1-3 immediate steps you\u2019d take? For example, \u201crequest a cost and savings analysis for ending our office lease\u201d or \u201ctalk to our base to find out their most critical needs.\u201d Assign owners and timelines..&nbsp;<\/li>\n\n\n\n<li><strong>\u201cNo regrets\u201d moves. <\/strong>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.<\/li>\n<\/ul>\n\n\n\n<p>In a pessimistic funding scenario, some possible actions might be:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reduce senior team salaries by 10%<\/li>\n\n\n\n<li>Downsize our office space when the lease ends<\/li>\n\n\n\n<li>Freeze all hiring<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">More tips<\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Consider <\/strong><a href=\"https:\/\/www.managementcenter.org\/resources\/using-choice-points-to-advance-racial-equity-and-inclusion\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>choice points<\/strong><\/a><strong>. <\/strong>As you think about actions, look for opportunities to advance equity and inclusion, mitigate bias, and avoid unintended consequences.<\/li>\n\n\n\n<li><strong>Don\u2019t just be reactive\u2014get creative. <\/strong>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.<\/li>\n\n\n\n<li><strong>Spot silver linings.<\/strong> Scenario planning isn\u2019t just about mitigating risks; it\u2019s also for finding new opportunities. Consider actions that could further your mission and deepen your impact.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Figure out when to activate<\/strong><\/h3>\n\n\n\n<p>Once you\u2019ve completed steps 1-4 for each scenario, you have a simple scenario plan. The final step is to figure out when you\u2019ll take your plan off the shelf and put it into action.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Indicators. <\/strong>Assign an owner to keep track and periodically report back to your decision makers. An indicator might be: \u201cpercentage of major donors who\u2019ve committed to renewing for next year\u201d or \u201c$XX in new funds committed.\u201d Ask: What are the signals that tell you whether you\u2019re in scenario A versus scenario C? What news, data, or information do you need to follow?<\/li>\n\n\n\n<li><strong>Decision points.<\/strong> Based on your indicators, identify decision-making triggers. For example, \u201cIf &gt;50% of major donors are still non-committal by June, move forward with ending our lease and canceling campaigns.\u201d<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Gather Input and Communicate Your Plan<\/strong><\/h2>\n\n\n\n<p>There are some things you shouldn\u2019t do completely on your own\u2014scenario planning is one of them. <strong>For any plan, you\u2019ll need to decide <em>what<\/em> you\u2019ll share and with <em>whom<\/em>, along with <em>how<\/em> and <em>when<\/em>.<\/strong> You also need to figure out who to bring in at different stages of the process to get ideas and input.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Gathering Input<\/strong><\/h3>\n\n\n\n<p>There\u2019s no way to successfully plan for your team or organization\u2019s future without hearing others\u2019 perspectives. <strong>The higher the stakes, the more important it is to gather input.<\/strong><\/p>\n\n\n\n<p>For each step of the process (including this one!), keep these questions in mind:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Who should I get input from? Who on my team:\n<ul class=\"wp-block-list\">\n<li>Has more knowledge or direct experience<\/li>\n\n\n\n<li>Might disagree with me<\/li>\n\n\n\n<li>Could help test my assumptions<\/li>\n\n\n\n<li>Could spot equity implications that I might miss<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>When I ask ___ for input, what <a href=\"https:\/\/www.managementcenter.org\/resources\/modes-decision-making\/\" target=\"_blank\" rel=\"noreferrer noopener\">decision-making mode<\/a> should I be in?<\/li>\n\n\n\n<li>What\u2019s 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.)<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Tips for Communicating<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Decide your \u201cdegree of disclosure.\u201d <\/strong>Not everyone needs all the details. Consider these options:\n<ul class=\"wp-block-list\">\n<li><em>Level 1:<\/em> Everyone knows the basics of the scenarios, but only a few are privy to detailed action plans.<\/li>\n\n\n\n<li><em>Level 2: <\/em>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.<\/li>\n\n\n\n<li><em>Level 3: <\/em>Full transparency. Everyone sees the full plan.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Keep your board or advisory group in the loop. <\/strong>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\u2019re facing high-stakes decisions.<\/li>\n\n\n\n<li><strong>Share your overall approach before getting into details.<\/strong> Before getting into the nitty gritty of your plan(s), share the principles or values that guided your planning.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Ready to get started?<\/strong><\/h2>\n\n\n\n<p>Download our <a href=\"https:\/\/www.managementcenter.org\/resources\/5-box-scenario-planning-tool\/\" target=\"_blank\" rel=\"noreferrer noopener\">5-Step Scenario Planning Tool<\/a>. Set aside a day with your leadership team or a trusted partner and fill it out together. Or <a href=\"http:\/\/managementcenter.org\/coaching\/\" target=\"_blank\" rel=\"noreferrer noopener\">reach out to us<\/a> if you\u2019d like a skilled practitioner to facilitate a scenario planning workshop with your team.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Scenario planning doesn\u2019t have to be complicated. This guide to scenario planning will help you get started. Includes a template.<\/p>\n","protected":false},"author":14,"featured_media":10397,"template":"","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"tags":[],"resource_types":[48],"topic":[46,37],"collection":[65,25],"class_list":["post-6841","resources","type-resources","status-publish","has-post-thumbnail","hentry","resource_types-article-publication","topic-other-topics","topic-roles-and-goals","collection-decision-making","collection-managing-uncertainty"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Guide to Scenario Planning - The Management Center<\/title>\n<meta name=\"description\" content=\"This guide for nonprofit and educational leaders will help you get started with simple scenario planning.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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