Return to Pandemic Playbook main page

Please send suggestions to improve this playbook to pandemic@umbrex.com

 

SCENARIO PLANNING

Why Scenario Planning? In the absence of a scenario to anchor on, most of us will anchor on the most pessimistic doomsday scenario which frankly no business (even JP Morgan) can handle. So, the following exercise will help you gain perspective about how to act as the crisis unfolds in the coming months.

Step 1: Develop 3 scenarios for the business environment in the next 12 months

 Step 2: Do not waste time trying to figure out the probability of each scenario; the details of the scenarios are not as important as the actions to be taken in adversity. The scenario details are only an aid to get to the action steps.

 Step 3: Under each scenario, evaluate what are the most powerful actions you can take under 4 headings

  1. Sources of revenue (partnerships, new products/services etc)
  2. Cost-cutting: Cutting fixed costs, variable costs
  3. Fund Raising – equity, revolving loans, credit lines from traditional and government sources. . Alternative sources of credit eg P2P lending.
  4. Strategic actions – partnerships, ownership dilution, asset sell-off, insurance coverage.

 Step 4: Calibration – Once you have action steps for each scenario, re-assign these action steps as

 Normally an exercise like this would take 6-10 weeks to assemble. We have provided this outline to help you come up with an action plan over a 3-hour brainstorming session.

RESOURCES

Contributors:

Jayanth Krishnan