As you can imagine, I’ve seen some complex environments during the past twenty-five years, working with leadership teams to develop and implement their strategic direction. Today’s environment ranks up there with the most disruptive.
Supply chain disruptions, cost increases, margin pressure, yet another wave of technological innovation, and the continual barrage of policy changes are, once again, creating a perfect storm of uncertainty. Add to this the ongoing political polarization across Western democracies and economic indicators sending mixed signals about inflation and interest rates.
Still, investors expect growth, donors expect to see a mission impact, and employees seek clarity and confidence from their leaders.
Whether you're growing a business or managing a nonprofit, you know the tension of working to a plan when its goals look at risk.
The most dangerous approach to take is "wait and see". Today’s leaders know they must drive execution on the best-case plan and be prepared to guide their organization through volatility when necessary. The savvy approach involves embracing the reality of a high-change environment by setting clear goals and defining triggers to initiate contingency plans in response to changing conditions.
The process of preparing for such strategic leadership is called scenario planning and should be a step in all strategic and annual planning today.
According to the MIT Sloan Management Review's Special Report on Strategic Resilience (January 2025), organizations that implement basic scenario planning are 3.2 times more likely to meet or exceed their growth targets during periods of high volatility.
Scenario planning’s time has come. It is no longer a “nice to have” planning luxury, but a vital exercise for sustaining a competitive advantage.
Research across the US, Canada, Australia, and UK markets reveals several critical trends affecting both businesses and non-profits:
For growth-stage organizations, whether for-profit or non-profit, six critical uncertainties will define your trajectory according to the World Economic Forum's 2025 Risk Report:
Rather than complex modeling requiring teams of analysts, entrepreneurial organizations can develop powerful scenarios using this streamlined approach developed by the Strategic Foresight Initiative at Columbia University (2023):
From the six uncertainties above, select the two that would most dramatically impact your growth trajectory. For example, a SaaS company might select "resource availability" and "competitive landscape" as its axes, while a non-profit might choose "funding volatility" and "political stability" as its primary uncertainties.
Draw a simple 2×2 matrix with your uncertainties as axes.
For each quadrant, develop a brief but vivid description of what this future looks like:
Scenario A Example: "The Expansion Opportunity" (Abundant funding + Supportive policy environment) In this future, both grants and donations flow freely while government policies actively support your mission area. Growth requires rapid scaling to meet heightened expectations from funders and communities. Impact measurement becomes increasingly important as more organizations enter your space.
Scenario B Example: "The Independent Path" (Abundant funding + Restrictive policy environment) Funding is plentiful from private sources, but government policies create barriers to certain programs. Strategic independence becomes critical as you may need to shift away from government partnerships. Messaging and public advocacy take on heightened importance.
Scenario C Example: "The Partnership Imperative" (Limited funding + Supportive policy environment) Private funding becomes scarce while government remains supportive of your mission area. Strategic public-private partnerships become essential to sustainability. Operational efficiency and clear impact metrics become crucial for standing out in a competitive funding environment.
Scenario D Example: "The Focus Mandate" (Limited funding + Restrictive policy environment) Both private and public funding become constrained for your mission area. Program focus and operational efficiency become paramount. Organizations that can demonstrate a clear, measurable impact on their core constituency will survive, while others may need to merge or close programs.
For each scenario, identify one distinct strategic response:
The key to scenario planning is knowing which future is emerging. The Harvard Business Review (September 2024) recommends identifying 2-3 specific, observable signals for each scenario:
Use this generic list as a starting point to generate triggers that would initiate one of your four scenarios.
Use Scenarios to Develop Contingency Plans.
A contingency plan is a proactive strategy developed to address specific disruptive events or conditions that might occur in the future. Unlike general strategic plans that guide normal operations, contingency plans are specifically designed to be activated when particular triggers or thresholds are reached, allowing organizations to respond quickly and effectively to changes in their environment.
In the context of scenario planning, a contingency plan is the operational response to a specific scenario becoming a reality. While scenarios help you imagine and prepare for multiple possible futures, contingency plans provide the detailed roadmap for navigating a particular future once it begins to emerge.
The best contingency plans are:
During any stage of scenario planning, teams will identify insights into how existing plans and priorities can be improved. These insights should be carefully examined and integrated into existing plans, accompanied by a clear rationale and a reasonable timetable. [Review our free mini-tutorial on Strategic Decision Making.]
Remember, times of high change increase anxiety. Quick changes that are not well understood can increase fear and reduce productivity.
Quarterly reviews of plans, scenario triggers, and insights from scenario planning are strongly recommended.
Marissa Chen, founder of CommunityForward, a non-profit focused on workforce development for underserved communities, faced devastating uncertainty when government funding priorities shifted unexpectedly in 2023.
Instead of panicking, Chen gathered her 15-person team for a one-day scenario planning exercise. They identified four possible futures based on the uncertainties of "government funding" and "corporate partnership interest."
One scenario they developed—"Corporate Champion"—envisioned businesses rapidly increasing their DEI and community development commitments while government funding remained constrained. Though this seemed unlikely, they created a contingency plan for this scenario, including a new corporate partnership program focused on skills-based volunteering and hiring pipelines.
Six months later, when a major policy shift reduced their government grants, several major employers in their area simultaneously announced ambitious social impact initiatives, exactly as the "Corporate Champion" scenario had anticipated.
A case study published in the Stanford Social Innovation Review (Spring 2024) documented that because CommunityForward had already begun developing its corporate partnership model, it launched within three weeks, while similar organizations scrambled to adapt. The organization expanded its impact by 65% while other non-profits in their sector experienced an average 18% reduction in program reach.
"Scenario planning wasn't just a theoretical exercise—it was the reason we expanded our impact while other non-profits struggled," says Chen. "We weren't smarter than other organizations; we just had already thought through the possibilities and were prepared to act."
The volatility entrepreneurial leaders face isn't going away, but it doesn't have to derail your growth plans. By spending just a few hours developing scenarios, you transform uncertainty from a threat to an opportunity.
Start today with these actions:
What scenario planning techniques have worked for your organization? Share your experiences in the comments below.
Need help developing your scenarios? Schedule a free mini consultation with one of our team.