Scenario War Room

# Scenario War Room Model cascading what-if scenarios across all business functions. Not single-assumption stress tests — compound adversity that shows how one problem creates the next. ## Keywords scenario planning, war room, what-if analysis, risk modeling, cascading effects, compound risk, adversity planning, contingency planning, stress test, crisis planning, multi-variable scenario, pre-mortem ## Quick Start ```bash python scripts/scenario_modeler.py # Interactive scenario builder with cascade modeling ``` Or describe the scenario in natural language: > "What if we lose our top customer AND miss the Q3 fundraise?" > "What if 3 engineers quit AND we need to ship by Q3?" > "What if our market shrinks 30% AND a competitor raises $50M?" ## What This Is Not - **Not** a single-assumption stress test (that's `/em:stress-test`) - **Not** financial modeling only — every function gets modeled - **Not** worst-case-only — models 3 severity levels - **Not** paralysis by analysis — outputs concrete hedges and triggers ## Framework: 6-Step Cascade Model ### Step 1: Define Scenario Variables (max 3) State each variable with: - **What changes** — specific, quantified if possible - **Probability** — your best estimate - **Timeline** — when it hits ``` Variable A: Top customer (28% ARR) gives 60-day termination notice Probability: 15% | Timeline: Within 90 days Variable B: Series A fundraise delayed 6 months beyond target close Probability: 25% | Timeline: Q3 Variable C: Lead engineer resigns Probability: 20% | Timeline: Unknown ``` ### Step 2: Domain Impact Mapping For each variable, each relevant role models impact: | Domain | Owner | Models | |--------|-------|--------| | Cash & runway | CFO | Burn impact, runway change, bridge options | | Revenue | CRO | ARR gap, churn cascade risk, pipeline | | Product | CPO | Roadmap impact, PMF risk | | Engineering | CTO | Velocity impact, key person risk | | People | CHRO | Attrition cascade, hiring freeze implications | | Operations | COO | Capacity, OKR impact, process risk | | Security | CISO | Compliance timeline risk | | Market | CMO | CAC impact, competitive exposure | ### Step 3: Cascade Effect Mapping This is the core. Show how Variable A triggers consequences in domains that trigger Variable B's effects: ``` TRIGGER: Customer churn ($560K ARR) ↓ CFO: Runway drops 14 → 8 months ↓ CHRO: Hiring freeze; retention risk increases (morale hit) ↓ CTO: 3 open engineering reqs frozen; roadmap slips ↓ CPO: Q4 feature launch delayed → customer retention risk ↓ CRO: NRR drops; existing accounts see reduced velocity → more churn risk ↓ CFO: [Secondary cascade — potential death spiral if not interrupted] ``` Name the cascade explicitly. Show where it can be interrupted. ### Step 4: Severity Matrix Model three scenarios: | Scenario | Definition | Recovery | |----------|------------|---------| | **Base** | One variable hits; others don't | Manageable with plan | | **Stress** | Two variables hit simultaneously | Requires significant response | | **Severe** | All variables hit; full cascade | Existential; requires board intervention | For each severity level: - Runway impact - ARR impact - Headcount impact - Timeline to unacceptable state (trigger point) ### Step 5: Trigger Points (Early Warning Signals) Define the measurable signal that tells you a scenario is unfolding **before** it's confirmed: ``` Trigger for Customer Churn Risk: - Sponsor goes dark for >3 weeks - Usage drops >25% MoM - No Q1 QBR confirmed by Dec 1 Trigger for Fundraise Delay: - <3 term sheets after 60 days of process - Lead investor requests >30-day extension on DD - Competitor raises at lower valuation (market signal) Trigger for Engineering Attrition: - Glassdoor activity from engineering team - 2+ referral interview requests from engineers - Above-market offer counter-required in last 3 months ``` ### Step 6: Hedging Strategies For each scenario: actions to take **now** (before the scenario materializes) that reduce impact if it does. | Hedge | Cost | Impact | Owner | Deadline | |-------|------|--------|-------|---------| | Establish $500K credit line | $5K/year | Buys 3 months if churn hits | CFO | 60 days | | 12-month retention bonus for 3 key engineers | $90K | Locks team through fundraise | CHRO | 30 days | | Diversify to <20% revenue concentration per customer | Sales effort | Reduces single-customer risk | CRO | 2 quarters | | Compress fundraise timeline, start parallel process | CEO time | Closes before runways merge | CEO | Immediate | --- ## Output Format Every war room session produces: ``` SCENARIO: [Name] Variables: [A, B, C] Most likely path: [which combination actually plays out, with probability] SEVERITY LEVELS Base (A only): [runway/ARR impact] — recovery: [X actions] Stress (A+B): [runway/ARR impact] — recovery: [X actions] Severe (A+B+C): [runway/ARR impact] — existential risk: [yes/no] CASCADE MAP [A → domain impact → B trigger → domain impact → end state] EARLY WARNING SIGNALS - [Signal 1 → which scenario it indicates] - [Signal 2 → which scenario it indicates] - [Signal 3 → which scenario it indicates] HEDGES (take these actions now) 1. [Action] — cost: $X — impact: [what it buys] — owner: [role] — deadline: [date] 2. [Action] — cost: $X — impact: [what it buys] — owner: [role] — deadline: [date] 3. [Action] — cost: $X — impact: [what it buys] — owner: [role] — deadline: [date] RECOMMENDED DECISION [One paragraph. What to do, in what order, and why.] ``` --- ## Rules for Good War Room Sessions **Max 3 variables per scenario.** More than 3 is noise — you can't meaningfully prepare for 5-variable collapse. Model the 3 that actually worry you. **Quantify or estimate.** "Revenue drops" is not useful. "$420K ARR at risk over 60 days" is. Use ranges if uncertain. **Don't stop at first-order effects.** The damage is always in the cascade, not the initial hit. **Model recovery, not just impact.** Every scenario should have a "what we do" path. **Separate base case from sensitivity.** Don't conflate "what probably happens" with "what could happen." **Don't over-model.** 3-4 scenarios per planning cycle is the right number. More creates analysis paralysis. --- ## Common Scenarios by Stage **Seed:** - Co-founder leaves + product misses launch - Funding runs out + bridge terms unfavorable **Series A:** - Miss ARR target + fundraise delayed - Key customer churns + competitor raises **Series B:** - Market contraction + burn multiple spikes - Lead investor wants pivot + team resists ## Integration with C-Suite Roles | Scenario Type | Primary Roles | Cascade To | |--------------|---------------|------------| | Revenue miss | CRO, CFO | CMO (pipeline), COO (cuts), CHRO (layoffs) | | Key person departure | CHRO, COO | CTO (if eng), CRO (if sales) | | Fundraise failure | CFO, CEO | COO (runway extension), CHRO (hiring freeze) | | Security breach | CISO, CTO | CEO (comms), CFO (cost), CRO (customer impact) | | Market shift | CEO, CPO | CMO (repositioning), CRO (new segments) | | Competitor move | CMO, CRO | CPO (roadmap response), CEO (strategy) | ## References - `references/scenario-planning.md` — Shell methodology, pre-mortem, Monte Carlo, cascade frameworks - `scripts/scenario_modeler.py` — CLI tool for structured scenario modeling