The three-scenario method
The method needs no calculations. It helps you put your thoughts in order. Describe three ways events could unfold.
- Worst. Imagine that everything has gone wrong. What losses will you suffer: money, time, reputation, relations with partners? Do not estimate the probability; just describe “rock bottom” honestly.
- Most likely. The outcome that you feel is most likely to happen. What results will it lead to?
- Best. What happens if everything works out perfectly. This is what you will aim for.
Two questions that give the answer
Next comes the main part. Take the most likely scenario and ask:
- Does it lead to my goal? If the likely outcome does not bring you closer to the reason you are starting the project, do not go in, even if you have no fears.
- If the answer is “yes”, move on to the worst scenario: can I survive this? Will the business stay standing, and will I avoid losing everything? If the answer here is also “yes”, you can make the decision: you can withstand the worst, and the likely outcome leads to the goal.
Three scenarios and two questions give clarity in minutes, in situations where there is neither the data nor the time for a full analysis.
I used this method back at Beeline, when I assessed the risks of IT projects and startups: their scale did not always allow a deep analysis, and the decision to go in had to be made quickly.
Frequently asked questions
When is the three-scenario method appropriate?
When you need a quick decision under uncertainty, with no precise data and no time for complex models. For large, expensive decisions, it is combined with a quantitative risk assessment.
How is this different from a full risk analysis?
It is a quick tool for speed and clarity. It does not replace a detailed analysis, but it protects against the main mistake: entering a project that does not lead to the goal even in the likely scenario, or is fatal in the worst case.
From the risk register to management decisions
Check whether your risks reach the people who make decisions. The dashboard shows the status on one screen; the turnkey system makes it work in practice.
