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Libby Marks

New to Scenario Planning? Here's a Starter's Guide

By taking the time to do scenario planning, businesses can make informed decisions in stressful times and reveal the biggest opportunities.

We’re all working in a faster-paced, more volatile landscape than before. Digital disruption, inflationary pressures, supply chain volatility. Business is more exposed to risk and change now than in previous years. 

For project-based businesses, this volatility means unpredictability. Clients may delay, cancel or change the scope of projects. Resources may be unavailable - whether that’s materials, equipment, or people.

This unpredictability is anathema to the rigorous planning that businesses like yours thrive on. It’s a risk to delivery, efficiency, and profitability. A change to just one project can have negative effects that ripple through the whole business. 

This is where scenario planning is invaluable. Scenario planning helps businesses prepare for the ‘what ifs’. 

  • What if Project A doesn’t materialize?
  • What if Project B suffers a major delay?
  • If we replace Project B with Project C, how does that affect Project D? 
  • Can we take on Project E right now? 

And in the current climate - unlike people and projects - ’what ifs’ are in high supply. 

Scenario planning helps project-based businesses prevent, mitigate or capitalize on these ‘what ifs’ to protect their operations and profits. 

But without the right tools and techniques, many struggle to do it effectively. Which is why we’ve written this guide 🙂

What is scenario planning?

Scenario planning is a strategic management process that helps organizations understand the impact of different situations on their business. They model different scenarios to predict how they will affect things like production, profitability, people requirements, etc. 

Through scenario planning, project-based businesses can be prepared for various ‘what if’ scenarios.

This helps you respond effectively to situations outside your control - such as project scope changes. Anticipating and planning for likely risks allows you to pivot faster, increasing your resilience and agility in a volatile market. 

Scenario planning also helps you proactively manage scenarios that are within your control. Like helping you pick the most profitable path to pursue. Such as the best combination of projects to onboard, or how to prioritize and schedule different projects. 

What are the four types of scenario planning?

There are four different types of scenario planning. These range from strategic horizon scanning for threats in the wider business landscape, to comparing specific scenarios at an operational level. 

While broadly similar, each type of scenario planning has a different objective, approach, and (often) stakeholders. Here’s an overview.

  1. Quantitative surveys are financial models that display both the best-case and worst-case scenarios of certain situations. Models can be updated and adjusted based on different factors, and are most commonly used to develop annual business forecasts.
  2. Operational scenarios deal with the immediate aftermath of a scenario happening. They outline the strategic implications in the short term and identify the best actions to minimize the impact. This is the most common type of scenario planning that organizations carry out.
  3. Normative scenarios are less about overcoming issues and more about how you’re going to achieve your future goals. For example, if you want to grow your project-based businesses and be delivering XX projects a year - or achieve $$$$ turnover - what’s the best way to get there?
  4. Strategic management scenarios deal less with the actual organization and more with societal, political, economic and other global factors that influence the business environment. Strategic management scenarios require a considered worldview as well as deep industry experience and insight. Companies often outsource this type of work to specialist futurists because its so complex.

Which type of scenario planning does my business need?

Your business needs to engage in all four types of scenario planning to be well-prepared for everything the universe might throw at it.

But in this article, we’ll be focusing on operational and normative scenario planning, as these are the two types of scenario planning that are most relevant to project-based businesses day-to-day.

Put simply, normative scenario planning helps project-based businesses strategize and prioritize to achieve their business objectives - for example, supporting strategic capacity and capability planning for your anticipated future demand.

And operational scenario planning helps them plan and adjust for any changes or opportunities along the way - for example, rescheduling projects and reallocating resources when a project changes, to still achieve the best outcomes across your current project load.

Why is scenario planning important for project-based businesses?

Your business lives and dies by the success of its projects. That success can be measured against various high-level metrics - such as client satisfaction, delivering on time and on budget, and profitability - as well as more granular KPIs like high resource utilization and low schedule variance.

But these are hard to achieve consistently in the ever-shifting sands of project work.

According to PMI, project managers lose 37% of their budget due to failures. And research from McKinsey shows this is down to factors like shifting requirements, reactive planning, unrealistic scheduling, and an unaligned team. 

This is exactly where scenario planning can make the biggest difference to project-based businesses.

It helps project managers and senior leaders anticipate and manage the impact of external and internal pressures, to still achieve the best business outcomes.

In particular, scenario planning is used in project-driven businesses to:

  • Understand how many projects are too few, too many, or just right
  • Align sales and delivery on goals - so clients aren’t oversold something that can’t be delivered
  • Keep costs down and productivity up
  • Maximize the chances of completing work on time and budget

Achieving budget and timeline goals are key objectives for any project manager, and the ability to quickly deal with unexpected issues gives you a much greater chance to do that.

Keep reading our CEO's article on why scenario planning is oh-so-important for project businesses ➡️

Scenario planning examples


Operational scenario planning examples in a project-orientated business can include:

  • How a project will continue if key resources are unavailable
  • What happens with resources and deadlines if new projects are added to the pipeline
  • Courses of action if tasks take longer than planned
  • Assessing the effect of work progressing at its current rate
  • Asking what you might do if the cost of doing a task ends up being more than what you'd budgeted

For example, a consulting business working with a client can look at what it would do if the client's project ends up taking longer than it's allocated. This could impact the business in a range of ways:

  • If there's another project that's due to start by a certain date and it's no longer possible
  • If the additional work leaves staff over-worked and in need of a break at the end
  • How it will invoice the client for the additional work - is there a surcharge? Will it be billed per extra day? How much will you charge?
  • If it needs to book additional resources for the extra time it's going to take

Understanding how you'd react in these types of situations helps to speed up the response and make better decisions if they come to pass.


An example of normative scenario planning in a project-based business could be:  

  • Working out the most profitable combination of future projects to onboard - by assessing the impact of each combination on factors like profitability, deliverability, resourcing etc
  • Teeing up alternative optimal scenarios if your Plan A doesn’t pan out
  • Anticipating likely demand for services - and therefore skills and resources - for the future
  • Understanding how different future scenarios impact recruitment and capability training, to ensure you have the right staff and skills for growth.

Advantages of scenario planning

Scenario planning helps project-orientated businesses:

  • Identify risks and critical uncertainties - so they can quickly pivot to Plan B, C and D if needed
  • Proactively take steps to eliminate risks - such as resource clashes or skills shortages
  • Navigate change quickly and confidently - like scope, schedule, or staff changes
  • Consider the different options available to them - and weigh up the best course of action in terms of profitability, client satisfaction, strategic alignment
  • Lay the groundwork to seize new opportunities - by knowing what an ideal scenario or opportunity would look like for their business
  • Make data-informed staffing decisions - to ensure they have the skills and staff in place for their proposed direction of travel

These all position businesses for success because they’re proactively pursuing the optimal scenarios for their business, rather than reacting to what happens around them.

In our recent webinar Transforming Resource Management Through Experiments, Sarah Koegler from The Ready also pointed out the following benefits of scenario planning: 

It can be really fruitful and beneficial to do scenario planning. So every quarter, lay out the different possible scenarios around what might sell, might end, what might extend, who might be where, and it helps you get a little bit more ready for whatever might be coming. And it also helps you see gaps that maybe you wouldn't have anticipated if you hadn't gone through this scenario planning rhythm.

Disadvantages of scenario planning

Now you know the benefits of scenario planning, you might wonder why businesses don’t do it more. Full disclosure, there are also some disadvantages.

  • Depending on the scope, It can take up a lot of time and money
  • It can be difficult to do, often requiring specialist analysts and expertise
  • Scenarios may not play out as expected, rendering previous scenario plans obsolete
  • It isn’t a one-and-done process, you may need to model scenarios regularly as projects change

Fortunately, normative and operational scenario planning can be made easier for project-based businesses with the right tools - like Runn. 

Using Runn for scenario planning 

If you’re not yet familiar with Runn, it’s a resource management platform for project-based businesses managing 500+ people. It includes amazing features for resource allocation but, for the purpose of scenario planning, you need to know about the project planning module.

For operational scenario planning and resource management

Runn’s project planner lets you quickly create projects - the schedule, phases, milestones, budget etc - and find and allocate suitable staff to them. That’s the day-to-day application.

For operational scenario planning purposes, you can duplicate a project and easily adjust the parameters to create multiple versions/scenarios. Doing this will let you see the impact of different disruptions on KPIs like spend, schedule, and profitability. 

So if a client does need to change their project scope or schedule, you can quickly assess the impact and come up with a strong Plan B. One that doesn’t end up in resource clashes, delayed deliverables, or a knock-on effect on all your other projects.

Runn's Project Planner

For normative scenario planning and strategic capacity management

What’s really handy is the fact you can create tentative projects in Runn too. Projects that might happen, might not.

Creating these ‘what if’ projects in Runn lets you understand the impact of onboarding different combinations of client work, so you can pick the best scenario. For example, if onboarding Project B causes resource issues for Project C. Or if schedule slippage in Project C would totally derail Project D. 

You simply create the projects and then toggle them on or off to instantly see the impact on things like resource utilization and capacity. 

Easily toggle between tentative and confirmed

Plan your dream scenarios in Runn today

You don’t need to wait to start scenario planning in Runn. Go make yourself a drink and sign up for a free trial using just your email address. 

Then you can experiment with Runn’s intuitive project planner for yourself. It’ll only take a few minutes to see what we’re talking about. 

Play around with our silly sandbox data or import your own if you want to make things more meaningful.

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