scenario-war-room

---
name: scenario-war-room
description: Use when modeling complex risk scenarios with cascading multi-variable impacts across business functions. Max 3 variables per scenario.
category: C-Level Advisory
version: 1.0.0
tools: []
---

# Scenario War Room

Model cascading what-if scenarios across business functions. Compound adversity shows how one problem triggers the next—not single-assumption stress tests.

## 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

Example: Variable A: Customer gives 60-day termination notice | Probability: 15% | Timeline: Within 90 days

### 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
  ↓
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:

- Sponsor goes dark for >3 weeks
- Usage drops >25% MoM
- No Q1 QBR confirmed by deadline
- Lead investor requests >30-day extension on due diligence
- Glassdoor activity from engineering team
- Above-market offer counter required in last 3 months

### Step 6: Hedging Strategies

For each scenario: actions to take **now** that reduce impact if it materializes.

| Hedge | Cost | Impact | Owner | Deadline |
|-------|------|--------|-------|----------|
| Establish credit line | $5K/year | Buys runway months | CFO | 60 days |
| Retention bonus for key engineers | $90K | Locks team through fundraise | CHRO | 30 days |
| Diversify revenue concentration | Sales effort | Reduces single-customer risk | CRO | 2 quarters |

---

## Output Format

Every war room session produces:

```
SCENARIO: [Name]
Variables: [A, B, C]
Most likely path: [which combination, with probability]

SEVERITY LEVELS
- Base (A only): [impact] — recovery: [X actions]
- Stress (A+B): [impact] — recovery: [X actions]
- Severe (A+B+C): [impact] — existential: yes/no

CASCADE MAP
[A → domain impact → B trigger → domain impact → end state]

EARLY WARNING SIGNALS
- [Signal 1 → scenario it indicates]
- [Signal 2 → scenario it indicates]

HEDGES (take these actions now)
1. [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 Rooms

- **Max 3 variables per scenario** — more than 3 is noise; you can't prepare for 5-variable collapse
- **Quantify or estimate** — "revenue drops" is not useful; "$420K ARR at risk over 60 days" is
- **Don't stop at first-order effects** — damage is always in the cascade
- **Model recovery, not just impact** — every scenario has 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 right; more creates 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

Map each scenario type to primary roles and cascading impact:
- 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)