The method
The Pre-Mortem Analysis process
Seven steps take you from a clear description of your business model to a living action plan. Each step can be done alone in an hour, or as a team workshop.
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Step 1
Define your business model
Describe how your business creates, delivers and captures value, so everyone analyses the same thing.
A pre-mortem is only as sharp as the picture it starts from. Write down who your customers are, what you promise them, how you earn money, what it costs and who you depend on.
Keep it short and concrete. The goal is not a perfect plan but a shared, honest description that can be challenged.
Example: A small software company writes: "We sell a scheduling app to independent physiotherapists for a monthly fee. We acquire customers through two professional associations and depend on one payment provider."
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Step 2
Imagine failure in the future
Jump ahead - three years by default - and assume the business has failed. Describe that failure as if it already happened.
Treat the failure as a fact, not a possibility. This simple shift gives people permission to voice doubts they would normally keep to themselves.
Write a short "failure story": what happened, when did it become visible and who was affected?
Example: "It is spring, three years from now. We have just closed the company. Our biggest association partner launched its own app, sign-ups collapsed and we ran out of cash within five months."
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Step 3
Identify potential causes
List every plausible reason that could explain the failure - inside and outside the business.
Work quickly and generously: quantity first, judgement later. Look at customers, the offer, competition, money, operations, people, partners and the wider environment.
When working with a team, let everyone write causes individually before discussing them.
Example causes: dependence on one acquisition channel; churn higher than assumed; key developer leaves; payment fees rise; new privacy rules for health data.
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Step 4
Evaluate risks and assumptions
Rate each cause for likelihood and impact, and make the assumption behind it explicit.
For every cause ask: what would have to be true for this not to happen? That is the assumption you are relying on.
Then record what evidence you actually have - and what you only believe. Scores are judgements that help you compare, not predictions.
Example: Risk "association launches own app" - assumption: "the association prefers partnering over building." Evidence: one informal conversation. Likelihood 3, impact 5.
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Step 5
Prioritise critical vulnerabilities
Use the risk matrix to select the few risks that deserve attention now.
Focus on risks with high impact, and on any risk built on an assumption with little evidence. A short list of priorities is more useful than a long list of worries.
Example: Of 18 causes, the team selects four priorities: channel dependence, churn, key-person risk and the payment provider.
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Step 6
Develop preventive actions
Turn priorities into concrete actions with an owner, a deadline and a way to measure progress.
Good preventive actions reduce likelihood, reduce impact or produce evidence quickly. Prefer cheap experiments and early warning signals over big plans.
Example: "Sign a second acquisition partner before Q3" - owner: commercial lead - deadline: 30 June.
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Step 7
Review and update the analysis
Revisit the analysis regularly. Reassess risks, record new evidence and adjust actions.
A pre-mortem is not a one-off exercise. Set a review date, compare scores over time and add the risks you could not see before.
Example: Every quarter the team spends one hour reassessing the top risks and closing completed actions.
Where risks come from
Risk categories used in the tools
Categories help you look in every direction when you search for causes of failure.
Market & customers
Demand, customer needs, willingness to pay, customer concentration.
Value proposition & product
Fit between what you offer and what customers value; product quality.
Competition & positioning
Competitors, substitutes, new entrants and your differentiation.
Finance & cash flow
Revenue model, margins, funding, liquidity and cost structure.
Operations & execution
Processes, capacity, quality, scalability and delivery.
Team & leadership
Skills, key people, culture, decision-making and governance.
Partners & dependencies
Suppliers, platforms, distribution partners and critical resources.
Legal, regulatory & external
Laws, regulation, technology shifts, economy and society.
Apply the method to your own business
Start with the free Quick Scan or go straight to a full, guided analysis.