Creating a Contingency Plan: A Step-by-Step Guide to Preparing Your Business for Unexpected Change

“May you live in interesting times.” The old proverb rings true. These are, indeed, interesting times. Change is happening on many fronts. For leaders, that means managing new layers of complexity, often with more questions than answers.

You may be feeling it yourself. Perhaps you’re starting to see a decline in revenue, you sense uneasiness in your clients/customers, or your team seems increasingly concerned about the future. That’s why having a well-thought-out Plan B isn’t just smart — it’s essential. But how do you prepare for what you can’t predict, can’t time, and don’t know what the impact on the business will be?

In this post, you'll find several practical tools and strategies you can use – even today – to handle whatever challenges come your way. Here's what you'll find outlined below:

• Three ways you can improve your ability to anticipate unexpected change;
• A five-step framework for navigating disruption with confidence and creating a contingency plan to find a new way forward. 

Let’s start by thinking about your role as a leader to plan for the future, and how you can better anticipate what’s coming. 

Having a Plan B isn't just smart - it's essential.

Anticipating the Unexpected Change that Lies Ahead

One of the most important jobs you have is casting a vision for the growth of your business and charting a path to get there.  It’s much like planning a road trip. You will probably do quite a bit of preparation in advance of a journey, asking some fundamental questions:

• Destination: Where am I going?
• Route: How will I get there?
• Weather: Storms or blue skies?
• Supplies: What do I need?

Now think about how you prepare your team for the journey toward success:

• Goal: What do we want to accomplish?
• Plan: What steps do we need to take to achieve success?
• Environment: What’s the marketplace like? Competitive situation? What external forces could make our journey harder/easier?
• Resources: Does the team have what it needs to succeed?

Like a road trip, having a roadmap matters. In business, that roadmap takes the form of your company’s playbook — your strategies, processes, systems, and tools that guide consistent execution.  Preparation alone, however, is not enough. Journeys are full of twists and turns. Excellence is fragile. Even the best-laid plans encounter roadblocks, detours, and unexpected hazards.

This is why one of the most important things you can do as a leader is to strike the right balance between two key imperatives:

• Executing today's fundamentals, and
• Preparing for tomorrow’s unknowns.

Excellence is fragile. Even the best plans encounter challenges.

You must be able to work in the business — ensuring operations run smoothly — while also working on the business — keeping an eye out for what’s coming next.

Leadership like this is what I often refer to as mastering the art of “looking through the turn.”  This is a concept I learned when I first started to ride a motorcycle, and it is a fundamental principle that helps you navigate challenging twists and turns by:

• Keeping one eye on the road in front of you while also…
• Keeping an eye on where you want to end up, safely on the other side of the turn.

The key is this: You must spot potential hazards and potential opportunities before they arrive. You must help your team anticipate what's coming and prepare them to adapt whenever you are in a sharp curve.

Here are three practical ways you can better anticipate what lies ahead.

Three Ways to Improve Your Ability to See What's Coming

1. Monitor the environment – One of the ways I help my clients better prepare for the unexpected is encouraging them to build simple dashboards. Having a dashboard in place can help you monitor what is happening in your business as well as in the environment.

To get this process started, you first need to figure out what is important to track to give you the most clarity.  Then determine how you’ll get the data.  And finally, determine the right cadence for reviewing the data so you can spot the trends. Patterns often appear before problems hit, so you need to pay attention on a consistent basis, or you won’t see them.

This was such a valuable lesson I learned when I was running my company. My CFO and I used to meet monthly and go line by line through the entire business. We always asked ourselves, "What's different?" or "Is something better or worse?" It didn't matter. The point was spotting an emerging trend we needed to take advantage of or correct. 

For your dashboard, consider tracking both leading and lagging indicators to help you spot what's changing in your business. Here are a few examples:

• Leading indicators – Think of this as your radar, enabling you to look ahead to monitor inbound inquiries, length of the sales cycle from prospect to close, employee sentiment through regular pulse check-ins, client/customer sentiment, slipping deadlines, increasing days to collect.
• Lagging indicators – Think of this as your rearview mirror, helping you look back and track declining revenue or profit, loss of key clients/customers, employee turnover, drop in NPS or client/customer satisfaction scores.
  

2. Listen at the edges – Just like the static before a storm, some of the most important signals come from the edges of your business. Frontline employees, client/customer service teams, and even vendors can often sense friction or emerging risks before you might see them. Here are two ways to listen more effectively: 

• Make it a habit to ask your team what they’re hearing. Get their read on things, particularly what they sense in their day-to-day interactions in the business. 
• Consider scheduling periodic top-to-top visits with key clients/customers to check in, mine their thinking about the environment, find out what’s keeping them awake at night, and see what opportunities there might be for you and your team to make a difference.

3. Talk to peers – Sometimes the best way to get an early warning of change on the horizon is to talk to other leaders in your industry and beyond.  These peer-to-peer relationships can help you feel not so alone, naturally. But they can also give you a broader view of what others are seeing, wrestling with, or experimenting around. Try asking a few simple questions:

• What’s changing for you?

• What are you worried about?

• What are you trying/what’s working?

Importantly, these conversations can surface trends you haven’t yet experienced, highlight blind spots in your own thinking, and accelerate your learning curve. Peers can also validate your instincts—or challenge them—in ways that sharpen your judgment before you take action.

Make peer conversations a regular part of your leadership rhythm, not just something you do in crisis. Whether through formal executive roundtables, curated peer groups, or working with a trusted coach or business advisor who can play this role, you’ll get out of your bubble and gain foresight faster. 

Once you begin improving your ability to see what’s coming, you need to turn your attention to putting a plan in place to navigate a crisis. 

Anticipate change by identifying trends, addressing blind spots, and engaging peers.

Creating Plan B: Your Five-Step Framework for Navigating Unexpected Change

A crucial part of your business playbook is what to do when things go wrong – having a contingency plan to help you navigate the unexpected. Although you can’t always know what’s going to happen, you must have some general approach in place, especially if the worst happens. For example, what if you see a precipitous decline in revenue, your top client/customer or talent walks out the door, you experience a cyber-attack that threatens to expose your/your clients’ most privileged information, your products/services become obsolete, or the business environment starts noticeably deteriorating?

Any of these changes can feel like a “break glass/pull handle” moment has arrived.  While determining the exact course of action will vary by the business and the situation, here is a five-step framework you can use today to help you find a new way forward tomorrow, regardless of the challenges you face.

What to do when a "break glass / pull handle" moment arrives

1. Define the dilemma

What just changed, and what does it mean for the business?
Start by clearly identifying the disruption—what happened, what’s at stake, and how it impacts your people, operations, clients/customers, and financial health. Avoid sugarcoating or making assumptions; focus on facts and immediate implications.

Key questions:

• What exactly has changed?
• What risks are most urgent?
• Who or what is affected first?

2. Redefine success 

What does it look like now?
Your original goals may no longer apply. In times of significant change, redefine what matters most — protecting cash, retaining clients/customers, preserving jobs, maintaining trust—and make it crystal clear to your team.

Key actions:

• Identify new priorities for the next 30/60/90 days.
• Communicate a simplified version of success everyone can rally behind.
• Align your leadership team on this new definition.

3. Reassess resources

What do you need to pause, preserve, or invest in?
Review every major expense, project, and commitment. Conserve cash where possible, but don’t freeze entirely—be willing to make smart, cautious investments where they’ll create future value.

Focus on:

• Pausing non-essential spending.
• Adjusting staffing or workload if needed.
• Redirecting resources to higher-impact efforts.
• Exploring stopgaps (e.g., vendor renegotiations, contract adjustments).

4. Look for the opportunity in the chaos

What unexpected openings are emerging?
Even in disruption, opportunity exists.  New client/customer needs appear, competitors retreat, new service models can be developed, you can innovate your own operations. Train your team to scan the horizon for creative ways to adapt or lead.

Explore possibilities like:

• Pivoting your product/service offerings to meet the most pressing client/customer needs.
• Accelerating digital offerings and leveraging AI tools to find efficiencies.
• Rethinking pricing strategies for the current environment.
• Forming partnerships to reduce risk or expand reach.

5. Take some chances

Move forward even if the path isn't clear

In times of uncertainty, waiting too long can be just as risky as acting too fast. Once you’ve scanned for opportunities, the next step is to act—smartly, but decisively. You won’t have perfect information, and you won’t feel completely ready. That’s okay. Progress doesn’t require certainty. It requires courage, and usually you start to figure things out once you’re moving. As the saying goes, “When you take the first step, the path appears.”

In a time of significant change, bold leadership isn’t about big bets—it’s about thoughtful momentum. That might mean greenlighting a pilot project, reallocating resources toward a new customer need, or testing a new delivery model. The key is to place small, intentional bets that help you learn quickly and adjust as conditions evolve. Indecision can be paralyzing. Movement creates clarity.

Things to consider doing:

• Take the next step, even if you can’t yet see the whole road.
• Focus on low-risk, high-learning actions.
• Monitor closely, and be ready to course-correct.
• Don’t let the fear of being wrong keep you from making progress.

Remember this: Change leadership isn’t about having all the answers.  It’s about making the best decisions you can with what you know, then adapting as you go.

Even in disruption, opportunity exists.

Final Thought

Having a Plan B in place doesn't mean you'll avoid the tough calls. But it will help you think more clearly when it's time to make them. Getting better at anticipating what’s coming will help you feel more confident about preparing for the unexpected. And when the storm hits, this contingency plan framework can help you respond with resilience, lead with purpose, and find a new way forward.