The Severe but Plausible Test: How Realistic Should Crisis Scenarios Be?

What Does Severe but Plausible Mean?

Designing an effective crisis exercise is a balancing act. The scenario must be realistic enough to challenge participants and expose genuine weaknesses, but not so extreme or theatrical that it loses credibility.

A severe but plausible scenario is one that participants recognise could happen within their organisation, while still being demanding enough to stretch their thinking, decision-making and ability to coordinate under pressure.

The purpose is not to predict the next crisis or create the most catastrophic event imaginable. It is to establish credible conditions in which the organisation can test how its people, plans and response structures perform.

Finding the Right Level of Severity

Face Validity and Suspension of Disbelief

The starting point for any scenario is face validity: the degree to which participants believe the situation could genuinely occur.

If a scenario does not resonate, teams may spend their time questioning the premise rather than engaging with the problem. The exercise then becomes a debate about realism instead of a test of the organisation’s response.

Scenarios should therefore be grounded in the organisation’s reality, including its:

• Products, services and business model
• Critical activities and important business services
• Technology, data and facilities
• Internal and external dependencies
• Customers, regulators and other stakeholders
• Risk profile and previous incidents or near misses

The scenario does not need to reproduce reality perfectly. However, it must feel credible enough for participants to suspend disbelief and respond authentically.

Avoiding Implausible Doomsday Scenarios

A common mistake in resilience testing is the creation of an overly complex doomsday narrative. In an attempt to test every part of the organisation at once, designers may combine cyber attacks, infrastructure failures, supply chain collapse and reputational crises into a single escalating storyline.

This may appear comprehensive, but it can have the opposite effect. When the scenario becomes implausible or unresolvable, participants may:

• Challenge the logic behind the scenario
• Focus on unrealistic details rather than response decisions
• Become overwhelmed by the number of simultaneous problems
• Conclude that the situation is unwinnable
• Disengage from the exercise and its learning objectives

Real crises can be highly complex and unrelated risks can combine in unexpected ways. However, attempting to recreate that full complexity within a short exercise can be counterproductive.

The aim should be to design a scenario that is credible, relevant and difficult, rather than simply catastrophic.

Creating Real but Uncomfortable Dilemmas

The most effective scenarios present teams with dilemmas that feel possible but uncomfortable. These force participants to make difficult choices rather than follow an obvious or predetermined response.

Examples might include:

• Prioritising one critical service over another
• Prioritising one important customer or stakeholder group over another
• Balancing immediate financial impact against longer-term reputational damage
• Deciding when to notify a regulator or other authority
• Choosing whether to communicate before all the facts are known
• Allocating limited staff, technology or recovery resources
• Continuing a degraded service or withdrawing it temporarily

These are the decisions that define crisis leadership. They are rarely comfortable, but they must feel possible within the organisation’s operating environment.

Understanding Organisational Pain

Effective crisis scenario design begins with understanding where disruption will hurt the organisation most. This requires a clear view of critical activities, dependencies and vulnerabilities.

Rather than focusing only on the event that starts the crisis, scenario designers should ask:

• What will create the greatest operational pressure?
• Where will the consequences first be felt?
• When would the disruption be most difficult to manage?
• Which teams, systems, customers and stakeholders would be affected?
• Which existing assumptions or plans need to be tested?

A relatively simple event, such as the loss of a key system or supplier, can reveal cascading impacts and force difficult decisions. The complexity lies in the consequences of the event, rather than the number of disasters included in the storyline.

A well-designed crisis simulation exercise uses these consequences to test the organisation’s real pressure points while maintaining a focused and credible narrative.

The Scenario Is a Vehicle for Learning

The scenario is a vehicle for learning, not the objective of the exercise. Its purpose is to create conditions that stimulate discussion, decision-making, communication and coordination.

Overly detailed or prescriptive scenarios can constrain thinking and encourage participants to play the script. Well-designed scenarios introduce ambiguity, incomplete information and competing priorities, requiring teams to think, adapt and collaborate.

The most useful exercises examine:

• How participants interpret incomplete or conflicting information
• How decisions are made and recorded
• How effectively information is shared between teams
• Whether responsibilities and escalation routes are understood
• How priorities are communicated and translated into action
• Whether plans and supporting resources are workable

If these behaviours and capabilities are being tested, the scenario is doing its job.

Testing Severe but Plausible Scenarios in Financial Services

For financial services firms within the scope of UK operational resilience requirements, severe but plausible scenario testing has a specific regulatory purpose.

Firms must assess their ability to remain within the impact tolerance established for each important business service during a severe but plausible disruption.

The FCA expects scenario testing to:

• Reflect the firm’s risks and vulnerabilities
• Vary in nature, severity and duration
• Test whether important business services can remain within their impact tolerances
• Identify vulnerabilities that require remediation
• Develop in sophistication as the firm’s operational resilience matures

Previous incidents and near misses within the organisation, financial sector and other relevant industries can help inform scenario design.

Testing should provide evidence of where the organisation can remain within its impact tolerances, where it cannot and what remedial action is required.

Recognising the Practical Limits of Realism

There are practical limits to how realistic an exercise can be. Most exercises last a few hours, while real crises may unfold over days or weeks.

It is difficult to reproduce sustained fatigue, full operational disruption or the intensity of genuine customer, media and regulatory pressure. Instead, exercises should simulate the most important elements of that pressure in a controlled way.

The goal is not to recreate reality in full. It is to approximate the conditions that shape decision-making and behaviour during a genuine disruption.

Matching Scenario Complexity to Team Capability

The right level of difficulty will depend on the experience and maturity of the participants.

A team taking part in its first exercise may benefit from a structured tabletop exercise with shared information and facilitation. A more experienced crisis team may need greater ambiguity, asymmetric information and cross-functional pressure.

A progressive exercise programme allows realism and complexity to increase over time as participants develop confidence, competence and familiarity with their roles.

What Does a Successful Scenario Look Like?

A successful scenario should:

• Be clearly connected to the exercise objectives
• Reflect the organisation’s actual risks and dependencies
• Feel credible to the people taking part
• Create pressure without making the response impossible
• Require meaningful decisions and prioritisation
• Allow plans, roles and assumptions to be tested
• Generate useful observations and improvement actions
• Leave participants feeling stretched but engaged

Exercises should also support experiential learning. Participants should emerge having discovered something useful about themselves, their team and the organisation’s response capability.

In Summary

The severe but plausible principle helps organisations find the right balance between credibility and challenge.

An effective crisis scenario should be grounded in the organisation’s reality, target genuine pressure points and create difficult but possible decisions. It should avoid unnecessary catastrophe and remain focused on the exercise’s learning objectives.

When that balance is achieved, participants can engage fully, test how they work together under pressure and identify meaningful improvements before a real crisis occurs.