Pre-mortem: How to spot the failure before it happens

A pre-mortem is a short exercise where you imagine the decision has failed 12 or 18 months from now, and write down why it happened. It's the opposite of a post-mortem, where you work out why something failed after a project has already collapsed. A pre-mortem moves that conversation forward in time, while there's still time to change something. Owner-CEOs should run one before investments large enough to hurt if they fail, before major strategy changes, and before any decision that locks up capital for more than 18 months. The exercise typically takes 30 minutes and often surfaces the problems no one on the leadership team will say out loud — until it's too late.

Why it works

In a normal leadership meeting, you make the case for the decision. You present the plan, and the others ask questions about it. It's usually a polite conversation where people push back carefully, usually softened around the edges to avoid conflict.

A pre-mortem flips that role. The rule of the room is that the decision has already failed. Saying so out loud is no longer disloyal — it's the task. That opens up the concerns that would otherwise only surface in the corridor after the meeting, or in an email someone sends two weeks later.

The mechanism is simple: someone has to argue against the decision. The difference in a pre-mortem is that everyone in the room spends 30 minutes doing it.

When an owner-CEO should run one

Not before every choice. Three situations are usually enough:

How to run a pre-mortem in 30 minutes

The short version, which works in most small leadership groups:

1. Minute 0 to 2: Describe the decision in one sentence. "We've invested €500,000 in a new CRM system and switched sales to a subscription model."
2. Minute 2 to 3: Set the time horizon. "It is now 18 months later."
3. Minute 3 to 5: Say it out loud: "It has failed. We've lost money on it. We're in a worse position than we were before the decision." It has to be spoken, not implied.
4. Minute 5 to 20: Each person writes down at least three reasons it failed — in silence. Individually. Not together. That stops the first person from steering the conversation for the rest.
5. Minute 20 to 27: Each person reads out their three reasons. No one pushes back. Everything gets written down.
6. Minute 27 to 30: Look at the list. Two questions: Which three reasons are the most likely? Which of those could you catch early, if you knew what to look for?

Those answers are your list of early signals. You put them into the calendar immediately with concrete dates — when you'll check the numbers, when you'll ask the customer, when you'll revisit the decision.

Example — a pre-mortem on an investment

An owner-CEO of a mid-sized manufacturer faces a decision: invest in a new line that will expand capacity by 40 percent. The investment is roughly a year's profit. He runs a pre-mortem with his CFO and his operations manager.

Time horizon: 18 months. The assumption: the investment has failed. The money is spent, revenue hasn't followed, the lender has started asking questions.

The three most important reasons that come out on paper:

• "The big customer we built the plan around has moved 30 percent of its volume to a competitor. We only spotted it when the quarterly report arrived 60 days later."
• "The new line needed more specialists than we'd planned for. We lost three months of production time on recruitment."
• "Raw material prices went up 15 percent, and we hadn't built price adjustment into the contracts with our two largest customers."

None of those three reasons is theoretical. All three can be caught by concrete signals — customer renewal rates, hiring pipeline, exposure to raw material prices. The owner-CEO puts three dates in his calendar: every three months he checks the three numbers. He delays the investment decision by a month, because the pre-mortem revealed that two of the contracts need to be renegotiated before the investment goes ahead.

That's the only difference between a pre-mortem and a normal leadership meeting. The decision may still have been the same. But the risks became concrete while there was still time to act.

5 traps that ruin a pre-mortem

1. You run it after the decision has already been made. If the budget is already approved, or the contract is signed, the exercise is meaningless. It has to be able to change the decision — otherwise it was just a workshop.
2. You have the same three people in the room every time. If it's always you, your CFO and your operations manager, you keep seeing the same things. Swap one out — a board chair, a former colleague, a specialist.
3. You jump straight to solutions. "We can solve that by …" is banned for the first 20 minutes. If you start solving the problems while you're still identifying them, you'll identify fewer.
4. You write together from the start. The first person to talk sets the frame. Write individually in silence first. That's the only way the unpopular reasons come out.
5. The list ends up in a drawer. If the early signals don't make it into the calendar with dates and owners, the pre-mortem was just theory. It has to end with concrete checkpoints.

The honest test

Three questions for the next major decision on your desk:

1. If this decision has failed 18 months from now, what's the most likely reason?
2. What early signal would tell you that it's starting to happen — and when will you check it?
3. Who on your leadership team or board haven't you asked about this decision, because you assume they'll agree?

If you don't have a clear answer to all three, you haven't run your pre-mortem. You've just made a plan. That's often where the real problems begin.