The Base-Case is not a PLAN
- Gionata VISCONTI
- Feb 7
- 2 min read
The base case is not a plan.
Once an “idea” has successfully moved across the various development steps and reached the maturity required to be called a “project”, a new and more subtle act of self-deception usually follows: the base case quietly becomes the plan.
On paper, the base case is a useful and internally consistent construct. It allows financial models to converge on an IRR, committees to approve, and investment memos to look reassuringly serious. The question is not why we use base cases, it is why they prove so fragile when confronted with real life.
The answer is simple. Base cases assume a polite world, where neutrality is the default position and variances are linear. Weather behaves statistically, logistics behave contractually, counterparties behave rationally, and foreign exchange oscillates within a narrow and predictable band. Schedules slip gently, if they slip at all. When something goes wrong, it does so one variable at a time, and even when issues combine, their effects are assumed to be additive rather than multiplicative.
Anyone who has bothered to observe reality, even briefly and with PowerPoint closed, knows it does not work that way. Reality is correlated, cumulative, and adversarial. Delays cluster. Small overruns trigger larger ones. A late permit meets a weak contractor. A currency move meets a fixed tariff. Temporary workarounds quietly become permanent operating conditions.
Sensitivity analyses rarely change the outcome. They are typically performed as a compliance exercise rather than as a decision tool. They provide comfort rather than insight. As a result, when several assumptions break at once, nobody has decided in advance what to do next.
This is where value is lost, not because the base case was optimistic or inaccurate, rather because nothing credible, grounded in reality, existed beyond it.
A plan starts where the base case stops being a representation of reality. It answers uncomfortable questions. What happens when things deteriorate together? Which risks are absorbed, which are transferred, and which kill the project outright? Who acts first when the model stops working? How much pain can the project take before behaviour must change?
Resilient projects are rarely attractive in their base case. They look conservative, sometimes even unexciting. Their strength sits in downside engineering, in the sequencing of options, and in the clarity of accountability when assumptions fail.
The base case is the story we tell ourselves to get started. It is hope.A plan is what we rely on when the story breaks.
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