SCR is the most fundamental thinking structure that exists in strategic work.

What it is: Every strategic problem, every executive briefing, every moment where someone needs to make a decision under complexity can be broken into three parts:

1. Situation: What is true right now. This includes the facts and the current state. Not the problem yet. Just: here’s where we are. This should be something everyone in the room would agree on. It’s neutral, factual, and grounding. Situation is something everyone agrees on but it introduces the constraints.
2. Complication: What changed, what’s threatening, what created tension. This is where the problem lives. Something shifted, something doesn’t work anymore, something is colliding with the situation. The complication is the reason anyone is paying attention. Without it, there’s no urgency, no decision to make. It answers the question: Why can’t we just keep doing what we’re doing? Complication is something that allows the executive to reframe her thinking or see something in a new light.
   
3. Resolution: What we should do about it. The recommended action, the path forward, the decision to be made. This is not the full plan yet, but a clear enough outline that someone can say yes or no.

Three layers: Situation sets the ground. Complication breaks the ground. Resolution rebuilds it.

Why it matters: Executives don’t need more information. They’re drowning in information. What they need is for someone to take the chaos of their reality and give it back to them in a shape they can act on. SCR is that shape. It takes multiple signals and compress them into: here’s where we are, here’s what’s wrong, here’s what to do about it.

Let’s apply it to something real: Meredith Whitney vs. Bear Stearns:

1. Situation: Bear Sterns is a major investment bank, heavily leveraged at 30:1 or higher. Its business model depends on continuous access to short-term funding and client confidence. The broader market consensus is that housing prices will continue to rise and mortgage-backed securities are safe assets.
   
2. Complication: Whitney detects three contradictions. Traders are lying about business volume: clients are actually withdrawing. The bank’s leverage ration means even a small drop in asset value could make it insolvent. And lending standards have collapsed, meaning the mortgage-backed securities the bank holds are built on loans to people who cannot repay. The market narrative says everything is safe, but the behavioral signals say the opposite. The complication is the mismatch between the public story and the private reality.
3. Resolution: Bear Stearns is functionally insolvent and the market doesn’t know it yet. Exit exposure. Warn clients. Prepare for collapse.
4. Meredith Whitney had dozens of data points, contradictions, emotional signals, behavioral cues. SCR doesn’t replace her insight, but it gives a shape that someone else can hear and act on. Without the structure, one has a feeling that something is catastrophically wrong. With it, they have a briefing.

Who created SCR? It comes from Barbara Minto, a McKinsey consultant in the 1960s, the first woman hired as a consultant there. Minto graduated from Harvard Business School in 1963 and began at McKinsey’s Cleveland office that year, later moving to London in 1966.

Barbara Minto developed what’s known as the Minto Pyramid Principle, and SCR is the backbone. Her insight was that most people communicate bottom-up. They walk through all their reasoning and arrive at the conclusion at the end. Executives don’t have time for that. They need the answer first, then the logic. SCR is the structure that makes that possible.

Her book The Minto Pyramid Principle is still the foundational text for strategic communication at McKinsey, BCG, Bain, and basically every major consulting firm.

Who uses the SCR nowadays? Everyone. SCR is the invisible skeleton of almost every consulting deliverable, investor memo, board presentation, and strategic brief in the corporate world. Most people who use it don’t know they’re using it. When a CEO opens a memo and it starts with “We’re currently positioned as …” then shifts to “However, three developments threaten …” then concludes with “We recommend …” that’s SCR. They just might not call it that.

When to apply it best? Anytime someone needs to make a decision and the situation is complex enough that the problem isn’t obvious. It’s most powerful when there’s too much information. SCR forces you to choose: what is the actual complication? Because in any complex situation there are fifteen things going wrong, but only one or two that actually require a decision right now.

The discipline of writing the complication is where the thinking happens. The situation and resolution are relatively easy once you’ve nailed the complication. It’s also the best structure for communicating upward to someone who has more authority than you but less context.

Variations:

1. SCQA. Situation, complication, question, answer. Same structure but instead of jumping to resolution, you insert the question that the complication raises. “Given the complication, what should we do?” Then the answer follows. This is useful when you’re not yet sure of the resolution and want to frame the decision rather than make it.
2. SCR stacking. Where the resolution of one SCR becomes the situation of the next. This is how you handle cascading problems. “We resolved X, but that created a new complication Y.”
3. Inverted SCR. Used by journalists. They lead with the resolution (the headline), then give you the complication (why it matters), then the situation (the background). Same 3 pieces, different order depending on who’s reading.