The Report That Buried the Bad News
You deliver a 60-page feasibility report on a proposed 500-head beef finishing facility to a producer group. The executive summary emphasizes favorable feed-cost projections and a 14% projected return, but the sensitivity analysis on page 47 shows the project falls below break-even if feeder cattle prices rise more than 8% or if the planned lagoon permit is delayed beyond nine months. The group's board reads only the executive summary and votes to proceed. Three months later the permit is delayed and two board members call you, angry that they were not warned.
1. Assess the report's handling of the downside scenarios.
Read the worked answer
The analysis was done but the communication failed. A material risk that can push the project below break-even belongs in the executive summary, not on page 47. The summary presented a 14% return as the headline without qualifying it as conditional on feeder price and permit timing. A defensible executive summary states the base case, the conditions it depends on, and the specific triggers that break it - in plain language near the top. Burying a break-even sensitivity is a work-product failure even when the underlying math is correct, because the document's purpose is to inform a decision, and the decision-makers read the summary.
2. How do you respond to the board members, and what goes into the file?
Read the worked answer
Respond factually and without defensiveness: acknowledge that the sensitivity was in the report but should have been surfaced in the summary, and point to the specific page and thresholds. Do not claim the board should have read page 47 - the consultant controls the document's design. In the file, record the original report, the date of delivery, the board's vote, the follow-up calls, and a note on the summary's treatment of risk. Going forward, adopt a standing practice: any scenario that drops the project below break-even appears in the executive summary with its trigger. If the group requests a revised summary, provide one that states the conditions clearly.