Executive summaries and memos
The whole document in a few lines, then the support. A one-page memo shape, a subject line that states the point, and a worked memo on closing two shops.
Key takeaways
- An executive summary is the whole document in a few lines: the answer, two or three reasons with their numbers, the main risk and what you need from the reader.
- The strong line carries the recommendation, the number and the ask. A reader who sees only the inbox already knows what you want.
- A summary that only lists topics: "This memo covers the market, our costs and three options" is a table of contents, not a summary.
Key idea
An executive summary is the whole document in a few lines: the answer, two or three reasons with their numbers, the main risk and what you need from the reader. Someone who reads only the summary should still be able to decide.
A one-page memo, top to bottom
- A subject line that states the point: "Close the Lyon and Porto shops: EUR 1.2 million a year better off", not "Store review".
- The first paragraph: your recommendation and the decision you need, with a date.
- Two or three reasons, each with its number. Lead each paragraph with its point.
- The main risk and how you will watch it.
- Next steps: who does what, by when.
- Detail and tables at the end, for the reader who wants to check.
Keep sentences short. The GOV.UK style guide from the UK Government Digital Service asks writers to check any sentence of more than 25 words to see if it can be split. A plain sentence is not a sign of a simple mind; it is a sign that you have done the thinking for the reader.
Worked case
A memo on closing two shops that lose money
The prompt
A European fashion retailer has 12 shops; two lose money. Write the executive summary of a memo on whether to close them.
The two shops lose EUR 0.4 million and EUR 0.2 million a year. Closing them costs EUR 0.9 million once (ending the leases). Together they sell EUR 5 million a year, and about 30 percent of those sales are expected to move to nearby shops, which earn a contribution margin of 40 percent on them. All figures are illustrative.
The structure
- Is the business better off without the two shops?
- Losses that stop when they close
- Contribution from sales that move to nearby shops
- One-off closing cost, and how fast it pays back
Working it through
1. Losses that stop
Add the two shops' yearly losses.
Yearly losses avoided (EUR millions):0.4 + 0.2 = 0.62. Sales that move
Thirty percent of EUR 5 million moves to nearby shops.
Sales kept (EUR millions):5 × 0.3 = 1.53. Contribution on those sales
Forty percent contribution margin on the sales that move.
Contribution kept (EUR millions):1.5 × 0.4 = 0.64. Yearly gain
Losses avoided plus contribution kept.
Yearly gain (EUR millions):0.6 + 0.6 = 1.25. Payback
The one-off cost divided by the yearly gain, in months.
Payback (months):0.9 ÷ 1.2 × 12 = 9
The recommendation
Close both shops by the end of the year: the business is about EUR 1.2 million a year better off, and the EUR 0.9 million closing cost pays back in about 9 months. The gain comes from two places: EUR 0.6 million of losses stop, and about EUR 0.6 million of contribution stays because some customers move to nearby shops. The main risk is that fewer customers move than the 30 percent assumed; even if none did, the closures would still pay back in 18 months. We need a decision by the board meeting on 15 November to give notice on the leases.
Risks: Fewer customers move to nearby shops than the 30 percent assumed.
Next steps: Board decision by 15 November; Give notice on both leases; Track sales at the nearby shops each month.
Two subject lines for the same memo.
Weaker answer
"Update on store performance review: findings and next steps"
Stronger answer
"Close the two loss-making shops: EUR 1.2 million a year better off, decision needed by 15 November"
Why the stronger answer wins: The strong line carries the recommendation, the number and the ask. A reader who sees only the inbox already knows what you want.
"This memo covers the market, our costs and three options" is a table of contents, not a summary. A summary states the conclusions. Test it: could the reader make the decision from it alone?
In the memo above, suppose no customers move to nearby shops. The yearly gain is then only the EUR 0.6 million of losses avoided. How many months does the EUR 0.9 million closing cost take to pay back?
What should the first paragraph of a memo do?
Sources for this lesson (2)
- Government Digital Service, GOV.UK A to Z style guide (entry on sentence length)
- Recognized public explanations of case-interview concepts and terms
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