Only 8.5% of megaprojects are completed on time and to budget, says Oxford University professor of major programmed management and IT University of Copenhagen professor of programmed management Bent Flyvbjerg.“It’s shocking, but these are the core facts.” He reached this conclusion after compiling a database of more than 16,000 megaprojects from across sectors around the world. Flyvbjerg has co-authored a new book on the subject with journalist and author Dan Gardner. How Big Things Get Done looks at where megaprojects succeed and fail and the lessons that can be learned. “There’s much more awareness of the issues now,” he says. “You have whole governments that have decided to do things differently and are beginning to institutionalize rules and regulations in order to improve the situation.” The seeds of failure for a megaproject are often sown in the planning stage, says Flyvbjerg. “A lot of projects jump right into the fray without much planning,” he says. “There’s a real tendency to try to get shovels in the ground. This is a cognitive bias that we all have; we have a propensity to run with the first idea that pops up in our brain and not sit back and think if there are other competing ideas that should be considered.” In their book, Flyvbjerg and Gardner say that the ideal is to “think slow, act fast”. “By slow, we don’t mean spending as much time as possible, we mean spending your time effectively,” Flyvbjerg explains. “If you don’t do that, you’ll be off to a bad start and then you get into a situation where you’re forced to act slow [when] problems pop up during delivery because you hadn’t worked through them during the planning phase.” Another simple ingredient to success is selecting an experienced team. This is something that is often overlooked, according to Flyvbjerg. “If I were remodeling my kitchen, I wouldn’t hire somebody who hasn’t remodeled a kitchen before,” he says. “But when it comes to multi-billion dollar projects, you get instances where that happens.”Flyvbjerg gives the example of a multi-billion dollar hydro-electric dam. The client was having trouble finding companies with the expertise to build it, he explains. But the country where it was being constructed had plenty of expertise in building oil and gas projects, so it hired a team which had experience in this field. “And, of course, it went to hell because building a hydro-electric dam is not the same as building a megaproject in oil and gas,” he says. Setting a governance structure around the delivery process that includes the correct incentives is also a crucial task for a megaproject, according to Flyvbjerg. “It’s very important to have both the stick and the carrot,” he says. “Unfortunately, with megaprojects historically it has been more stick than carrot.”
He Cites Heathrow Terminal 5 As an Example of a Project.
that has done incentivization well. “They made it possible for the builders to make extra money if they performed better than expected,” he says. Terminal 5 client, BAA – now Heathrow Airport Holdings – also used partnering contracts that placed the risk with itself rather than the contractors. This was another success factor, Flyvbjerg says. “BAA decided it was going to take on the risk and partner with the contractors to solve any problems that come up, so they don’t start fighting over who is to blame and actually focus on solving the problem,” he explains. Through his research, Flyvbjerg has found that megaprojects that can be broken down into repeatable modules fare best against timescale and budget. Wind and solar farms are the best examples of this, he says.“A solar farm is totally modular; the basic module is the solar cell, so it’s born modular,” he says. “You put a lot of solar cells together to create a solar panel, you put a lot of panels together and you have an array, you put a lot of arrays together and you have a solar farm.” Wind farms are similar. “There are four basic elements to a wind turbine: a foundation, a tower, a cell and wings,” he says. “From those four basic building blocks, you can very quickly build a wind farm.” The modular challenge from bespoke projects When it comes to bespoke projects, modularity is not so easy – but it is not impossible. Flyvbjerg gives the example of the Madrid Metro extension between 2003 and 2007, where 80 new stations and 90km of track were added. It was completed in half the time and for half the cost of equivalently sized projects. “The secret was modularity,” he says. It was decided that all of the stations would be the same. The repetition and learning meant that work progressed quicker from station to station. “Some cities decide that each station has to be a monument and they hire different architects for each station,” Flyvbjerg says. “If you want to do art, that’s probably a great idea, but if you want a subway that’s delivered on time and to budget then it’s a really bad idea.”
The Second Modular Element On The Madrid Metro Extension.
was the tunneling. The project team calculated that the optimum length for one tunnel boring machine (TBM) and work to be delivered by each one was between 3km and 6km so they hired as many TBMs and teams as they needed to do that. “At the time that was revolutionary; most projects would hire one or two and let them grind on until the job is finished. That might be 10 or 15 years,” Flyvbjerg says. Megaprojects are judged on their cost and on whether they are completed on time, but the main focus should be on the outcomes they provide, Flyvbjerg affirms. “Outcomes are much harder to measure and often nobody’s measuring it after a project has been done,” he says. “There’s no systemic data collection on whether we actually achieve the benefits that we set out to achieve.” He hopes that the thinking about how projects are judged can change. “We do need budgets and schedules, but they’re not the purpose,” he says.“The purpose is all the benefits that these projects can deliver.”