Megaprojects in Distress: Rethinking the Theory
The status quo of megaprojects these days is not good, with as many as two-thirds significantly disappointing on budget and schedule. This is occurring despite our best efforts to rigorously implement systems founded on the basic principles of project management.
But herein may lie the problem that even the latest technology cannot fix.
Project management theory developed as a well-bounded exercise when projects were organized like industrial processes—step-wise and linear, with limited interactions between owners and project managers. Emerging from PM’s earliest days, that model has been reflected in everything since—and it now holds us back!
In the way that Einstein found that Newtonian physics failed at scale, today’s large, complex projects do not fit that earlier PM model. Size and complexity create new challenges but also opportunities—if we understand what is not well served by existing PM theory.
Often, some framework processes outlined in the theory are either absent, break down at scale or just don’t measure up on such projects. Their assessments may be far from comprehensive and their stakeholders—in both the owner’s organization and the building team—are not aligned around project outcomes.
Projects’ strategic business outcomes must be articulated and agreed upon, not just assumed. People change on long-duration projects, so desired outcomes must be continuously and consistently telegraphed. Framework processes for decision-making must be strengthened and streamlined, gaining resilience through common cultures and behaviors in a transparent, communication-driven environment.
Baselines that define projects with first-order granularity must expand to comprehend all life-cycle considerations, moving beyond just translating an owner’s project requirements into the design. Greater use of design-build expands upon that to address construction means and methods and hazard elimination. Also, more public-private partnerships bring operations and maintenance issues forward before design even begins. Constructibility and operability reviews alone do not suffice.
Expanded Risk View
These new foundations must further strengthen project baselines by recognizing that risk models often prematurely screen out perceived low-probability risks. They ignore the risk contribution from so-called “fat tails.” The potential for catastrophic behavior must be recognized simply to ensure that such risks, which can have big impacts, are not just dismissed.
Optimism bias must be met head-on through this expanded view of risk.
“Assumption migration” is a characteristic of longer-duration projects, which now require us to record and track what we often use to ignore. Our risk processes must recognize, measure and manage the white-space risks that exist in complex megaprojects with upward of 100,000 activities. These new types of risk include the risks associated with more data and tool sharing.
A second set of shortcomings derives from breaking down a project into a series of sequential and inter-related tasks.
Management focuses on those tasks, often ignoring the implications of the 100,000-plus little arrows that are not dimensionless and can reflect myriad unrecorded assumptions. Our focus on flows must recognize that traditional interface requirements may fail to account for assumption migration as well as changes in the now-unbounded project condition.
Improved workface execution must rest on a workforce that is increasingly knowledge-enabled and empowered. The growing use of Big Analytics is important but in and of itself not sufficient.
Also required are knowledge assemblies that are readily available to the workforce and to real-time project modeling and management. We are now beyond the bounded nature of classical PM theory. Because project boundaries are semipermeable, external stakeholders’ influence sweeps through them.
Our management efforts today mostly look inward and are often little more than a historical record. We must look outward, well beyond the project boundary and well over the horizon. New tools will help, but a new model and mind-set are required.
A former Fluor Corp. senior vice president and Parsons Brinckerhoff chairman, Robert Prieto is CEO of Strategic Program Management LLC, a consultant that advises owners of large capital construction projects.
Printed copies of his most recent book, Theory of Management of Large Complex Projects, may be found at http://www.lulu.com/shop/bob-prieto/theory-of-management-of-large-complex-projects/paperback/product-22342232.html. An ebook is available through Construction Management Association of America. (CMAA.)
For more information on Strategic Program Management LLC go to https://www.strategicprogrammanagement.com/.
Prieto can be reached at email@example.com.