Don't Show Again Yes, I would!

From high-speed rail to the Olympics, why do big projects go wrong?

thea lot of countries It has large construction projects that have become the epitome of inefficiency. In America, the “Big Dig,” a tortuous highway project downtown Boston for years, came in five times over its initial budget. The stadium, built for the 1976 Montreal Olympics, was affectionately known as “Big Owe” after costs were significantly overrun. The gaming debt was paid off only 30 years later. Even Germans get megaprojects wrong. Ground was broken at Berlin’s Brandenburg Airport in 2006, and the first flights took off in 2020, ten years behind schedule.

The embarrassment over Britain’s largest construction project is set to continue for many years now. Plan to build a high-speed rail, called HS2, down England’s spine was approved by the government in 2012. This month came another confirmation in a long line of delays. Now, the first passengers wouldn’t get on board until some time in the 2030s, if they were lucky. Costs have doubled from their initial estimate; Parts of the road were cut off; The trains will not run as fast as originally planned.

mega projects such as HS2 is the subject of a new entertaining book, How Big Things Get Done, by Bent Flyvbjerg, an Oxford academic who specializes in such things, and journalist Dan Gardner. Flyvbjerg is a compiler of a database of over 16,000 projects, which tells a dismally consistent story of missed deadlines and smashed budgets. By his estimation, only 8.5% of projects met their initial estimates in terms of cost and time, and an exhausting 0.5% achieved what they planned to do in terms of cost, time and benefits.

Mr Flyvbjerg’s advice is no guarantee of success: his team was involved in assessing the risks involved HS2. But the picture he and Mr. Gardner paint of why projects, large and small, tend to go wrong is convincing.

Overly optimistic estimates of time and cost stem from both psychological and political biases: reliance on intuition rather than data, a problem that Mr. Flaifberg and Mr. Gardner call “strategic misrepresentation.” This happens when budgets are deliberately cut in order to get things going, on the understanding that nothing would ever be built if politicians went so subtle. The sunk cost fallacy, whereby people are reluctant to stop projects because money spent appears to have been lost, means that the plug is rarely pulled once work has begun.

Planning is often done in haste. The authors praise Pixar’s methodical approach to developing and testing films in great detail before production begins. They also tell the story of how Frank Gehry’s meticulous architectural models helped ensure the success of the Guggenheim Museum in Bilbao. By keeping a minimal window for when a project is actually implemented, thorough planning reduces the potential for unexpected events to derail things. People are running HS2 seems to differ. In theory, the recent delays enable the British government to spend less money each year; In practice, they only increase the risk of more things going wrong.

Specially designed large projects are more likely to run into problems. The more a project can be broken down into repeatable processes, the better its prospects. Flyvbjerg’s database shows that solar and wind facilities have the best chance of zero fault, in part because standard components can be bundled together into arrays and turbines. At the other end of the risk scale lie massive one-off efforts like nuclear power plants and the Olympic Games.

It is possible to mitigate the risks inherent in large, bespoke projects. Some believe that the future of nuclear power lies in modular reactors. Paris, the city that will host the Summer Olympics next year, uses the existing facilities for most of the sports venues. Standardized designs and manufacturing processes for everything from train tracks to bridges helped China build the world’s largest high-speed rail network in less than a decade at the start of this century.

Projects run into problems for specific as well as general reasons: the quagmire of British planning rules is not something China should worry about, for example. The timelines, vetting, and objectives of large public infrastructure projects differ from those of corporate initiatives. But there are lessons here for managers of all stripes. If you plan rigorously and unite whenever possible, you are less likely to dig yourself into a hole.

Read more from Bartleby, our columnist on management and work:
Little Solace for Office Rage (March 9)
The Uses and Abuses of Hype (March 2)
Inconspicuous efficiency brings disadvantages as well as benefits (February 23)

To stay up to date with the most important news in business and technology, sign up for the Bottom Line, our weekly subscribers-only newsletter.


Leave a Reply

Your email address will not be published. Required fields are marked *