Construction Timing Pushes Back Realization of Benefits

The Fair was hastily constructed with wind and snow delaying construction. As a result the fair wasn’t ready on time, and the impression for early visitors wasn’t great, as the fairground wasn’t completely finished, for example the parkland hadn’t had time to bed down.

The Search For The Eiffel Tower’s ‘Replacement’

The Eiffel Tower was a big hit at the earlier Paris fair, and the Chicago fair wanted something to rival it. Ironically, they had a golden opportunity with Buffalo Bill’s Wild West show, but turned it down and forced it outside of the fairground, it was actually a major draw and competed with the fair rather than complementing it. The Ferris wheel was the eventual hit the fair was looking for, but delays meant it only emerged in June, over a month after the fair opened.

Viral Marketing

The fundamental issue appears to be a marketing lesson in viral marketing and urgency. Much of the attendance came later in the fair after other people had visited the fair and told them about their experience and as the fair was close to closing so the sense of urgency was greater.

The Titanic ‘s construction was successful, as far as is known. It was built on time and budget by White Star Lines in 1912 and its sister ship the Olympic successfully completed decades of service including being used as a transport for US troops during the second world war.

However, there are some lessons from the sinking of the Titanic that translate to project management.

Failure To Learn From Prior Mistakes

The Titanic’s captain may have suffered from hubris, Captain E.J. Smith was very well respected after his 43 years of service, but in the 8 months prior to the sinking of the Titanic he had had two collisions, and a near miss by 4 feet even as the Titanic was leaving Southampton on its fateful voyage. It is common practice to demote captains after collisions, but perhaps because of his reputation and years of service, Captain Smith remained in command after not one but two serious collisions in a short period of time. It appears he may have become overconfident or less focused.

Blinded By Science

This hubris also translated to the ship itself, the length of which was comparable to some of the tallest buildings at the time. It was the largest ship ever built at 882 feet long and the largest moving object on Earth. It appeared that many genuinely believed she was unsinkable and the Captain appeared to believe this too, telling a younger officer that if cut in half the ship would remain afloat indefinitely. In fact, there was some degree of truth in this, because if the Titanic had hit the iceberg head on, it may have stayed afloat, but the idea of a scraping side on collision rupturing multiple compartments of the ship was not considered. The belief in the robustness of the ship was combined with faith in the recent development of Marconi radio transmission, which enabled transmission of messages over long distances at times of distress.

Absence Of Sufficient Life Rafts

This sense of safety meant that the Titanic was not equipped with enough life rafts to accommodate all the passengers, because it was believed that the Titanic would always stay afloat, and at the time, the British standard was to measure life rafts by volume rather than the people that could be accommodated. The apparent faith in the ships unsinkability (even apparently held by some who stood on deck during the final hours of the ship) meant that effective risk management options were not in place.

For further reading on the Titanic see Frances Wilson’s excellent recent book from which most of the facts in this post are drawn, and for more on disasters see, Inviting Disaster which analyzes why disasters occur in detail.

Positives

• Clear customer oriented success metrics in place for the project (e.g. reducing delays 27% from 2009 levels)
• Currently ahead of schedule in certain areas (e.g. innovation in fuel saving routes for aircraft)

Negatives 

• Currently forecast to be 7% over-budget across all projects. As if often the case of 5 key projects, 4 are on track, but one is materially delayed and may impact the others due to dependencies.
• Stakeholder credibility – even though the work is broadly on track, most stakeholders (the airlines) are skeptical that the work will be done on time, and aren’t willing to make necessary aircraft investments until they see more evidence that of project success.

One of the criticisms of calling the Sydney Opera House a failed project given it’s time and budget overruns, is that is an architectural masterpiece. The thinking is that budget and schedule overruns are necessary evil if you are creating a work of art.

This idea is persuasive, but wrong. The Guggenheim Bilbao demonstrates that award-winning architecture does not have to be the result of lax project management. There is a detailed case study from the Havard design school here  and Bent Flyvbjerg addresses the topic on page 53 of this paper.

The Guggenheim Bilbao was completed on time and budget and though it has not won the Pritzker Prize, it does place well in architectural surveys. It is a good counter example to the idea that architecturally innovative designs are likely to come in late and over budget.

1. The Teleport

No one disputes that teleporting is a phenomenal idea. Yet, no one has any idea how to implement it. A lot of failed projects are like this. These sorts of projects often arise when the stakeholders get more excited with the ideas than considering the budgets and feasibility. Resource based forecasting isn’t possible because there’s no precedent and the feasibility of the idea is only understood very late in the execution phase of the project.

Examples: Sydney Opera House, Denver Airport’s Baggage System

2. The Winner’s Curse

A bidding process would seem like a sensible way to find the lowest cost provider for a project. In practice it doesn’t always work that way and the winner’s curse means you may often end up selecting not the cheapest vendor, but the one with the least reliable estimates. They appear cheapest, but only because they haven’t effectively gauged what it will actually cost to do the work. Once they are selected as a vendor, they then have leverage to increase costs and things unravel from there.

Examples: Scottish Parliament, Wembley Stadium

3. The Camel

Just as a camel is a horse designed by committee, so camel projects lack one person in command, and typically have large groups of people calling the shots. All projects have large numbers of requirements, but because of the large number of stakeholders these requirements cannot be scoped down to a level that will enable the project to be completed within expected time and budget:

Examples: Taurus, Eurofighter and FBI’s Virtual Case File

“Fully one in six of the projects we studied was a black swan, with a cost overrun of 200%, on average, and a schedule overrun of almost 70%. This highlights the true pitfall of IT change initiatives: It’s not that they’re particularly prone to high cost overruns on average, as management consultants and academic studies have previously suggested. It’s that an unusually large proportion of them incur massive overages—that is, there are a disproportionate number of black swans. By focusing on averages instead of the more damaging outliers, most managers and consultants have been missing the real problem.”

It may be inappropriate to use the term black swan for something that occurs with a one in six probability, but the implication is clear, when projects go wrong they can go extremely wrong as many of the case studies on this site illustrate.

Taurus stands for Transfer and Automatic Registration of UncertificatedStock. Basically a way to automate the back end processing of London Stock Exchange transactions, since the prior Talisman system was stretched.

Taurus was first estimated to take 6-18 months and ultimately took 10 years, without success. Budget overruns were similarly impressive, with initial estimates in the range of 6-18 million pounds and the final figure being somewhere between 400 and 800 million. I believe the reason for the range of estimates is because the project having multiple phases and directions to it, with two initial proposals (Taurus1 and a committee recommendation) being scraped until a final and very ambitious proposal was attempted.

The core problem was 280 financial institutions in putting requirements and the economist John Kay describes on his blog.

“It would take a full page of the Financial Times to list interests that needed to be placated and demanded to be represented. The registrars feared that a centralised computerized system would put them out of business. Listed companies wanted to make sure they could find out easily if arbitrageurs were on their share register. Private client brokers wanted to protect their customers’ rights to hang share certificates on their walls and make cheap crossings on the English Channel with their concessionary shares. The government insisted that communications should be as secure as the Government Communications Headquarters and investors’ funds as well protected as the gold in the Bank of England.

And so it went on. And on, and on, through interminable committees and working groups.”

Ultimately Taurus was scrapped and CREST was implemented, Daniel Davies argues CREST succeeded due to regulatory stability, but I think that is overlooks the stakeholder chaos that Taurus experienced independent of regulatory change. Rory Linwood argues that requirements management was the crux of it here. CREST didn’t give everyone everything, but it made the tough decisions early and was successfully implemented within 3 years.

Similar issues with the challenge of design by committee and unclear reporting chains can be seen in the project failure of the Typhoon Eurofighter  weak requirements management as also evident in the FBI’s virtual case file project.

• Given many projects fail, when a new project manager looks for an example project to emulate, they are typically copying a ‘bad’ project as the model to follow.
• Requirements gathering is hard and often done poorly.
• Successful projects require a clear sense of broadly shared direction and this is often lacking.

Thanks to Conrad Morlan, since I originally found this video on his blog.

Below is the timeline for the initiative (source GAO)

What Went Well

• The act of planning is in itself a useful exercise, and each state now has somewhat better plans in place.
• Some new relationships were formed to improve coordination in the event of crises. For example, Hawaii was creative in engaging Wal-Mart and Target in the planning process.

What Could Be Improved

• The pilot was loosely structured, and though the goals were clear, there was no prescribed methodology and therefore, some states were more successful in making progress than others
• Not all relationships improved due to the process. For example, coordination with the Department of Defense would be necessary for most large scale crises. Yet no state had deep engagement with the DoD.