The Iron Law of Megaproject Management

Originally circulated on 6 December 2019

Hi fellow Ruminants

Hi ruminants and groupies. This will be my last rumination for 2019 so I would like to finish with something suitably weighty. I have discussed this topic with some of you before and indeed I thought there was a Ruminant Pink Friday ™ submission on this topic but there has not been.

The source for today’s ruminations is The Oxford Handbook of Megaproject Management edited by Bent Flyvberg who is BT Professor and Chair of Major Programme Management, Saïd Business School, University of Oxford. https://www.amazon.com/Oxford-Handbook-Megaproject-Management-Handbooks/dp/0198732244

The introductory chapter by Professor Flyvberg of this book is available as a free download on the internet.

The iron law of megaprojects coined by him is as follows:

“Over budget, over time, under benefits, over and over again.”

One would think that the motivation for megaprojects is to create economic value and in the case of a public company to create shareholder value. Professor Flyvberg argues that there are a lot of other motivations which he calls the four sublimes. These are as follows:

• Technological sublime: The rapture engineers and technologists get from building large and innovative projects with their rich opportunities for pushing the boundaries for what technology can do, like building the tallest building, the longest bridge, the fastest aircraft, the largest wind turbine, or the first of anything.
• Political sublime: The rapture politicians get from building monuments to themselves and their causes e.g. our very own Shilowa Express
• Economic sublime: The delight financiers, business people, and trade unions get from making lots of money and jobs off megaprojects
• Aesthetic sublime: The pleasure designers and people who appreciate good design get from building, using, and looking at something very large that is also ironically beautiful – A glamorous new head office with an executive lift straight to the top floor perhaps?

Shareholder value? Not so much.

I also share his thoughts in the introduction on megaproject execution:

Delivery is a high-risk, stochastic activity, with overexposure to so-called “black swans,” i.e., extreme events with massively negative outcomes (Taleb, 2010). Managers tend to ignore this, treating projects as if they exist largely in a deterministic Newtonian world of cause, effect, and control.

I hope that this is a worthy submission to round off 2019. I hope you all have a wonderful festive season and can provide me with lots of inspiration for the continuation of Ruminant Pink Friday ™ in 2020.

Regards

Bruce