Politics and project performance
the fourth dimension of project management
Northrop Grummma Photo
Bud Baker and Raj Menon
The little jet fighter was a gem. Early flight testing had confirmed most, if not all, of its developer's promises: reliability rates heretofore unheard of, great maintainability, and low operating costs. And all this came in a high-performance package: with its Mach 2-plus speed, it could go from a cold engine start to a successful combat intercept at 40,000 feet in less than four minutes. Best of all, perhaps, the little fighter was unique in another way: its development cost of over a billion dollars was funded privately—not one cent of taxpayer money went into the program.
Nonetheless, there was a sense of desperation in the air on a cool Canadian morning. The aircraft-called the F-20, built by the Northrop Corporation—was on its way to the Paris Airshow, for what might be its last chance to prove itself to the defense aerospace world. One last airshow practice was being flown at Goose Bayr when the small jet suddenly plummeted into the ground, killing the pilot, But it wasn't the crash—later blamed on pilot error— that killed the Tigershark program, which was quietly ended the next year. Instead, the real fate of the F-20 was probably sealed years before. And it had nothing to do with cost, schedule, or technical performance.
But it had everything to do with politics.
Traditionally, we refer to three aspects of project management. These three-cost, schedule and technical performance—form the basis of our project management body of knowledge. Yet this model seems somehow incomplete, at least as far as large, publicly visible projects are concerned. Repeatedly we see the importance of politics in boosting failing projects, while ending more successful ones.
In this article we look at three case studies. One, a defense project, outperformed all expectations yet was canceled because of changing political philosophies. The second, a construction project, vastly exceeded cost and schedule projections, but was nonetheless saved by aggressive coalition-building. The third is from the world of science, and demonstrates the danger of ignoring political facts of life.
It is our position that, for large projects, a critical aspect of managing customer relations involves “managing” the project's political environment. Further, it is our position that politics is, in many cases, the most critical aspect of managing the large publicly visible project. We use the case studies to show that politically astute project management can preserve an otherwise unsuccessful project, and also that unsound political decisions can kill a project that might otherwise survive.
Successfully Managing the Political InterFace
Examples abound in which politics have played a key role in project success. The recently completed English Channel tunnel project was only the latest attempt to successfully connect England and the rest of the Continent. The primary difference between the successful tunnel of today and the failed efforts of yesteryear is in the area of politics. After all, the tunnel was first proposed in 1802, and the project was actually begun in earnest as early as 1876. Technologically the tunnel was feasible even then: more than a mile of tunnel was bored at each end. But the project failed nonetheless: the British feared that the tunnel posed a threat to national security . Subsequent attempts also ended in failure, in 1930, again several years later, and once again in 1975. Each time the cause was the same: lack of political support on the British side of the Channel . It took until 1993—after nearly two centuries of political debate—for the tunnel to become a reality.
In this article we examine three “megaprojects.” The F-20 project shows the power of politics to generate—and to kill—a large program. The second case— monumentally successful—shaped the way Americans live, work, and play every day. The last—destined to be synonymous with project mismanagement—was terminated, largely because it had forfeited its political support.
The Death of the Tigershark
In the mid 1970s, things seemed to be coming together for the Northrop Corporation. Long a power in the business of selling fighter aircraft to foreign governments, Northrop had sold over 2,700 of its F-5 “Freedom Fighters” to 30 countries around the world. And now they had developed the newest version of the line, the F-5G “Tlgershark” .
At the same time, the Carter administration was expressing concern about selling front-line American aircraft-the McDonnell Douglas F-15 and General Dynamics F-16—to foreign governments. There were at least two reasons for this concern. First, such weaponry had a way of later being used against U.S. interests, as was then threatening to become the case with Ayatollah Khomeini's Iran. Second, there was genuine concern about fueling arms races between unstable Third World governments.
So the stage seemed set. Northrop had a good, affordable design, arguably less capable and thus less threatening than F-15 and F-16 aircraft. Further, the Tiger-shark meshed with the political desires of the Carter administration. At this point, Northrop began to pour its own money into the Tigershark's development.
It didn't take long for trouble to develop. When Taiwan became the first country to try to buy the Tigershark, President Carter—the very man who had encouraged the plane's development— vetoed the sale. Among Carter's reasons was his desire not to anger the People's Republic of China by selling Taiwan such a high-performance aircraft .
Things would only get worse. The election of Ronald Reagan in 1980 marked the beginning of the end for the Tigershark. To Reaganites, the F-5G was seen as a “Carter airplane,” and Reagan seemed more than happy to sell the top-of-the-line F-16s to pretty much anyone who could pay the bills, including South Korea, Pakistan, and a host of other nations . Added to the fact that the U.S. Air Force had never ordered any Tiger-sharks, the overall image of the Northrop fighter began to decline.
Cosmetic attempts to fix the Tiger-shark's image failed to help the situation. For example, its original designation of “F-5G” was deemed to be detrimental. After all, with aircraft designs numbered sequentially, the F-5G would appear to be almost by definition less modern than the competing F-15, F-16, and F/A-l 8. So the airplane was redesignated as the F-20, to stress the major differences between the Tigershark and its earlier F-5 ancestors .
As the Reagan years rolled on, though, the Tigershark continued to lose ground, despite impressive results in flight tests . General Dynamics, builder of the F-16, proposed a “descoped” version of the F-16 at a unit price nearly $2 million below that of the F-20. The Congressional Budget Office jumped on the bandwagon, concluding that the F-16 derivative “would be the cheapest to procure and offers less risk than Northrop's F-20, which still must clear some development hurdles” .
The crashes of two of the three prototypes—neither attributable to mechanical failure—in 1984 and 1985 merely provided the coup de grâce to an already staggering program. Northrop threw in the towel in November of 1986, after investing $1.2 billion . A” project with impressive technical qualities, one which hadn't cost the taxpayers a cent, became one of the great product failures in history, largely because of political considerations. The Tigershark was dead.
The Interstate Highway System, once snarled in a political tangle, survived thanks to compromise and “chunkability.”
President Eisenhower and The Interstate Highway System
Just over 40 years ago, on July 12,1954, President Dwight Eisenhower proposed a massive road building plan, one which would bring a host of benefits to the American public. Among these benefits, Eisenhower mentioned increased national productivity, enhanced highway safety, and a strengthened defense establishment, necessary “should atomic war come” . Additionally, Eisenhower believed that the thousands of jobs created would help lift the United States out of the post-Korean War doldrums . The cost figure he used—$50 billion—was admittedly only “a good start on the highways the country will need for a population of 200 million” .
Despite Eisenhower's personal support, the project was quickly swamped with political problems, largely related to finances. Projected costs rose fast enough to shock even the most pessimistic observers. Within just four months, the cost estimates had grown 52 percent, to $76 billion, and then further ballooned to $101 billion just two months after that .
But it wasn't the projected cost overrun that sidelined Eisenhower's first plan—it was politics. Truckers objected to increased taxes on tires and fuel. Western governors, faced with vast expanses of highways but few drivers, objected to the use of tolls as a financing source. Eisenhower's Democratic opponents wanted to keep road design standards at the county and state level and objected to the proposed financing methods as well. In the summer of 1955, Congress killed Eisenhower's plan, and adjourned .
The setback, though, was only temporary. Early in 1956, Eisenhower adopted a more bipartisan approach. He reconciled with key Democrats, and the result was the Interstate Highway Act of 1956. The key principles behind the Act were these:
• Limited tax increases on the trucking industry
• In return for federal design control, 90 percent of cost would be borne by the federal government
• Urban areas—where the votes were— would receive most of the construction dollars
• Contentious issues—e.g., the use of tolls as a financing tool—were intentionally avoided. Both sides agreed to postpone any decisions until the project was under way; not a sound concept for most projects, certainly, but necessary here .
In sum, then, the Act offered something to everyone, and aroused the ire of almost no one. And therein lies the secret of political success. As Mark Rose, author of Interstate Express Highway Politics, 1941–1956, so eloquently put it:
None of this agitated anyone …Americans … were optimistic about the natural congeniality of highway construction and economic growth. If traffic tangles were reduced, if billions were spent for more roads, the economy would prosper. Truckers and contractors, then, could look forward to personal wealth; economists and government officials, to steady economic growth; and farmers and urban motorists alike, to faster trips to market, to jobs, and to recreation areas .
Certainly some tactics—e.g., the intentional postponement of critical decisions—aren't applicable to every project. But politics is, as they say, “the art of the possible,” and the rules are, of necessity, different.
Our final example is one in which the concepts of political project management were ignored, with predictably disastrous results.
The Superconducting Super Collider
When questioned in the British Parliament about the usefulness of experiments about the “thing” called electricity, scientist Michael Faraday was quoted to have said: “One day you will be able to tax it!” Clearly, Faraday was a man who understood the power of politics. But, regardless of potential usefulness, science projects fall within the discretionary part of the United States’ federal budget—the portion that annually requires a yes or no from Congress—in contrast to Social Security, veterans’ benefits, and other entitlements. Science projects only rarely capture public imagination and garner popular support, making them especially vulnerable to political neglect.
The Superconducting Super Collider (SSC) is clearly an example of the above. The objective of the $11 billion SSC was to validate the existence of the “Higgs Boson.” A British theorist named Peter Higgs proposed a mechanism-called a Higgs field-that invisibly pervades all of space. Physicists believe that particles acquire their mass and their individual properties from this field through the Boson (from the Indian scientist, S.N. Bose). The SSC was designed to conduct experiments within a 54-mile underground circular chamber, accelerating subatomic particles to 99.9999 percent the speed of light and smashing them together at combined energies of 40 trillion electron volts. The thought was that this would provide answers to fundamental questions about the formation of the universe. While it is dangerous to predict how much society stood to gain from this research, many believe that the benefits could have been enormous. In their view, past, pure science research, like that of the first atom splitting, led to the discovery of nuclear energy, quantum theory, and most of the electrical and computer technology we take for granted today .
But all that will need to remain forever as mere speculation. On October 19, 1993, Congress—after spending more than $2 billion on the SSC project—unceremoniously pulled the plug, ending 11 years of effort and putting 2,000 people out of work . Certainly there were problems with the SSC. Cost had ballooned, largely due to increasing technical requirements, and schedule was slipping correspondingly. But the real problem facing SSC management was not technical, or budgetary, or schedule-related. The real problem, once again, was politics.
Whatever one's view of the merits of the SSC, the budget review process of Congress is a messy affair in which politicians tend to view scientific projects as a type of pork to be parceled around the country. But the SSC seems never to have been understood, either by the public or Congress. It is interesting to note that in the 280 to 150 vote in the House to ax the SSC, not more than 20 percent of Congress had any understanding whatsoever of the technical aspects of the project .
In government-funded projects, the public is a powerful stakeholder—Super Collider management ignored this fact, with disastrous results.
Another political problem facing the SSC was the lack of support from the Clinton administration. As Congressman Joe Barton, R-Texas, described what killed the SSC: “If you boil it down to one word, Clinton” . There was never more than a lukewarm acceptance of the SSC from the Clinton administration, and when the going got tough there was only concern for the budget deficit.
Part of successful project management involves managing the project's political interfaces. In this regard, SSC management was somewhat less than successful. SSC managers campaigned for good will at universities, schools, scientific meetings, and the like. This “preaching to the choir” failed to convey the benefits of the project to the real decision makers: the Clinton administration and the members of Congress. Even the few well-conceived PR efforts ran into bad luck. For example, a procession of SSC luminaries assembled in Washington, including several Nobel laureates, for one last major media offensive. But their presentation turned out to be at the same moment as the historic Rabin-Arafat handshake signaling the possibility of peace in the Middle East. Not a single television camera turned up to cover the scientists .
The project also suffered from an identity crisis. It was difficult to figure out if this big science project was to make the U.S. first in basic science, or if it was a world science project. In 1987–88, under President Reagan, U.S. international specialists led discussions with friends and allies that led to foreign commitments to contribute as much as $1 billion to the SSC. But in the Bush administration, the importance of an international approach to the SSC was ignored, and foreign investors not surprisingly pulled out.
For a project that would have cost only 0.2 percent of the national research budget , the SSC assumed a symbolic importance way beyond its economic significance. It became, in fact, a symbol of fiscal irresponsibility. For all the billions spent, the truth was that the SSC produced very few jobs, at very high cost, most in a very limited geographical area. The SSC was situated south of Dallas in Waxahachie, Texas, and was to generate about 2000 jobs at the staggering cost of $4.7 million per job . With limited economic importance beyond Texas, the SSC had few backers in Congress. And when respected Texas Senator Lloyd Bentsen left the Senate for President Clinton's cabinet, the SSC became a prime target of Congressional budget cutters, concerned with a $4 trillion deficit and unmoved by the SSC‘s limited appeal as a “Texas project.”
The project's negative press wasn't helped by news of millions being spent on parties at ritzy hotels, liquor, plants, and to insure art work . The widespread dislike of the senior SSC officials by the Clinton administration didn't help either. Energy Secretary Hazel O‘Leary commented on the high sense of self-importance and arrogance among the top SSC officials who were denying access to confidential information to auditors from federal agencies . Other scientists— perhaps jealous of the SSC budget— claimed that the SSC was undermining the credibility of all science. Worse still, J. Peter Grace's Citizens Against Government Waste picked the SSC from a list of hundreds of government projects, and recommended its cancellation. The Grace group also enlisted the support of Friends of the Earth, the Senior Coalition, and other groups, not to mention a few highprofile scientists .
Some Lessons Learned
Projects can, and do, succeed because of politics. And they fail because of politics as well. The fates of the F-20, the interstate highway system and the Superconducting Super Collider provide lessons that apply to any large program:
1. “If politics giveth, politics can taketh away. ” The F-20 had its genesis in the particular political world view of the Carter administration. But support for politically-generated projects can disappear as quickly as it appeared, as Northrop saw with the election of Ronald Reagan. There was no pressing technological need for the F-20, and absent that, its fate was probably sealed on Election Day, 1980, six long years—and hundreds of millions of dollars—before Northrop finally ended the program.
2. The story of the project needs to be told in a way that's clear not only to the techno-wizards, but to the masses as well. We can all understand a highway system. We could even all understand President Kennedy's call to put a man on the moon. But the concept of a 54-mile-donut-atom-smasher? One that could tell us the origins of the universe? And one that's underground, no less? Perhaps Congress can be forgiven its inability to understand all the technical aspects of the SSC—very few non-physicists, in Congress or not, seemed able to grasp the concepts involved.
3. Top management needs to be fully behind the project. Eisenhower staked the credibility of the American presidency on the interstate system. Four decades later, President Clinton-distracted perhaps by health care and the debate over the North American Free Trade Agreement— barely lifted a hand to save the SSC. As is so often the case in the private sector, the support of top management is crucial. Such support does not guarantee success, but the lack of it can go a long way toward ensuring failure.
4. “Chunkability” helps. A large project, especially one that is publicly funded, will likely last through several changes of political leaders. As those leaders change, so will support for the project wax and wane. If the project is planned in an “all or nothing” way, it becomes a ripe target for budget cutters. This was the case with the SSC. The 54-mile-donut was not a flexible thing: one couldn't stop, say, at mile 50 and still have a useful result. But the interstate system was exactly the opposite. Every new mile of freeway added utility for its users, and if budget crunches or competing priorities necessitated a cutback for a period of time, such slowdowns did not endanger the entire project.
5. Project managers need to “sell” their project to non-believers. In some ways, the tendency of SSC managers to talk to scientific audiences and college campuses is understandable: it's a great deal easier to market to those we believe are predisposed to our point of view. But while it may be understandable, it's exactly the wrong thing to do. Project managers must communicate with all their constituencies, especially the contentious ones. Those audiences are the show-stoppers, and project managers ignore them at their peril.
6. Benefits must be widespread. Contrast the interstate system, which can truly be said to have shaped nearly every American life over the past 40 years, with the SSC: only a relative handful of jobs, provided at great cost to people who were, by and large, readily employable elsewhere. The successful public project draws its support from the masses, and that support can most readily come when the benefit is most broadly based.
People without a sense of history are proclaiming an end to war, and thus to large defense projects, and others see the death of the SSC as the end of “Big Science.” But both views are surely shortsighted. Large projects have existed since the time of the Pharaohs, and it's unlikely that they're suddenly finished for all time. But whether in defense, or science, or public works, the lessons are the same: successful project management includes successful political management as well. ■
The authors are grateful to Jim Wilson of the Northrop Grumman Corporation and Roth Rhinehart of the Pantex Corporation for their assistance and support.
1. Morris, Peter WG., and George H. Hough. 1987. The Anatomy of Major Projects. Chichester, England: John Wiley and Sons, 21.
2. Ibid, 21-22,37-38.
3. “F-5G Performance Emphasized,” Aviation Week and Space Technology, Jul. 28, 1980, p. 12. Also “Northrop Aims for a Killing With the Tigershark,” Fortune, Jun. 24, 1985, p. 58
4. “Carter Vetoes F-5G Sale to Taiwan,” Aviation Week and Space Technology, Oct. 23, 1978, p. 24. Also “Northrop Scraps Fixed ‘83 Output of F-5G Fighter,” Wall Street Journal, Jun. 28, 1982. p. 4.
5. “Northrop's Tigershark Continues Uphill,” Wall Street Journal, Nov. 7,1985, p. 6. Also “Northrop Aims for a Killing With the Tigershark,” Fortune, Jun. 24, 1985, pp. 58-62.
6. “News Digest,” Aviation Week and Space Technology, Nov. 29, 1982, p. 28.
7. “Northrop F-20 Achieving Flight Test Program Goals,” Aviation Week and Space Technology, Jun. 11, 1984, pp. 56-60.
8. “Northrop Effort to Sell F-20s Appears Hurt,” Wall Street Journal, Oct. 7, 1985, p. 8. Also “Northrop's F-20 Hopes Dealt a Blow by Report,” New York Times, Oct. 5, 1985, p. 13.
9. “Northrop Closing Out F-20 Fighter Project,” Aviation Week and Space Technology, Nov. 24, 1986, pp. 24–25.
10. “Eisenhower Bids States Join U.S. in Vast Road Plan,” New York Times, Jul. 13, 1954, p. 1.
11. Rose, Mark H. 1979. Interstate Express Highway Politics, 1941-1956. Lawrence, KS: The Regents Press of Kansas, p. 70.
12. “Eisenhower Bids States Join U.S. in Vast Road Plan,” op. cit.
13. “Clay Says Road Program Needs $26 Billion More Than Planned,” New York Times, Nov. 12, 1954. Also “Eisenhower Gets $101 Billion Federal-State Road Plan,” New York Times, Jan. 12, 1955, p. 1.
14. Rose, Mark H. Op. cit., pp. 80-83.
17. “Subatomic Secrets, Nobel Laureate Pens a Side-splitting Physics, and The Planned Texas Super Collider,” San Jose Mercury News, Mar. 30, 1993.
18. “Smashing the Super Collider,” Newsweek, Nov. 1, 1993.
19. “The Best Sitcom on TV: Congress and the Budget,” (Editorial), Detroit Free Press, Jun. 29, 1993.
20. “Lawmakers: Budget Cutting Mood, Scathing Criticism Brought Down Collider,” Associated Press, Oct. 24, 1993.
21. “Superconducting Super Collider Projects Hangs on Edge,” Boston Globe, Sep. 27, 1993.
22. “Science's Newest Frontier,” (Editorial), Lexington (Ky.) Herald, Sep. 25, 1993.
23. “Texas Candidates Scramble in Race for U.S. Senate Seat,” Christian Science Monitor, Mar. 31, 1993.
24. “Lawmakers: Budget Cutting Mood, Scathing Criticism Brought Down Collider,” Associated Press, Oct. 24, 1993.
25. “Energy Secretary Says She's Planning Shakeup on Collider Project,” Fort Worth Star-Telegram, Jul. 1, 1993.
26. “The Last Behemoth,” The Washington Post, Aug. 4, 1993.
Bud Baker is an associate professor of management at Wright State University in Dayton, Ohio, where he directs Wright's project management M.B.A. program. He is a former government project manager.
Raj Menon is a graduate assistant and M.B.A. student at Wright State University. He co-authored and presented a paper at PMI‘s 1994 symposium in Vancouver, B.C.
Note: This article was double-blind reviewed.
PM Network •November 1995