The Three Secrets of Megaproject Success
Clear Strategic Vision, Total Alignment, and Adapting to Complexity
Aaron Shenhar, Rutgers Business School, Newark, New Jersey, USA
Vered Holzmann, Faculty of Management, Tel-Aviv University, Tel-Aviv, Israel
Past studies have often voiced concern that important megaprojects have repeatedly failed due to extensive overruns, misunderstanding of expectations, or both. In this article, we contend that this pattern may not be inevitable. In retrospect, despite painful delays, some megaprojects eventually achieved their longer-term objectives. In this study, rather than asking why megaprojects fail, we asked whether these notable (and rare) accomplishments have anything in common. We found that successful megaprojects are distinguished by three major elements: clear strategic vision, total alignment, and adapting to complexity.
KEYWORDS: megaproject success; complexity; vision; alignment; context
Megaprojects have been performed by humanity since the early days of civilization. Almost all ancient societies have embarked on ambitious goals of creating monumental structures on one hand or useful infrastructures on the other. Megaprojects, in modern times, have notably expanded beyond construction and have entered other fields and industries. Furthermore, rapid developments in technology over the last 60 years, have enabled us to do what could only have been a dream years earlier. However, this progress has also presented enormous challenges to the organizations and nations undertaking the creation of megaprojects.
Perhaps the most impressive example of a modern-day megaproject was the Apollo Moon-Landing program, which successfully fulfilled society's century-old dream of “Man Going to the Moon,” and signaled the beginning of a new era in the fulfillment of human potential. Consequently, today, megaprojects are found in most areas of life—engineering, infrastructure, oil, aviation, information technology, shipping, and of course space. Many of these projects are initiated by government agencies or state and public organizations that usually have the resources, motivation, and time to run the highly complicated processes required to undertake such huge commitments, along with the endurance to bear the exorbitant costs involved.
As we already know, however, in retrospect, many famous megaprojects were considered failures, due to extensive overruns or misunderstanding of expectations, or both. Just recall the cases of the Concord—the supersonic transporter built by the United Kingdom and France with a cost overrun of 1,100%; Boston's Big Dig artery and tunnel project (a 220% cost overrun); or Denver International Airport (with a 200% cost overrun). This ‘much too common’ pattern of megaprojects was recently dubbed by Flyvbjerg as “The Iron Law” of “over time, over budget, over and over again” (2011). Although many authors have studied the history of megaprojects, there is still no consensus as to what the reasons are for this pattern.
But does it have to be that way? Is it inevitable that megaprojects will end up in disappointment or unrealized expectations? Maybe it is time to learn how to do it right! In fact, let's not forget that despite this much-too-common pattern, there are notable great successes after all. The immediate question then is: What is their secret? What distinguishes between success and failure in the megaproject arena?
In this article, we take a different approach to traditional studies. Rather than asking what the reasons are for failure, we attempt to discover what makes a megaproject successful. Furthermore, we question: What are the ingredients of these superstar megaprojects? Do they have anything in common? Perhaps if we learn the critical elements that lead to success, we will be able to avoid some “expected” disappointments in the future.
In this research, we use an integrative strategic view to examine the success of such megaprojects and the value they have left behind. We consider success or failure based on an extension to a combined multi-dimensional and multi-stakeholder strategic concept (Shenhar, Dvir, Levy, & Maltz, 2001; Samset, 2010; Turner & Zolin, 2012; Shao, Müller, & Turner, 2012). First, we consider their long-term business and value creation perspective—did they really make money and/or contribute to society at large? Second, obviously, we cannot ignore the traditional view of success as meeting time, budget, and scope goals. By using the strategic and retrospective thinking, however, we contend that although many megaprojects did not meet their time and cost objectives, we should not ignore the eventual value they delivered and the long-term impact on different parts of society. As history shows, sometimes, what seems to be a failed project at the moment of completion, may often turn out to be an enduring success. Just think of the beauty and attractiveness of the Sydney Opera House. And, finally, we will also distinguish between success and failure from different stakeholders’ perspectives.
Another perspective we adopt here is the fact that each megaproject is “one of its kind.” With this perspective, we must address the differences among megaprojects and look at varying ways of managing them. Thus, we engage different models of distinction among megaprojects based on innovation, complexity, constraints, and so forth, and use them to examine their selected managerial approaches. Our ultimate goal, therefore, is to decipher what makes a successful megaproject and to detect the major factors that contribute to its success. We will conclude with a few lessons for future enterprises embarking on future generations of megaprojects.
Theoretical Perspectives and the Literature
We will engage several organizational theories in this study. The first one is complexity theory, which has received increased interest in recent years. Various authors (e.g., Geraldi, Maylor, & Williams, 2011; Pich, Loch, & De Meyer, 2002; Howell, Windahl, & Seidel, 2010; Shenhar & Dvir, 2007) have suggested ways to look at complexity in projects and have offered methods for studying complexity and its impact (a more detailed discussion of theory is included later).
Another theory is structural contingency (Pennings, 1992). Since “one size does not fit all,” we intend to identify differences among megaprojects using different criteria and dimensions, and suggest ways to successfully address diverse kinds of megaprojects.
The third theory is transaction cost economics (Williamson, 1981, 2008; Douma & Schreuder, 2008; Luzzini, Caniato, Ronchi, & Spina, 2012), which will be used to look at megaprojects as transactions between capital investments and benefits for society. Since we are looking at projects as value creation processes, this view will help us analyze the net worth of benefits versus investments.
On Megaproject Research
One of the most well-known pioneers in the literature of megaprojects is Bent Flyvbjerg, who directed our attention to the unique phenomenon of a megaproject and its problematic challenges. In a series of influential studies, Flyvbjerg (2011, 2014, 2016) provided a framework for the study of megaprojects. He defined megaprojects as “large-scale, complex ventures that typically cost US$1 billion or more, take many years to develop and build, involve multiple public and private stakeholders, are transformational, and impact millions of people” (Flyvbjerg, 2014, p. 6). Megaprojects are not just magnified versions of smaller projects. Megaprojects are completely different from regular projects in terms of their levels of aspiration, stakeholder involvement, lead times, complexity, and impact.
Flyvbjerg (2014) also established a specific jargon in the discussion of megaprojects. In addition to the Iron Law of “over budget over time, over and over again,” he also identified the four “sublimes” that drive megaproject development: the political, technological, economic, and aesthetic sublimes, and he introduced the Break-Fix Model as an explanation of the Iron Law of megaprojects. All these ideas have sharpened our understanding and defined the discussion of modern megaprojects.
Finally, Flyvbjerg provided a historical and longitudinal view about the rate of megaproject success. With a 90-year perspective, he claimed that nine out of ten megaprojects have cost overruns, and that overruns of more than 50% are not uncommon. Hence, delays are a way of life for too many megaprojects, as well as benefits not being realized. According to Flyvbjerg, in this interesting and very costly area of management, best practice is an outlier and average practice a disaster (2016).
However, Flyvbjerg himself admits: “This is not to say projects do not exist that were built on budget and time and delivered the promised benefits. The Guggenheim Museum in Bilbao, Spain, is an example of such a rare breed.” (Flyvbjerg, 2014, p. 11). That “ray of hope” motivated our research.
Numerous researchers have provided different perspectives for the typical characteristics of megaprojects, referring, for example, to complexity (Hass, 2009), technical and social complexity (de Bruijn & Leijten, 2008); and various dimensions of complexity such as time, cost, team composition, requirements, contracts, communications, risk, and technology (Kardes, Ozturk, Cavusgil, & Cavusgil, 2013; Kipp, Riemer, & Wiemann, 2008). Another common perspective in the investigation of megaprojects is studying specific case studies or arrays of cases in an industry. The industries include the following:
- Construction—Brady and Davies (2014), on two megaprojects in the United Kingdom; Brookes and Locatelli (2015), on the construction of 12 power plants in Europe; He, Luo, Hu, and Chan (2015), on the Shanghai Expo construction project in China
- Transportation—Chapman (2016) on a rail megaproject in the United Kingdom; Giezen (2012) on the Rotterdam metro network
- Energy—Van de Graaf and Sovacool (2014), on four energy megaprojects in Europe and in Asia
- Aviation—Shenhar, Holzmann, Melamed, and Zhao (2016), on the Boeing 787
- Information technology—Svejvig and Nielsen (2014), on an information technology project in a Danish bank; Gauld (2007), on a large New Zealand public hospital information system development
Finally, another important point of view used to analyze megaprojects is focused on management styles and causes of the high rate of megaproject failure (Chapman, 2016; Lenfle & Loch, 2016; Patanakul, Kwak, Zwikael, & Liu, 2016).
Contingency Theory in Highly Complex Megaprojects
First emerging in the 1960s, structural contingency theory suggests that, in order to succeed, organizations should be aligned with their environment (Burns & Stalker, 1961; Drazin & Van de Ven, 1985; Pennings, 1992; Thompson, 1967; Galbraith, 1982; Burgelman, 1983). It was only a question of time before researchers started realizing that projects could be viewed as “temporary organizations within organizations” (Lundin & Söderholm, 1995); hence, one can apply contingency theory to projects as well (Pich et al., 2002; Turner & Cochrane, 1993; Shenhar, 2001). The essence of these ideas is that “there is no one best way,” and “one size does not fit all” (Henderson & Clark, 1990; Eisenhardt & Tabrizi, 1995; Balachandra & Friar, 1997; Souder & Song, 1997; Shenhar & Dvir, 2007; Sauser, Reilly, & Shenhar, 2009).
The correlations between structural and environmental attributes have been well studied when the organization is the unit of analysis; however, they have been less studied in the realm of project management. The argument was that projects may exhibit variations in structure based on context and environment (Lundin & Söderholm, 1995; Payne & Turner, 1999; Shenhar, 2001; Lenfle, 2008; O'Connor & Rice, 2013).
The evolution of project management contingency theory was characterized by the introduction of specific context factors, which would distinguish projects by different dimensions, leading to specific contingency management decisions (Hanisch & Wald, 2012). For example, Henderson and Clark (1990) have used a 2 × 2 matrix to distinguish between the components of a product and the ways they are integrated. Wheelwright and Clark (1992) have classified projects based on product and process types. Turner and Cochrane (1993) have grouped projects based on how well their goals and their means are defined, and Pich et al. (2002) have used a project's information adequacy (or level of uncertainty) to distinguish between three strategies: instructionism, learning, and selectionism.
From Contingency to Complexity Theory
Contingency theory has been recently combined with complexity theory in studies of highly complex projects. But what exactly is complexity? According to Bar-Yam (2004), complexity is not just a matter of size, duration, or the number of parts that a specific system has. Complex problems or systems are the ones that do not have an immediate resolution or understanding. In other words, the resolution of complex problems is not easily achieved. The more human knowledge and technology advance, the more existing systems become complex. Organizations are becoming more complex and are dealing with increasingly complex environments. A decision by one individual could impact an entire organization, or one region may impact an entire country or the world. Another possible way to define complexity is: How hard (or easy) is it to describe the system and how hard is it to understand its description? However, complexity is also subjective, that is, it also depends on the recipient's level of knowledge (Bar-Yam, 2004).
Edmonds (1999, p. 72) defines complexity as the “property of a model which makes it difficult to formulate its overall behavior in a given language, even when given reasonably complete information about its atomic components and their inter-relations.” Looking into the behavior and inter-relations of the components, Simon (1972) states that complex systems are comprised of a great number of multiple-interacting components in which it is difficult to understand the behavior of each component or to predict the behavior of the entire system once its starting conditions are known. Complementing this view, Williams (1999) considers complexity as a condition between numerous elements in a system and the numerous forms they can relate to each other.
The discussions on complexity have broadened in recent years, encompassing multiple dimensions. For example, Geraldi et al. (2011) suggested an umbrella typology of five different dimensions of complexity. Howell et al. (2010) presented uncertainty as the most common research theme in project contingency theory (PCT), followed by complexity, team empowerment, criticality, and urgency; whereas, Bosch-Rekveldt, Jongkind, Mooi, Bakker, and Verbraeck (2011) demonstrated the elements that contribute to project complexity by introducing a technical, organizational, and environmental (TOE) framework for complexities.
It seems that numerous writers have attempted to conceptualize and specify levels of complexity; thus far, however, there is no standard framework for the assessment of a project's complexity (Shenhar et al., 2016). Based on the discussion above, however, in this article, we will adopt a wide interpretation of the concept of complexity. Following Simon's (1972), Edmonds’ (1999), Bar-Yam's (2004), and Geraldi et al.'s (2011) arguments about the difficulty associated with complex projects, we consider complexity as any factor that may inhibit a project from its timely completion. Such factors may include size, number of elements, and degree of interconnectedness; they may also include levels of uncertainty, and degrees of constraints, as well as risk. Uncertainty may involve technology, market uncertainty, politics, economics, and the environment, and constraints may involve time constraints, limited resources, restrictions, regulations, and so forth (Geraldi et al., 2011). Thus, by using such a wide interpretation of complexity, we can include everything that makes managing the megaproject difficult or challenging.
We have seen that any megaproject we have studied exhibits unique characteristics in all or almost all of the dimensions presented by Geraldi et al, which are: structural complexity, uncertainty, dynamics, pace, and sociopolitical complexity. We also suggest that looking at the complexity of megaprojects through these “lenses” may provide a deeper framework for understanding the nature of such projects and better tools for analyzing their challenges.
Transaction Cost Theory
Transaction cost evolved as an economical theory related to the cost incurred in making an economical exchange between institutions. The term originated in the economical thinking of the 1930s by Commons (1931) and became highly popular through the works of Nobel Laureate, Oliver Williamson (1981, 1985, 1996), who coined the term Transaction Cost Economics (TCE). This term is used today to explain a variety of behaviors. It departs from traditional neoclassical economics theory, which assumes absolute rationality in any transaction. Transaction cost economics involves considering transactions in their wider sense, including emotional interactions, informal exchanges, and even political benefits. In creating such transactions, buyers and sellers are often changing their relationships from a competitive environment to a bilateral monopoly, which means that the customer has a greater leverage over the supplier and further collaboration mechanisms emerge, such as partial ownership, revenue sharing, and so forth. Transaction Cost Economics involves specific assumptions about mechanisms of governance (Williamson, 1996), such as behavioral assumptions, governance structure, problematic property rights and contracts, discrete structural analysis, and remediability.
These characteristics may help in explaining the difficulties and challenges in megaprojects, on one hand and, on the other hand, in creating a deeper analysis of the benefits society derives from embarking on megaprojects.
Megaproject Success Criteria
Despite a wide body of literature on the issues of project success, there is still no consensus as to what success really means and no standard framework has emerged. Early on, studies used the common triple constraints framework of time, cost, and scope to assess the success of a project. For decades this was accepted as a standard way to measure a project's success and it was reinforced both by researchers as well as practitioners; this view, however, has gradually shifted in the last 20 years based on two trends. First, in the 1990s, Harvard's Kaplan and Norton introduced the idea that companies should look at their success with a broader perspective than just financial metrics. Their “Balanced Scorecard” model became well known (Kaplan & Norton, 1996), with its four dimensions of success: financial, customer, internal processes, and learning; later they updated their model to include a more strategic perspective (Kaplan & Norton, 2006). The second trend emerged when project management researchers started realizing that measuring cost, time, and quality for the assessment of project success is insufficient (Atkinson, 1999; Williams, 2005). Just as companies, projects should be viewed as strategic processes within a company and as a means to executing the company's strategy. Project success measures started to borrow from the enterprise success literature with the introduction of the multidimensional strategic concept for assessing project success (Lipovetsky, Tishler, Dvir, & Shenhar, 1997). These studies have introduced new dimensions for assessing a project. For example, Shenhar et al.'s model (2001) includes the dimensions of efficiency, impact on the customer, impact on the team, business success, and preparing for the future; and Samset's model (2010) includes efficiency, effectiveness, relevance, impact, and sustainability. Samset and Christensen (2015) also introduced the timing concept into the assessment of project success, suggesting that assessments should be made at the idea phase, as an ex ante evaluation; at the implementation phase, as an interim evaluation; at project completion, as final evaluation; and, later on, during the operational phase, as an ex post evaluation.
The introduction of programs as extensions of projects and as a collection of related projects signaled yet another development in our understanding of project success. New studies emerged dealing with program, rather than project success. For example, Shao and Müller (2011) introduced a sixth dimension—social effects—to the previous ones. Recently, Shao, Müller, and Turner (2012) introduced into their seminal quantitative study on program success, four dimensions of a program's capabilities: delivery, organizational, marketing, and innovation; and Turner and Zolin (2012) developed success scales for multiple stakeholders over multiple time frames.
This rich development in the study of project success was highly useful in our study. Megaprojects are clearly expanding the scope of projects and programs. While a megaproject can be viewed as a single project, its influence, endurance, and expected value are always beyond those of the immediate financial and functional results seen in regular projects. Many megaprojects will impact multiple stakeholders, future generations, and the society at large for centuries. Furthermore, using the arguments of transaction cost theory, we can clearly see that megaprojects are not simple transactions between producers and buyers—they create long-term relationships between contractors, sponsors, communities, government, and the public at large. The value created by a megaproject is often much more significant and sustainable than that in a simpler project contract. For example, the Apollo Moon landing will always be remembered as a historical landmark in human development history, and the English Channel Tunnel has forever reduced the geographical separation between the British islands and Europe, essentially making them one continent.
Based on these multiple perspectives, we will analyze the success of megaprojects using the following four dimensions: efficiency, customer, business/financial, and society:
- Efficiency. To what extent did the megaproject fulfill its cost, time, and other productivity goals? Although typically researchers distinguish between time, cost, and scope (the Iron Triangle), we look at time and cost together, since there is a strong correlation in most megaprojects between the two. In addition, we consider scope as part of the issues that concern the customer, as we show next. While megaproject efficiency has played an important role in many studies, we suggest seeing it as only one part of the integrated picture for assessing megaprojects. As history has proven, many megaprojects that initially did not meet time and cost goals, turned out to be huge successes in other dimensions, and, in retrospect, are viewed later on as great success stories.
- Impact on Customer/User. Every megaproject is initiated with a customer and user in mind. Consistent with many studies (e.g., Shao et al., 2012; Shenhar, Dvir, Levy, & Maltz, 2001; Atkinson, 1999), this dimension assesses to what extent the results of the project meet its scope and have an impact on customers and users. Are they satisfied with the end result? Are they using the products and deliverables of the megaproject? Did the project improve the customers’ quality of life, their effectiveness, efficiency, their business, and so forth?
- Business/Financial Success. Financial concerns are inseparable from megaprojects (Flyvbjerg, 2014; Shenhar & Dvir, 2007; Turner & Zolin, 2012). Such projects require huge investments by public or private sponsors and extensive efforts by performing organizations and contractors. Investors always expect getting their investment back, along with significant profits. Similarly, performing organizations need to cover expenses and keep their businesses growing.
- Impact on Society. This dimension is probably what distinguishes most megaprojects from other “regular” projects. It reflects the long-term impact that the project had on society, humanity, science, and the environment, as well as the well-being of countries and regions. Such an impact extends beyond immediate delivery and users’ experience concerns (Samset & Christensen, 2015; Turner & Zolin, 2012; Shao et al., 2012; Shenhar et al., 2001). As history shows, some megaprojects are initiated by prominent leaders for political reasons, whereas others are driven by environmental, aesthetic, or special events interests. For example, Paris’ Arc de Triumph, Washington's Lincoln Memorial, or Rome's Parthenon, are historical evidence of humanity's ingenuity, imagination, dominance, and pride. This view suggests that considering a megaproject's long-term impact on society is legitimate, be it in terms of environment, quality of life, scientific or artistic achievement, entertainment, ecology, or symbolic impact on the history of humanity.
By using these dimensions in our study, we acknowledge that megaprojects may not achieve all these objectives, and that possible tradeoffs need to be considered. This choice will also enable us to be less critical of a single success dimension in one megaproject or another. Instead, we look at megaprojects as potentially benefiting one or more groups of stakeholders (Turner & Zolin, 2012). Specifically, if things are not working in the short term, perhaps a longer time perspective will compensate our judgment of the projects we studied (Samset & Christensen, 2015).
As we will see, the criteria in selecting megaprojects for our study required that each project meet at least one of our four dimensions of success. This selection enabled us to see the megaproject phenomenon in its broader context, which considered both its short- and long-term aspects. Obviously, as we describe later, of special interest are those megaprojects that succeeded in all four dimensions.
Research Method and Data Description
The qualitative analysis method applied was case study research, which, as Flyvbjerg (2006) explained, is the most appropriate approach to supporting a detailed understanding of real-life situations. For the purpose of this study, we used a multiple case study research strategy (Eisenhardt, 1989; Stake, 2013), which enables the analysis of potential constructs of theory. The initial data were based on our data collection of more than 500 project case studies over the years. Each case was created by a team of two to three researchers who were trained in project management research and were guided to write their reports according to a common protocol of data collection, interviewing, and case report structure. Each case included information about the project's objectives, management processes, and outcomes. When interviews were not possible, the data used for analysis were based on open information sources and academic and professional articles.
As candidates for this study, we selected megaprojects only if they met each one of the following criteria:
- The project was a major undertaking of strategic importance to the sponsoring organization.
- The project met the definition of “megaproject” in terms of cost, volume, and complexity.
- The project was highly innovative in its concept, technology, design, or operational point of view.
- The project outcome was intended to have a major impact for a long time on its sponsors, users, and society at large.
Table 1: Collection of research megaprojects, industries, and success assessment.
The selection of final cases and their analysis were performed in steps: We first identified 42 candidate megaprojects that met all four selection criteria, according to our own judgment. This list was then presented to a team of two independent experts who were highly experienced project managers and executives and had not participated in the previous phases of the study or the data collection. We asked them to assess, as a team, the success of each one of the cases and indicate their agreement with each success criterion on a five-point scale, ranging from “totally disagree” to “totally agree.” The selected megaprojects were those that received a minimum score of 5 on at least one success dimension. We then reduced the scale to three levels: Success, Partial Success, and Failure. “Success” was ranked as level 5; “Partial Success” as level 3 or 4; and “Failure” as level 1 or 2. This selection resulted in a final group of 14 megaprojects, presented in Table 1 along with their industries and degree of success on each dimension.
In the final step of analysis, we performed structured content analysis using a pre-defined coding scheme based on literature review for categorization of success factors, and systematic accumulation of qualitative descriptions (Bullock & Tubbs, 1987; Eisenhardt, 1989; Krippendorff, 2004). An initial list of categories revealed 37 factors that were collected from previous literature and confirmed during the structured content analysis. To reach a concise operational shortlist, however, we combined similarly close factors by using a cluster analysis method, which is the process of grouping a set of objects or observations in such a way that objects in the same group are more similar to each other than to those in other groups. Specifically, we employed a manual density-based clustering data-mining process similar to the famous DBSCAN (Density-Based Spatial Clustering of Applications with Noise) algorithm (Ester, Kriegel, Sander, & Xu, 1996). This process groups together points that are closely packed by connecting points within certain distance thresholds, and where each cluster consists of all density-connected objects. The process is relatively simple and required no more than three clustering cycles. Each cluster was named at the end of each cycle, until no further clustering was needed, based on our assessment. A detailed discussion of the content and results of this process is provided in the analysis section of the article.
In the following sections, we briefly describe each one of the research megaprojects.
The Los Angeles Metro: The Red Line
The Metro Red Line subway construction project was the first 4.4 miles of the Los Angeles Metro, which was managed by the Rail Construction Corporation (RCC), a government-affiliated organization. In 1980, city voters approved funding for an integrated railway system. During execution, the project faced several technical challenges, such as hydrocarbon gases in the ground, abandoned oil wells, contaminated underground water, and high seismic activity. Despite all this, the project was completed and the line was opened to the public eight months ahead of schedule, with no budget overruns, in January 1993. Overall, the construction of the Metro was very successful with regard to the classical criteria of scope, quality, budget, and time. However, from the financial and public perspectives, the project failed to fulfill its expectations (Stapleton, 1993; Stopher, 1993). While expecting to see one million passengers during the first year of operation, the actual number was less than 60,000. As a result, the remaining phases of the project were dropped a few years later when the city realized that the longer-term mission of the system was not realized.
The Three Gorges Dam
The Three Gorges Dam (TGD) in Yiling District, China, is the world's largest hydroelectric dam, managed by a government-owned company. The dam is a concrete gravity type with a height of 607 feet and total water storage capacity of 39.3 billion square meters. The project was proposed in the early 1950s and officially approved in 1958. It did not start, however, until 1993, with construction planned to take place between 1994 and 2009 (Ma, 2010). Several additional projects were needed later to make the dam fully operational, thus delaying completion to 2011 (Xu, Tan, & Yang, (2013). The cost, which was estimated at US$22.5 billion, reached US$27.6 billion. The project involved significant environmental, ecological, and socio-economic implications, because it posed possible geological hazards to the surrounding area. The main long-term challenge involving the dam is mitigating its environmental negative consequences and securing its positive impacts, such as flood control, energy production, increased navigability of the Yangtze River, and access to fresh water (Fu et al., 2010).
The English Channel Tunnel
Although the initial idea to connect Britain with the European Continent was raised as early as 1802, because of political, technical, and financial reasons, it was not officially launched until the 1980s. This special project required a treaty between Britain and France, which was signed by the two countries in 1987. The tunnel was a build-own-operate-transfer (BOOT) project with a 65-year concession. The project's actual costs ran 80% over budget, and its financing costs were 140% higher than forecasted (Flyvbjerg, Buzelius, & Rothengatter, 2003). In addition to the engineering and technical complexities of building a tunnel of this magnitude, it required an extremely complex organization that had to deal with cultural differences, political and financial complications, conflicts of interest, lack of leadership at the highest level, a poorly written contract, and conflicting health and safety concerns (Shenhar & Dvir, 2007). Its unique organizational structure and financing system, which had to establish mutual adjustments and coordination of stakeholders, was not applied. As a result, the project did not meet its original business objective (Genus, 1997; Chang, 2013). In retrospect, however, from the public good's perspective, the Channel is clearly a successful project. Not only does it continue to transport people and goods across Europe, it continues to create economic value to all involved European nations.
The Sydney Opera House
The original project plan of the Sydney Opera House, as envisioned by the New South Wales government in the 1950s, included a schedule of five years and an estimated budget of about AU$7 million. When its doors were eventually opened only in 1973, it was 16 years later than scheduled and with an actual cost of AU$102 million. As a public construction project aimed to achieve long-term or infrastructure goals, the project was plagued by numerous stops and starts and endless political battles. From a traditional view of project success, however, the Sydney Opera House project was a failed project. Yet, the project was eventually perceived as a success story, creating fame and a steady income to the city of Sydney, and forever remains one of the most fascinating buildings in the world.
Boeing 787: The Dreamliner
The 787 Dreamliner project was developed by Boeing in the early 2000s with the intent of responding to the growing demand for next-generation, advanced, and highly efficient airplanes. The project was approved in 2004 with a schedule of four years. However, the completion of the project was delayed by almost 40 months and its cost, which is estimated at about US$40 billion, was “well more than twice the original estimate” (Mecham, 2011). The reasons for such extensive delay involved technological and organizational challenges (Altfeld, 2010; Shenhar et al., 2016). From the technology perspective, the challenge was to design an aircraft body using lightweight composite materials and to develop new avionics and computing systems (Ye, Lu, Su, & Meng, 2005). Additionally, from the organizational perspective, Boeing outsourced an unprecedented portion of the design, engineering, manufacturing, and production to a global network of 700 local and foreign suppliers, which resulted in more than 70% foreign development and transformed the traditional supply chain into a development chain (MacPherson & Pritchard, 2005; Tang, Zimmerman, Nelson, & James, 2009). The company was struggling with these challenges for more than three years until it finally went into service. Despite the delay, it seems that the 787 Dreamliner created a well-desired plane, which will continue to produce extensive financial business results in the future.
Denver International Airport
In 1989, Denver voters mandated the construction of a new airport, since Denver's Stapleton Airport had outgrown its maximum capacity. The construction work started in November of that year, with a planned schedule of less than four years. Although most of the construction progressed as planned, the overall project could not be completed due to the innovative, state-of-the-art automated baggage system that had to be integrated into the new airport. The development of this system, which was to be the largest and most advanced in the world, encountered numerous mechanical and software problems (Szyliowicz & Goetz, 1995; Montealegre & Keil, 2000). Eventually, to avoid further delays, management agreed to integrate a traditional baggage system to enable the opening of the airport. The challenge involved in this relatively small subsystem was underestimated when all components in this projects were managed in the same way.
The Hubble Space Telescope
The Hubble telescope project was conceived by NASA in the 1960s, formally funded in 1977, and prepared for launch in 1986. In early 1990 it was put into orbit, 370 miles above the Earth's surface, when it was noted that there was a distinct spherical aberration in the telescope's primary mirror. In 1993, the defect was repaired and upgraded in several consecutive missions. Hubble is operating and is planned for an additional 15 to 20 years of service (Harwood, 2013); it involved the incorporation of non-existent technologies that needed to be developed during the project's effort, which thus classified it as a super-high-tech project (Shenhar & Dvir, 2007). On the managerial aspect, the project enjoyed top management support, in which Congress and several NASA centers worked together in full concert. Although originally perceived otherwise, in the end, it appears that NASA was competent at the technical, organizational, and personnel management challenges (Chaisson, 1998). As the telescope went online, Hubble continues to soar with continuous discoveries, erasing the negative image people still hold of it in their minds (Zimmerman, 2010). For a long time, the government, scientific community, and society in general have perceived Hubble as a failure; from a strategic and retrospective point of view, however, it can indeed, be considered a success.
London 2012 Olympic Park
In general, the Olympic Games are a unique mega event, which involves a complex construction megaproject, national social and environmental initiatives, and knowledge mobilization challenges (Parent, MacDonald, & Goulet, 2014; Grabher & Thiel, 2015). Its implementation started in July 2005 when London was awarded the 2012 Olympic and Paralympic Games. As a time-critical project, with a deadline defined by the opening date of the Games on 27 July 2012, the construction work, composed of 70 projects, was completed one year ahead of schedule; but the original budget, which was almost US$4 billion (£2.4 billion), was finally increased to more than US$15 billion (£9.3 billion). The Olympic management committee, the municipality of London, the project committee, and the executive managers worked together as an integrated organization throughout the project life cycle in order to plan, design, execute, and deliver as specified by LOCOG (London Organising Committee of the Olympic Games). The management style that enabled the completion of the complex project was based on a layered structure of systems integration; it required careful coordination of and communication with multiple internal and external stakeholders with different interests and priorities to manage the interfaces between systems (Brady & Davies, 2014; Davies & Mackenzie, 2014; Davies, 2016).
Very large information and communication technology (ICT) projects, do not typically fit the formal definitions of megaprojects. Yet it is interesting to review such an effort as an example of a megaproject in this industry. Typically, however, as Flyvbjerg noted (2011), large ICT projects run over time and over budget and fail to deliver many of the requirements. The NOVA project, however, demonstrates a successful implementation of a highly complex IT platform transition in the mid-sized Danish Bank, Jyske Bank (Svejvig & Nielsen, 2014). The project was implemented between 2010 and 2012, through 147 sub projects. The project employed 900 workers who were inspired by the Apollo project, as a leading “metaphor for the NOVA's journey” (p. 40). Based on data collected through interviews with various stakeholders, Svejvig and Nielsen (2014) concluded that clear vision, inspiring leadership, and highly structured project communication and documentation systems were keys to its success.
The World Trade Center
Although the original World Trade Center (WTC) complex was destroyed in the September 11 attacks, it is still an example of project management at its best. The original World Trade Center was a large complex of seven buildings in New York City, which was built to revitalize lower Manhattan and serve as the first visible sign that the economy of New York City was transforming from manufacturing to service (Birch, 2006). In 1962, Yamasaki was selected as the lead architect, and the actual construction work began in 1968. At the time of their completion, the “Twin Towers” were the tallest buildings in the world. The project involved technical challenges, such as building to the Bathtub system, which was aimed to resolve the problem of reaching bedrock through the water table of the Hudson River; the elevator system, aimed to transport the 50,000 tenants working in the towers; and a revolutionary exterior structural column design. In addition, the project involved many political and logistical issues related to the selection of the site and implications for displacing existing businesses and residents. The project was well organized for its level of complexity and stakeholder involvement. In retrospect, throughout the entire project, management demonstrated the right approach with leadership, which created high energy and motivated the team, and a strategic, long-term perspective, which was focused on the economic, environmental, social, and political successes (Gillespie, 2002).
The Mall of America
The Mall of America is the largest retail mall and entertainment complex in the United States and encompasses more than 520 stores, dozens of restaurants, nightclubs, theaters, a mini-golf court, and an indoor theme park. The project was initiated in 1988 when the city of Bloomington, Minnesota, requested proposals for development of the 78-acre site. Preliminary design began in March 1989 and actual construction started in June 1989. The project was new with respect to size and design challenges, including acoustical control, extensive underground systems, water attractions that created high humidity, and skylights that required developing new software to support special 3D computer models to predict heat gain. The fast track construction method applied in this project mandated a flexible management style, which enabled the Mall of America to open its doors to the public on 11 August 1992, thus completing the project on time albeit with some budget overrun. Since then, it receives more than 40 million visitors annually, although it was originally targeted to host only 3 million visitors per year. “Joe Talentino, president of MSA (Melvin Simon & Associates, the managing partner and overall project manager), attributes the earlier opening to several factors, including close interaction of building team members, absence of strikes, and hands-on involvement by the owner” (Wright, 1992).
The Kepler project is a special purpose space mission in the NASA Discovery Program. Its goal is “to survey our region of the Milky Way galaxy to discover Earth-size or larger planets in or near the habitable zone of solar-like stars and determine how many of the billions of stars in our galaxy have such planets” (NASA, 2009, p. 11). The spacecraft was launched on time, on 7 March 2009 to detect terrestrial planets, both rocky and Earth-size, around other stars, in search of possible life in the universe. The project was managed well and followed well-defined procedures and plans (Shenhar et al., 2005). The project was planned for 3.5 years of operation, with a budget of US$600 million. It was extended to more than 7 years in November 2012, when its primary mission was about to end and an independent panel of senior scientists recommended Kepler be kept alive through 2016 (Clark, 2012). The novelty of this breakthrough project required careful attention to the management of requirements, and the complexity of the system called for intensive integration and formal procedures for communicating and coordinating among project teams.
Guggenheim Museum Bilbao
The museum of modern and contemporary art, located in Bilbao, Spain, was designed and built by the well-known architect Frank Gehry. It was initiated in 1991 with the goal of increasing the city's sources of income. On 18 October 1997, the museum, which has special curves on the exterior and a unique interior designed around a large light-filled open-roofed entrance hall, opened. This megaproject completed on time, on budget, and it met the requirements. In an interview with Bent Flyvbjerg (2005) for Harvard Design Magazine, Gehry explained the museum's success: First, he ensured that what he calls the “organization of the artist” prevailed during construction, in order to prevent political and business interests from interfering with the design. In addition, detailed drawings and plans were prepared in advance to enable realistic cost estimations that could be controlled. Third, the project team used technology for digital design models, which facilitated precise quantification of the elements of the building. The strategic success of the Guggenheim Museum Bilbao is assessed by the significant growth of tourism, which has a positive impact on Bilbao (Plaza, 2000), as well as the museum's effects on Bilbao's image, tourism, and the local economy (Plaza, 2006).
The Apollo program was initiated in the early 1960s by the late President John F. Kennedy with the vision of landing the first American on the Moon before the end of the decade. The program included a three-part spacecraft to take two astronauts to the Moon's surface, support them while on the Moon, and return them to Earth. It was clear that this program, which encompassed 17 missions, involved extremely innovative developments, including response to radiation, meteoroid hazards, and threats presented by the unknown lunar surface environment. Based on a risk-aversion strategy, everything was tested and retested, with numerous safety mechanisms put in place to ensure nothing could go wrong. The final configuration and the design freeze had to be significantly delayed until all unknowns were resolved. The Apollo program was part of NASA's portfolio activities at this time, with an increasing share of budget—starting at 10% in 1962 and increasing to 70% in 1967 (Gisler & Sornette, 2009). The Apollo program was originally funded with US$3 billion, but later requested and received US$20 billion. The actual plan, however, was US$13 billion, with the remainder secured as reserved contingency. That decision was appropriate, since the actual final cost of the program was US$19.4 billion (Stine, 2008). The successful Moon landing of Apollo 11 in July 1969 symbolizes a victory for man, not only on unknown space territories but also on new and far-reaching technologies. Five subsequent Apollo missions also landed astronauts on the Moon, the last in December 1972. Although some have argued that “the Apollo program was a genuine bubble . . .” (Gisler & Sornette, 2009, p. 67), it is considered an exceptional triumph that laid the scientific foundation for developments in many areas of advanced technology, including avionics, telecommunications, and computers.
Analysis and Findings
As shown in Table 1, each megaproject selected for our sample was successful in at least one dimension. Our objective was to identify the pivotal factors that were responsible for the achievements of the most successful megaprojects. As mentioned, we began with evidence from the extensive body of literature on project success factors. For example, in their classical study, Pinto and Slevin (1987) identified nine factors: clearly defined goals, competent project manager, top management support, competent project team members, sufficient resources allocation, adequate communication channels, control mechanisms, feedback capabilities, and responsiveness to clients. Pinto and Slevin (1988) also analyzed the impact of a similar list of ten factors: project mission, top management support, project schedule plan, client consultation, personnel, technical tasks, client acceptance, monitoring and feedback, communication, and troubleshooting, at different stages of the project life cycle. Belassi and Tukel (1996) reviewed project management literature and classified success factors into four groups: related to the project, related to the project manager and team members, related to the organization, and related to the external environment. After reviewing 60 relevant articles, Balachandra and Friar (1997) presented a total number of 72 factors related to market, technology, organization, and environment. In his search for a comprehensive set of factors, Cooke-Davies (2002) realized that his list of 12 factors relates to three perspectives: leading to project management success, leading to a successful project, and leading to consistently successful projects. Dvir and Shenhar (2011) summarized their findings on successful projects in a list of seven factors: exhorted focus on the creation of competitive advantage and value; a long period of project definition; unique project culture; a highly qualified leader with unconditional support; maximum use of existing technologies; flexible teams that adapted quickly to technology and changes; and strong partnership, ownership, and pride. As also mentioned earlier, once we compared the literature with the outcomes of our sample project content analysis, we ended up with a list of 37 items, which were further processed via cluster analysis.
The iterative cluster analysis process reduced the number of factors into smaller groups of similar nature, until no further reduction was possible. For example, factors such as clearly defined goals, project mission, and exhorted focus on exceptional value were eventually grouped together with other factors into the first main factor of “clear strategic vision.” Similarly, adequate communication, control mechanisms, responsiveness to client, and strong partnership, ownership, and pride ended up as part of the second factor of “total alignment.” Factors such as using existing knowledge and collaboration, flexible teams adapting quickly to technology and changes, and classical risk management were parts of the factors that made up the third main group of “adapting to complexity.” Overall, megaproject success was distinguished by three different (and unrelated factors): clear strategic vision, total alignment, and adapting to complexity (Figure 1).
Clear Strategic Vision
From their early start until completion, all successful megaprojects are guided by a clear strategic vision. A vision is a simple and exciting articulation of the project's outcome, which is defined in words that everyone can understand and imagine. It simply depicts the state of the world after the project is completed. The strategic part means that the project had set a highly desirable and important long-term goal, which is expected to have an enduring impact beyond its immediate results. There is also a clear idea on how to achieve this vision. A vision is often described in visual and emotional ways; other times the vision describes how people's lives will change, improve, or be simplified once the project is completed. For example, you will be able to “travel from Paris to London in less than two hours.”
Figure 1: The main ingredients of megaproject success.
We must emphasize that a vision does not deal with profits or financial performance, nor is it described in technical terms. The best visions are simple and yet able to evoke emotional reactions. For example, the Apollo program had the simplest and most powerful vision, defined by President Kennedy in 1961: “Put a man on the Moon and bring him back before the end of the decade.” These simple words were clear to every human being, and they created waves of emotions and sympathy everywhere. Remember also that the vision of Apollo 13, the rescue mission of the three astronauts in a damaged vehicle on their way to the moon, was: “Failure is not an option.” The vision of the Mall of America was: “Build the largest and most fun mall in America.” The vision of the World Trade Center was to build a commercial and trade center that would revitalize the economy in Lower Manhattan. And the vision of Kepler was: “Looking if there are others like us out there.”
Visions serve all stakeholders and many goals. They articulate in simple terms what the project is all about—customers know what to expect; sponsors and performing organizations have a clear idea of what whey will create and how to communicate and spread the word about it; and employees comprehend what they are a part of, and clearly understand how their work can contribute to the new creation. Finally, a strong vision is strongly linked to exceptional leadership. Great leaders understand the power of exciting visions and know how to articulate and communicate them in an effective way to inspire and motivate all people involved. And, surely, they know how to combine vision with the right strategy to implement it (Patanakul & Shenhar, 2012).
All successful megaprojects in our study were characterized by full alignment of all parties with the goals, the means, and the difficulties expected. Such alignment is not easy to achieve. The planning and implementation of a megaproject necessitate coordination of a large network of stakeholders with different interests and agendas. In this network one can often find the sponsor; the performing organization; contractors; subcontractors; customers and users; and numerous political, financial, and societal organizations and agencies. First and foremost, the sponsor and the performing organizations must have a clear and shared understanding of the vision and how to achieve it. Similarly, customers and users should be involved upfront and their voices should be heard and considered; after all, they will be impacted by the result and they will become a major factor in asserting success at the end. Finally, a successful megaproject must be aligned with the community and environment in which it functions and it involves cities, neighborhoods, political figures, environmental groups, and advocates. To achieve total alignment, megaprojects must create clear rules, policies, and guidelines about communication, reporting, terminology, common tools, and so forth, and make sure all parties are following them. Lack of alignment is quickly noticed, since it can cause conflict and huge delays. One cannot expect to successfully put a huge creation in a public environment or neighborhood without the support and alignment of all those who may be affected.
The most successful megaprojects were aware of this need and worked very hard to achieve such alignment. For example, the London Olympic Village planners and managers built a coordinated network of contractors using a set of common rules and risk-sharing agreements that created a mutually strong interest for all. Similarly, the builders of the first World Trade Center in Manhattan were managed by the executives of the Port Authority, which was also the sponsor of the project. They were tightly aligned with New York City's government as well as many merchant organizations, financial institutions, restaurants, and other businesses.
In contrast, the Los Angeles Subway project was defined and managed as an engineering design-and-build project. While it was created to serve millions of passengers, there was no real connection or alignment with the citizens of the city during the project. No one prepared potential travelers for the new form of transportation, and no incentives were offered for using it during the first period. Although the project was highly efficient and completed on time, it was no wonder that very few people actually used it. A better alignment with end users could have made this engineering achievement a highly desirable and profitable service success.
Adapting to Complexity
Complexity is perhaps the most problematic area in understanding the managerial issues of megaprojects. Ironically, it is also less discussed in the literature. Yet, many failures in projects could be attributed to insufficient understanding of the essence of complexity and failure to deal with it properly. Megaprojects are highly complex creations of humanity, built to serve nations, cities, societies, and sometimes millions of people. By nature, megaprojects involve an enormous degree of complexity, but few organizations know exactly how to assess the degree of complexity in their projects and to determine how to manage them. Although some writers have tried to conceptualize and specify levels of complexity, thus far, no common framework has been established for assessing a project's complexity (Shenhar et al., 2016).
As mentioned in the theory part, in this article we have adopted the broad view that complexity is any factor that may inhibit a project from timely completion; in other words, anything that makes managing the megaproject difficult or challenging. Thus, in the context of a megaproject, one may view complexity and challenge as synonyms. By adapting a project to its complexity we mean that management must understand the unique challenges of each project and select the appropriate management style, resources, organizations, processes, skills, equipment, tools, and technology to meet these challenges.
Obviously, different megaprojects have varying degrees of complexity and clearly, “one size does not fit all” (Shenhar, 2001). Therefore, effective management of a megaproject calls for understanding the degree of complexity and adapting its management to its specific kind and degree of complexity. Shenhar and Dvir (2007) offered a framework (The Diamond Model) for classifying a project according to four dimensions (novelty, technology, complexity, and pace) and adapt its management to its unique classification. According to this classification, almost all megaprojects will be considered “arrays” on the Diamond's dimension of system complexity. However, using the wider perspective of this article, each megaproject should learn to adapt itself to its unique complexities in all dimensions to overcome its specific challenges. Obviously, other challenges should also be considered, such as Pich et al.'s (2002) rate of change, or Geraldi et al.'s (2011) socio-political complexity.
The best managed projects in our study followed this concept and their managers clearly adapted appropriate ways of dealing with their complexities. For example, in the Apollo project, NASA understood that going to the moon is extremely complex, risky, and uncertain. The agency put in place numerous mechanisms for testing and examining everything. Nothing was left to chance, and the mind set was: “it is unsafe to fly, unless there is proof that nothing can go wrong.” In contrast, Boeing 787 Dreamliner's program adopted a style that was used before in its previous highly successful 777 program. The difference was that the Dreamliner had used the new technology of composite materials, which was never used on such a large scale; it also used a new business and profit-sharing model as well as a new organization for the development effort. These decisions made the Dreamliner a high-tech array project, whereas it was managed as a medium-tech system project (Shenhar et al., 2016). The Dreamliner's extensive delays were clearly a result of selecting the wrong style for the degree of challenges involved.
Table 2 summarizes our findings regarding the presence of these elements in our research cases; it also shows the number of dimensions rated as success out of a total of four dimensions, as listed in Table 1: efficiency, impact on customer/user, business/financial success, and impact on society.
|Project Name||Clear Strategic Vision||Total Alignment||Adapting to Complexity||Success Score Out of 4|
|1||Los Angeles Metro||–||–||+||1|
|2||Three Gorges Dam||+||–||–||1|
|3||The Channel Project||+||–||–||2|
|4||Sydney Opera House||+||–||–||3|
|5||Boeing 787: The Dreamliner||+||–||–||3|
|7||Hubble Space Telescope||+||+||–||3|
|8||London 2012 Olympic Park||+||+||+||4|
|10||World Trade Center||+||+||+||4|
|11||Mall of America||+||+||+||4|
|13||Guggenheim Museum Bilbao||+||+||+||4|
Table 2: Megaproject success factors.
The megaprojects in our study were completed with varying degrees of success. Perhaps not surprising, we found a typical and consistent pattern in the most successful megaprojects. Seven megaprojects have succeeded “across the board,” resulting in high efficiency, highly satisfied users and customers, good financial rewards to their performing organizations and sponsors, and creating an enduring impact on society and the public good. There is no doubt that Apollo, Bilbao's Guggenheim, the Mall of America, London Olympic Park, or Kepler belong to this category. Other projects succeeded in only one, two, or three dimensions.
Our findings suggest that all highly successful megaprojects knew how to integrate all three elements in their management by setting a clear strategic vision, which is communicated to all those involved or who may be impacted by the project; they also made sure that all stakeholders are fully aligned with the project's vision, are committed to its success, and knew their role in making it work; and, finally, they knew how to identify the unique complexity and specific challenges involved in the project and to select the right approach to dealing with this complexity.
As we have seen, not all megaprojects in our study followed these three rules. For example, the Sydney Opera House had a clear vision set by the architect from the outset. However, there was lack of alignment between the city, the architect, and the political system around it, which led to extensive conflicts and unchecked spending, and the project has failed to estimate the levels of complexity involved in such a beautiful but complex structure. In fact, only late into the project's construction, did its builders learn how to produce the orange-shaped roof slices, which made its structure so unique. Boeing 787 failed to align all elements and stakeholders into one coherent development machine. When outsourcing the design and development work to its network of 700 subcontractors, they assumed the work would be done quickly and cheaply; unfortunately, however, some of these subcontractors proved inadequate at doing the job. They lacked the training and guidance from the main contractor on how to develop the components for this highly complex and uncertain aircraft.
It is interesting to note that of the remaining megaprojects in this study, five have failed to achieve efficiency goals and had extensive delays; however, they were quite successful in the other, longer-term dimensions. This group includes the Denver Airport, Channel Tunnel, Sydney Opera House, Boeing 787 Dreamliner, and Hubble Space Telescope. It is notable that they all had a good strategic vision. What was missing in this group was either the total alignment and/or the ability to adapt to complexity. Not surprising, it seems that vision is the most critical element in the long-term success of a project. No vision essentially guarantees failure; however, lack of alignment and/or failure to address a project's complexity, may often hurt on-time delivery, and thus the financial performance of a megaproject.
To complete our study's lessons on why megaprojects succeed or fail, we make two observations on past events: In the first observation, we note the distinction between the beautiful buildings of Guggenheim and Sydney and their stories. The Guggenheim Museum in Bilbao, Spain, was designed and built by the American architect Frank Gehry. Gehry created his own project management organization, which included designers, planners, financial analysts, marketing managers, and builders. Before accepting any job, Gehry insisted that his organization have complete control of the project and that he will make all artistic, as well as financial and managerial decisions. Obviously, he set the vision, and at the same time, created a clear alignment of all parties. Gehry was also aware of the expected difficulties, challenges, and complexities, and he made sure nothing was missed. No wonder all his buildings, despite their uniqueness and complexities, were completed on time and within cost. The contrast to the Sydney Opera House is striking: although having a similar unique vision and inspiring beauty of design, the Sydney Opera has miserably failed to meet the project's time and cost goals. It was significantly lacking in the other two factors: lack of stakeholder alignment and failure to address all complexities upfront.
The second observation involves NASA's Space Shuttle program, which was not included in our sample since it failed on many fronts; however, its story is relevant to our study. The Shuttle was late on delivery; it carried a huge financial cost and did not fulfill the expected cost saving in space flights; furthermore, it failed to serve the United States’ long-term human space flight capabilities. Once the Shuttle's was retired, America was left for years without human space flight capability and U.S. astronauts had to get to space on Russian Soyuz spacecraft. Finally, after four decades of program development and operation and two tragic shuttle accidents, which claimed the lives of 14 astronauts, the program's impact on society is still questionable. Based on the findings of our study, it is not surprising to learn that the Shuttle had no clear strategic vision. After the moon landing program, NASA was looking for the next big program and in 1969, planned to go to Mars by building a three-component program: a Shuttle, a Space Station, and a Mars Landing module. The government at that time, however, had lost interest in space exploration and cancelled two of the suggested components, keeping the shuttle as the only program to be continued—but without a clear vision of its mission. In addition, there was no substantial alignment between NASA, the government, and the public; furthermore, the program was badly underfunded. Finally, NASA did not fully identify the program's complexities and uncertainties. In an effort to secure the program's funding, NASA claimed that the vehicle could be built of existing components taken from previous programs; thus, NASA made a commitment it could not meet. In reality, the program suffered from extensive delays and numerous breakdowns; shortcutting the design and committing to immature technologies resulted in a suboptimal design and an extremely hazardous vehicle. Lacking all three factors needed for megaproject success, its lessons demonstrate how important it is to take care of all critical elements: vision, alignment, and adaptation.
Since megaprojects will continue to play an important role in society, we should learn to do them right. This study has taught us an important and simple lesson: the three necessary elements of success should be established as a standard and a “must have” in any project before it starts. The formula for success is relatively simple: Make sure you have the right vision linked to strategy, and communicate it to all involved and impacted parties; build a totally aligned network of stakeholders, and adapt the megaproject to its specific levels and types of complexity and challenge. However, while these elements are simple to understand and recognize, in reality they are difficult to implement. For a good strategic vision, you need great leaders who understand the power of vision and strategy and know how to articulate them in an easy way. Since there are many conflicting interests in a megaproject, you need to carefully build the necessary alignment and commitment of all parties and you must learn the secrets of complexity and how to prepare a project according to different types of complexities and challenges. In the end, failure is not inevitable; with the right vision, alignment, and adaptation, future megaprojects may be better prepared for their challenges and bring better value to society.
This study is not free of limitations. First, our sample may not be representative; it was based on convenience and availability of data. It may also not cover the entire spectrum of megaprojects around the world; as demonstrated, many of our projects were in the construction industry. This may not be surprising since, historically, construction has been the origin of very large projects. Other industries, however, may play more important roles in the future of megaprojects.
Finally, this study may open new avenues for further research. For example, we may need to study megaprojects in specific industries or sponsors, as well as transformation projects. How are construction megaprojects different from aerospace projects, and how do government-funded megaprojects compare with privately funded efforts? Another area of interest is the further study of megaproject complexity. As perhaps the most complex undertaking of society, what impact does complexity play in understanding and managing them? Yet another topic is the study of technology in megaprojects. Perhaps we need to develop specific and dedicated management tools for megaprojects. And still, another possibility is searching for other parameters of success, which were not detected in this study. Future studies of megaprojects will take endless routes, and surely, future generations of researchers may continue to show us better ways of managing them.
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Aaron Shenhar is a Professor of Project Management and Leadership. After his aerospace career, he held positions at the University of Minnesota, Minneapolis, Minnesota, USA; Rutgers University, Camden, New Jersey, USA; Stevens Institute of Technology, Hoboken, New Jersey, USA, and Tel-Aviv University, Ramat Aviv, Tel Aviv, Israel. He is founder and CEO of the Diamond Leadership Institute, a knowledge-based company, focusing on training and consulting in project management, leadership, and strategy. He can be contacted at firstname.lastname@example.org
Vered Holzmann is a lecturer in the Faculty of Management, Tel-Aviv University, Ramat Aviv, Tel Aviv, Israel, and researches the topics of innovation and entrepreneurship, project management, and strategy. She manages international projects in the fields of higher education, information systems, and software development and has served as vice president for research and academic affairs in the PMI Israel Chapter. She can be contacted at email@example.com
Project Management Journal, Vol. 48, No. 6, 29–46
© 2017 by the Project Management Institute
Published online at www.pmi.org/PMJ