Like almost every city in the world, Vancouver is feeling the effects of the worst economic slump in decades. But unlike most cities, it's preparing to host one of the biggest events in the world, the 2010 Winter Olympic and Paralympic Games.
Facing heavy scrutiny, the city seems to already be lowering expectations. Yet at the same time, it has the opportunity to combine forward-thinking innovation and a long-standing commitment to sustainability and technology on the world's stage.
Project managers across industries are injecting innovation into projects and processes—doing more with less and building social responsibility into every possible project to cement the city's spot as a sustain-ability leader.
Vancouver has a rich history of environmental awareness. Advocacy giant Greenpeace was founded there in 1971—and the city's sustainability tradition continues today. British Columbia currently has 42 percent of all LEED (Leadership in Energy and Environmental Design) -certified buildings in Canada, most of them in greater Vancouver. The city is also home to roughly 90 alternative energy companies generating approximately CA$750 million in revenues, according to the Vancouver Economic Development Commission.
The city government has demonstrated a keen interest in supporting the growing industry.
“To make sure Vancouver becomes a leader in green-tech research and innovation, we will…pursue incubators and incentives for green enterprise and technology. These are among the fastest growing sectors in the global economy now. We are fortunate to have a potent cluster here and urgently need to build on that success,” the city's mayor Gregor Robertson said in a March speech.
PHOTOS COURTESY OF VANOC
To that end, the Canadian government's Eco Energy for Renewable Power Program has committed CA$1.48 billion to energy conservation and renewable energy projects.
Vancouver is also staking its claim in the information technology and communications (ICT) sector. There are more than 6,000 ICT companies in the area, making it an integral part of the city's economic backbone.
Despite a decidedly progressive, 21st century outlook on both its projects and economy, Vancouver hasn't been insulated from economic distress.
According to a March report by The Conference Board of Canada, Vancouver's economy is expected to contract 0.9 percent in 2009—the first decline since the organization started tracking the city's economy in 1987.
Although that drop isn't as bad as other cities, it has hit at all levels, according to the Vancouver Economic Development Council's second quarter report.
The study did point to the mining industry as a “bright spot,” noting the region's coal and copper mines are on the rebound. It's a significant development given that British Columbia is home to more than 800 global mining and mineral firms that generated CA$8.4 billion in gross mining revenues in 2008. But not all mining companies weathered the storm. Complicating matters is limited access to credit, which has prevented some from conducting exploration efforts and even caused others to scale back or close down projects.
GREENING THE GAMES
The host city for the 2010 Winter Olympics is definitely going for the gold, aiming for the U.S. Green Building Council's LEED (Leadership in Energy and Environmental Design) gold certification for all of its Olympic venues.
But all that eco-friendliness comes at a price. Ann Duffy, Vancouver Organizing Committee (VANOC) corporate sustainability officer, told The Globe and Mail in August 2008 that green building construction can cost between 2 percent and 7 percent more than conventional construction. Although that may seem a steep price to pay, VANOC predicts that cost differences will be recouped in five years through lower operating expenses.
Included in the roster of green projects is the Vancouver Olympic/Paralympic Centre, which officially opened in February. With seating for 5,600 spectators, it will host curling events for the games. When the Olympics leave town, the CA$88 million venue will serve as a multipurpose community recreation center housing an ice hockey rink, gymnasium and library. As part of the quest for gold, the design emphasizes water conservation by capturing rainwater to flush toilets and using low-flow water systems throughout the building. Combined, those efforts will reduce water usage by as much as 30 percent.
But the center isn't the only project racing to the LEED certification finish line. The Olympic and Paralympic Village Vancouver, built on a former industrial brownfield site, is slated for completion in November.
Once the games are over, the village will serve as the flagship for the first phase of a sustainable community. Called Southeast False Creek, it will include housing for about 3,000 residents. Each building in the community will include rainwater gathering and sewer-heat recovery systems that will provide water and space heat.
But even the best designs won't allow the event to have zero environmental impact.
“It's simply not possible to totally eliminate carbon emissions from the 2010 Winter Games,” John Furlong, VANOC CEO, said in a news release. “We are now actively working to secure partnerships that will enable us to neutralize our emissions by investing in projects that will remove or avoid an equivalent amount of carbon dioxide from the atmosphere.”
Construction and real estate are also clearly feeling the crunch. In the first two months of 2009, three major Vancouver condominium projects were killed and two more stalled, with developers citing sluggish pre-sales and concerns about a worsening economy.
Despite that bad news, there's a flurry of project activity in Vancouver.
“British Columbia continues to demonstrate stability, with 892 large-scale construction projects, valued at an estimated CA$184.2 billion, planned or underway throughout the province,” Iain Black, the city's Minister of Small Business, Technology and Economic Development said in a June statement.
But many of those projects are based on the Olympics. And in April, John Furlong, CEO of the Vancouver Olympic Organizing Committee (VANOC), told The Vancouver Sun the organization “will be very happy to get to break even” with the CA$1.76 billion event.
THE NEW HIGH-TECH REALITY
The rise and fall of Vancouver's telecom and Internet companies over the past decade has sparked “a great shift in the way projects are managed,” says Kouros Goodarzi, PMP, who works in research and development project management at McKesson Medical Imaging Group, Richmond, British Columbia.
“What a project manager was expected to do in an Internet company…10 years ago was lead teams of young and energetic software developers to deliver code as fast as the marketing department could find paying customers,” he says.
That's no longer the case. Now, the focus has shifted to quality, security and sustainability.
“The abundance of competition in many fields that only had one or two contenders also contributes to the fact that project managers now need to do things right the first time, with little or no room for mistakes,” says Mr. Goodarzi.
The increased competition is also putting a premium on people skills.
“Most of the skills required to address this market are based on the ability of the project managers to show leadership and take on responsibilities,” he says. “The shift from technical management to leadership has been gradual but obvious.”
Given that, the delicate process of lowering stakeholder expectations has already begun.
“These will be good games, not spectacular,” Lucia Montanarella, the director of VANOC press operations, told reporters in August. “My vision is gone. I live in damage control now. All the ‘nice-to-have things,’ you lose them. Going through budget cuts is not unusual, but it's hard.”
In August, Mr. Furlong acknowledged the changed circumstances. “We thought this year would be all about executing and delivering services the way they were planned. But it's not as simple as it used to be,” he told The Globe and Mail. “We will probably not spend a day between now and the end of the Olympics when we are not evaluating a decision against the costs of delivery…and the ground is always moving. It's an element we really hadn't thought we'd be dealing with today.”
Construction costs for the venues were tens of millions of dollars higher than anticipated by August, according to The Vancouver Sun, with the cost overage on the Olympic Village alone estimated at CA$100 million. And the Vancouver Convention Centre's 338,000 square-foot (31,401 square-meter) expansion project— including a 6-acre (2.4-hectare) green roof— was originally expected to cost CA$495 million but climbed to CA$900 million.
And the global credit crunch isn't helping matters.
Millennium Development Corp., which was already working on the Olympic Village, lost its funding in 2008 after lenders with the hedge fund Fortress Investment Group cut off money to the CA$1 billion project, citing concerns about cost overruns and the weak economy.
That's when the city had to step in, winning approval to borrow more than CA$450 million to complete the project in January.
Then in March, the Royal Bank of Canada reduced VANOC‘s line of credit by CA$65 million, capping it at CA$30 million.
With funds at a minimum, everyone is looking at the bottom line—and looking to project managers to find solutions in lean times.
In the past, the main pressures for project managers in British Columbia revolved around meeting tight deadlines, says Sachie Morii, PMP, a project manager with BC Hydro, a public electricity utility.
“Now, the focus is more on how to manage costs prudently and justify spending,” she says. “You have to be accountable.”
Feeling the pressure, companies don't want any surprises—especially with the whole world looking on.
“Managing risk is seen as the number-one priority in today's economic climate,” says Richard Brodowski, PMP, director of the Olympic program management office for Bell Canada, the Calgary, British Columbia telecom giant providing all voice, data and broadcast services for the Olympics.
“With project dollars at a premium, businesses require tangible results from all the projects that they initiate,” he says. “There are tighter risk tolerances, and only those projects that have the strongest business cases are currently being launched.”
Only the strongest project managers are being entrusted with projects. Bell Canada launched an internal program to search for high performers who could temporarily relocate to Vancouver to fill more than 400 positions on the company's Olympic team.
>>TIP It's a small world—so build your cross-cultural communication skills. With close ties across the globe and a diverse local population, Vancouver's project management community must be fluent in multicultural communications. “Acceptance of cultural differences is no longer enough to get by in the jobs that we do,” says Iain Palmer, PMP, an independent consultant and president of the PMI Canadian West Coast Chapter. “Understanding, and at times embracing, the differences is now becoming the norm. We are taking more time to understand our clients and ensure that we can, in fact, provide value. We are realizing that there often is a significant difference between clients’ stated wants and their actual needs.”
“The response to the recruitment was substantial, as the chance to be part of the team that will help deliver the games to the world is a once-in-a-lifetime opportunity,” Mr. Brodowski says.
That intense focus on results is forcing project managers at Bell—and other companies—to change the way they work.
“Businesses are pushing project managers to bring better business acumen to the projects they are asked to deliver,” he says. “Although hitting deadlines and managing budgets is key, understanding the project performance drivers is becoming more important. Businesses cannot afford to successfully complete projects that do not deliver on the business objectives that they were originally initiated to achieve.”
With that in mind, Mr. Brodowski sees opportunity in the challenge.
“This is an incredible showcase,” he says. “We will deliver the games to the world, under tight budget constraints, in trying economic times, with an immoveable completion date.”
Even though there are considerable financial hurdles confronting Vancouver's Olympics projects, the event still promises to highlight the city's burgeoning sustainability sector.
By any measure, Vancouver is a hub for eco-friendly innovation. And it's doing more than merely encouraging sustainability—it is pushing to be the world's most environmentally friendly city by 2020.
“There is a growing interest in both the public and private sector in sustainable design. British Columbia is quite progressive in this area,” says Bob Learmouth, Vancouver-based managing senior principal of program and project management at Stantec Inc., an engineering and project management consulting firm.
An added push from local government makes reaching the goal a lot easier.
Vancouver's mayor Gregor Robertson, who issued the 2020 challenge, launched a green action team to determine how the city can meet its ultimate goal of lowering Vancouver's environmental footprint, and then exporting the ideas and technology to other cities and nations.
TRAINING GROUND
Major transportation systems are a staple of big city life— especially if you're a big city that wants to host the Olympics.
As Vancouver put together its bid to hold the games, city planners realized they needed to improve access to the airport and outlying areas to be a major contender.
So the government kicked off two rail projects—but only one is on track.
When it opened on 17 August, the Canada Line became the country's first rapid transit rail line to connect a city center to its airport. The four-year, CA$2 billion expansion of the city's SkyTrain commuter system added 16 stops across 19 kilometers (11.8 miles) between Vancouver, suburban Richmond and the city's international airport.
The project was delivered on budget and three months ahead of schedule—attracting 30,000 passengers in the first three hours of operation, according to The Globe and Mail. The newspaper reported normal capacity would be 6,000 people per hour. And by 2013, it's expected to carry 100,000 passengers a day and remove 200,000 cars from the road.
Funded by a public-private partnership, the electric-powered line is the biggest, priciest infrastructure project ever completed in British Columbia.
The project was not without controversy, however. The Cambie Street corridor is home to shops and merchants who protested the project early on, rallying for a bus rather than a train. The retailers lost the battle, although some of their fears were quelled early on when they believed the route would be tunneled under the street. Instead, the engineering group SNC-Lavalin took a so-called cut-and-cover approach—which saved CA$400 million but meant tearing up the street and interrupting traffic flow. Protests turned to lawsuits and in May one store owner was awarded CA$600,000 in lost revenue.
Unhappy merchants aside, the Canada Line marks a major upgrade to the urban infrastructure with benefits that will last far beyond the Olympics.
“It's a major milestone, not just for the city, but for the country—it's not every day that this country opens up a major piece of rail infrastructure,” Anthony Perl, the director of Simon Fraser University's urban studies program, told Daily Commercial News.
Then there's the other train project.
While the Canada Line rolls happily along, the Evergreen Line project, a proposed 11-kilometer (7-mile) rapid-transit line running through metropolitan Vancouver, is stuck in the station.
Slated to begin in 2010, the project has been plagued with financial issues, with the original CA$800 million budget swelling to an estimated CA$1.4 billion.
The project is jointly funded by the Canadian government, which has committed up to CA$416.7 million, the government of British Columbia, which pitched in CA$410 million and TransLink, British Columbia's regional transportation authority, which was putting in CA$400 million.
Despite the economic woes, the government seemed committed, launching an Evergreen Line project office in February 2009.
By early September, however, regional transportation commissioner Martin Crilly derailed the big plans.
Mr. Crilly ruled against the so-called “Cadillac” option for a massive rail expansion—that included Evergreen— because it calls for almost CA$500 million a year in revenue, CA$175 million of which he said TransLink has so far failed to find a source for.
Vancouver-based Xebec Adsorption (formerly QuestAir Technologies Inc.) received CA$366,000 in funding from British Columbia's Innovative Clean Energy Fund for a CA$1.1 million project at the Lions Gate wastewater treatment plant in West Vancouver. When complete, it will allow biogas from municipal sewage to heat about 100 homes in the area.
Pushing the green envelope means having to contend with a learning curve—something that project managers must help their clients address.
“Much of our time can often be attributed to education of agencies or institutions about systems and processes as opposed to focusing on the work,” Mr. Learmouth says.
“Having sustainability concerns is easy, but actually having to do something about it consists of a lot of hard work and effort,” he explains. “It's no longer good enough to just resolve a solution to a problem. Today we need to have innovative solutions that respond to the more stringent sustainability requirements. The faster solution, which was ordinarily desirable, might not be the best from a sustainability point of view. Today's project managers cannot rely on the old ways of conducting our business.”
“Today we need to have innovative solutions that respond to the more stringent sustainability reauirements.”
—Bob Learmouth, Stantec Inc., Vancouver
Whether it's in sustainability or an Olympics megaproject, Vancouver is clearly out to make its mark as an innovator in project management. PM