Rise above the 66% failure rate.
We hear about megaprojects every day—whether they’re airports, power plants, or highways.
According to the Oxford Handbook of Megaproject Management, “[M]egaprojects are large-scale, complex ventures that typically cost $1 billion or more, take several years to develop and build, involve multiple public and private stakeholders, are transformational, and impact millions of people.”
These mighty projects are the essential backbone to our infrastructure, but unfortunately, have very high failure rates.
Many project owners are attempting to apply traditional tools and processes to megaprojects with little success. New contractual relationships and models must be developed—and new team structures put into place—to address the size, complexity, and risks associated with megaprojects.
Megaproject experts share their knowledge
We spoke with several industry experts about how megaprojects are unique in addition to how to avoid common risky pitfalls on the path to success. Bob Prieto, veteran executive of Fluor and Parsons Brinckerhoff, and author of “The Giga Factor: PM in the Engineering & Construction Industry”, and Hans Hoppe, Principle Program Controls Manager with Parsons, share the following:
Megaprojects have completely unique project requirements
Prieto says, “It’s not about perfecting an imperfect model, it’s about creating a new one.”
For example, by 2030, the new 743,000 square meter Mexico City Airport will serve 68 million passengers. 82 organizations are working on this massive, extremely complex megaproject which includes numerous systems, security, safety, and regulatory requirements.
Owner and project readiness are essentialHans Hoppe shares, “How these projects begin makes a huge difference to how they end.”
Projects can quickly start off on the wrong foot—and sometimes never recover—if the substantial scope isn’t defined and the right team members aren’t in place from the beginning.
Lack of project readiness
Many projects start prematurely before the scope is properly defined, the designs well developed, and the essential team members on board. According to Prieto, currently two-thirds of all megaprojects fail due to schedule or budget overruns. Starting a project earlier can appear to save time, but premature launches can result in miscommunication, errors, and a divided, uncooperative project team.
Leadership sets the tone for the teams they build. Projects will struggle if project leaders don’t instill a collaborative structure and mindset—a key ingredient to megaproject success. Hoppe says, “The leadership team must strive to deliver one successful integrated project.”
Clear contract terms and language
Clear contract structures and terminology are crucial to a project’s success for all parties involved. “There are enough challenges on megaprojects without introducing adversarial relationships,” Hoppe warns.
The six steps to megaproject success
Sean McQue, Harvard Business School Alumnus and Project Director with ALEC, outlines megaproject success in 6 steps:
1. LeadershipTraditional engineering and construction (E&C) projects typically have one individual directing the entire project team. Megaprojects are completed by joint ventures, consortiums, and other alternative delivery models given their sheer size and complexity.
McQue says, “Leaders must motivate people to follow them; you can manipulate or inspire. To succeed, you must inspire” Successful megaproject leaders rely on the following tenants: open, collaborative, innovative, flexible, forward looking.
2. Project environment
The leadership team selects which organizations participate on a megaproject, the contract style and language, implementation, and the systems used to manage data, communication, and processes. A successful project team must be: cooperative, non-confrontational, interactive, experienced, efficient, and motivated.
3. Project plan
According to McQue, the project plan must be “attainable, measurable, and adaptable”, because the plan greatly impacts the team environment and project delivery. A collaborative leadership team sets the baseline and agrees on goals, success metrics, and how project responsibilities are divided. A successful megaproject plan must be agreed by all appropriate parties.
Nothing is possible without a talented team to develop and support the project environment and plan. The right people have collaborative mindsets, the discipline to measure progress against milestones, and the motivation and skills to reach project goals. “If you have the right people, the rest will fall into place,” McQue says. Skilled team members instill: accountability, collaboration, integrity, skill, and decisiveness.
5. Information management
Implementing information management guidelines are crucial given the sheer size, pace, and numerous components to megaprojects. Mismanaged information can gravely impact cost and schedules resulting in time intensive errors, rework, and disputes.
“If vast amounts of project information aren’t managed correctly, people can drown in information and be starved for knowledge,” McQue shares. Information on megaprojects must be: accurate, accessible by the right people at the right time, complete, and consistent—even more so than on traditional projects.
The end goal is—of course—ensuring a successful project delivery. McQue states, “A key to project success is for all team members to have ‘a project first’ mindset. A project cannot succeed unless all parties are successful. If all parties are successful, the project will succeed.”
For more information, we invite you to view Aconex on-demand webinars—Mega Projects, not Mega Problems—to hear first-hand from Bob Prieto, Hans Hoppe, and Sean McQue.
Session 1 with Fluor and Parsons Brinckerhoff veteran, Bob Prieto and Parsons, Hans Hoppe
Session 2 with Harvard Business School Alumnus and ALEC Director or Operations, Sean McQue
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