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Managing Megaprojects

Editor's Note: Take a look at our featured best practice, Construction Company Business Capability Model (1-page PDF document). A business capability model of a construction company providing a basis for Enterprise Architecture, Business Architecture, Strategic Planning. Comprehensive balance of business capabilities and technical support capabilities.

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Megaprojects have a significant impact on a country’s economic activity, productivity, social harmony, and environment.  Most Megaprojects (estimates put it at 90%) end up being over time and over budget.  Such overruns naturally have an impact not only on the finances of a country but other aspects as well.

Reason for such overruns consist of technical challenges, alterations in design and operational requisites, escalation in costs, disagreements over responsibility, and new regulations.  The more complex a project, the difficult it is to foresee the difficulties, changing conditions, and unanticipated opportunities that will be encountered.

Typically, Megaprojects are defined as undertakings costing $1 billion or more, having a time span of several years for developing and building; having a number of stakeholders, public, private, or both; and affecting millions of people.

Research for synthesizing rules for managing projects, particularly megaprojects, was conducted on 6 megaprojects in London.  The research was conducted jointly by several academic institutions, including the University College London, University of Queensland Business School, and Imperial College London.

The study benefitted from earlier, adjoining, and continuing studies carried out by 1 or more of the authors of the study under consideration.  The total time span of the research was over 10 years.

The Megaprojects that were looked at in detail included High-Speed 1, Heathrow Terminal 5, Infrastructure for the London Olympics of 2012, Crossrail, Heathrow Terminal 2, and Thames Tideway Tunnel project.

The following 5 rules were found to be helpful in the management strategy of Megaprojects:

  1. Evaluate previous success factors.
  2. Allow for surprise occurrences.
  3. Test and try first.
  4. Adjust and distribute risks aptly.
  5. Employ Innovation from beginning to the end.

The rules derived are applicable not only to managing projects of mega proportions but also projects of smaller size as well.  Notwithstanding the complexity of big projects having great stakes, these straightforward rules can aid in enhancing their performance.  These rules offer the flexibility to alter and at the same time uphold the stability needed to execute projects effectively.

Let us delve a little deeper into some of the rules.

Evaluate previous success factors

This exercise comprises of studying other project sectors and research organizations, and gaining from them for application in own project.  It also encompasses recording, evaluating, and acquiring own previous experiences and applying them in current project.

Practice includes looking at case studies and paying visits to sites of other projects.  It also employs Subject Matter Experts to aid in assessments.

Prepare for surprise occurrences

Maintaining flexibility and adaptability in teams and contracts to tackle unforeseen circumstances is what this rule is about.  Modifying behaviors to successfully face surprise occurrences and sharing risks in order to cater to the surprise element in projects is also part of this approach.

Test and try first

This rule demands simulation and modelling in order to evaluate solutions at low cost and in minimum time.  It also requires rehearsing before-hand so as to develop solutions that have minimum glitches in them.  Off-site trials are conducted so as to reveal lots of valuable lessons that facilitate Risk Mitigation and Planning in advance.  On-site tests and trials ensure smooth handing over to the operations team.Interested in learning more about Managing Megaprojects?  You can download an editable PowerPoint on Managing Megaprojects here on the Flevy documents marketplace.

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About Mark Bridges

Mark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.

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