Bent Flyvbjerg, the Danish project management guru who is a professor at Oxford University, and Dan Gardner, the New York Times journalist, have written a superb book. We started reading it on a Sunday morning hoping to learn how to manage our projects and teams better. By teatime we felt significantly wiser thanks to both, the quality of the deeply-researched insights in this book and the lucidity of the writing. If you find a better book – which conveys rigorously researched ideas through vivid case studies and simple English – this year, we will buy you a drink or two at our favourite bar in Andheri East.
Ray Bamford’s review of the book conveys many of the key points of the book including: “First ask “why”. Why are we doing this? What is the purpose of this project? Be clear on the project’s objectives and North Star….
Get the team right, starting with the project lead…
Get the plan right first – “Think Slow, Act Fast”…Plan first, then deliver at scale. Make the plan active, iterative, and learning-focused. Experiment and gain practical experience. Little bets before big bets….
Identify similar projects to create a “reference class.” Collect data from these projects on anything you wish to forecast. Cost. Budget. Percent overruns. Use this data to create Reference Class Forecasts (RCF)….Use those similar projects to manage risks…
Break your project down. Use standardized modules as much as possible. “Modularity delivers faster, cheaper, and better, making it valuable for all project types and sizes.”… “What is the basic building block, the thing we will repeatedly make, becoming smarter and better each time we do so? That’s the question every project leader should ask. What is the small thing we can assemble in large numbers into a big thing.”…
Get teams aligned. Everyone needs to be rowing in the same direction, with a common purpose and unified goals….”We perform at our best when we feel united, empowered, and mutually committed to accomplishing something worthwhile.””
The highlight of the book for us are the case studies – each illuminating a difficult facet of how to manage large, complex endeavours. As the authors themselves write for the Big Ideas Club: “The world’s largest database of big projects now exists and its bottom-line numbers are grim. Nearly 48 percent of big projects finish on budget, eight-and-a-half percent finish on budget and on time, and only half of a percent of big projects finish on budget and on time, delivering the expected benefits.
To put that another way, that means 99.5 percent of big projects fail to deliver all their core promises. Even worse, most categories of big projects have what statisticians call “fat tails.” That means disasters are far more likely than conventionally believed. Disasters like Boston’s “Big Dig” transportation project, which went 228 percent over budget, the Montreal Olympic Games, which went 720 percent over budget, or Scotland’s Parliament which, when it opened in 2004, was an almost unimaginable 978 percent over budget. There is no upper limit to how bad results can get—but they can always get worse….
People commonly think the way to get big projects done on time and on budget is to get to work as quickly as possible. Put shovels in the ground right away, push hard, and move fast. That’s how the construction of the world-famous Sydney Opera House started. What people don’t know about the Sydney Opera House is that part way through construction, the project was such a mess they had to dynamite much of what had been built, clear the rubble, and start over. It ultimately took almost three times as long to complete as it was supposed to and the final bill was 1,400 percent over budget, one of the worst overruns in history….
Frank Gehry is a world-famous architect; Pixar is an Oscar-winning movie studio. One makes buildings; the other makes animated movies. Their projects would seem to have nothing in common, but Frank Gehry and Pixar are both successful, in part, for the same reason: They see planning as a chance to dream up new ideas, try them out, and make sure they work.
In a phrase, they simulate and iterate. Frank Gehry starts with sketches and wooden models, but eventually, he and his team create a digital simulation of the future building that is so precise and detailed that it can be called a digital twin. Gehry uses this simulation to relentlessly test his ideas and ensure that everything, from the overall vision to the smallest structural detail, is up to his demanding standards.
Pixar’s directors do something surprisingly similar. They start with a rough outline, then a script. Artists draw simple storyboards illustrating scenes. The boards are photographed and strung together into a video, voices are dubbed in, the video is shown to an audience and the director gets feedback. Then the director goes back, dreams up new ideas, and repeats the whole process, over and over again.”
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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.
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