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Breakin’ the Project Wave: Understanding and avoiding failure in project management

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Temporary organizational forms in general and here namely projects often do not reach their objectives. Catastrophic outcomes are a particular problem. Recent studies imply that projects which massively fail are 'Black Swans by design'. This paper provides a more refined explanation as it studies the emergence of failure through a temporal lens. The metaphorical concept of a project wave is introduced to describe the process. It reflects compounding times of not knowing: 'not wanting to know',' not supposed to know' and 'must not know'. The concept is illustrated and supported by evidence from a particular case reviewed: The construction project of the new airport BER in Germany's capital Berlin. It is shown that the project wave also serves as a framework within which proposed remedies to typical project management problems can be positioned.
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PM World Journal Breakin’ the Project Wave: Understanding and
Vol. V, Issue I January 2016 avoiding failure in project management
www.pmworldjournal.net Featured Paper Dirk Nicolas Wagner
© 2016 Dirk Nicolas Wagner www.pmworldlibrary.net Page 1 of 21
Breakin’ the Project Wave:
Understanding and avoiding failure in project management
Dirk Nicolas Wagner
Karlshochschule International University
Abstract
Temporary organizational forms in general and here namely projects often do not
reach their objectives. Catastrophic outcomes are a particular problem. Recent
studies imply that projects which massively fail are Black Swans by design. This
paper provides a more refined explanation as it studies the emergence of failure
through a temporal lens. The metaphorical concept of a project wave is introduced to
describe the process. It reflects compounding times of not knowing: not wanting to
know, not supposed to know and must not know. The concept is illustrated and
supported by evidence from a particular case reviewed: The construction project of
the new airport BER in Germany’s capital Berlin. It is shown that the project wave
also serves as a framework within which proposed remedies to typical project
management problems can be positioned.
Key words: project-based organizing, project management, temporality, delays,
cost overruns, delusion, optimism, deception, principal agent problems, Black Swan,
metaphors
Introduction
For business in particular but also for society in general, temporary organizational
forms become more and more relevant. This sign of the times is increasingly
reflected in academic writing dealing with questions related to temporary
organizational forms (Bakker, 2010, 466). One omnipresent issue with temporary
organizational forms is that they appear to often fail in meeting their communicated
objectives. This becomes highly evident and measureable when it comes to
successful completion of projects. Irrespective of the industry or the even sector
concerned, projects are regularly intended to be on time, on budget and on scope. It
is widely accepted that all too often, they are not (Flyvbjerg et al., 2002; Altshuler/
Luberoff, 2003; Priemus et al., 2008). Projects fail in the sense that they do not meet
their schedule, cost and scope respectively quality objectives.
Against this background, critical research on management emphasizes a ‘non-
performative intent’ and argues that other indicators of project success are important
to consider (Cicmil/Hodgson, 2006). But for evident reasons, the objectives of the
iron triangle (Oisen, 1971; Atkinson, 1999) continue to be a key priority for project
stakeholders (BMVI, 2015). This is a motivation here to keep the focus on the narrow
sense of project management success rather than on the more general notion of
project success (Ika, 2009, 8). The aim is to understand how projects can be on
time, on budget on scope, but to nevertheless follow the proposition by critical
PM World Journal Breakin’ the Project Wave: Understanding and
Vol. V, Issue I January 2016 avoiding failure in project management
www.pmworldjournal.net Featured Paper Dirk Nicolas Wagner
© 2016 Dirk Nicolas Wagner www.pmworldlibrary.net Page 2 of 21
project management research to “introduce alternative theoretical approaches to the
study of projects” (Cicmil/Hodgson, 2006, 111).
The alternative theoretical approach put forward here is the concept of a project
wave. The concept is metaphorical. This is guided by the insight that metaphors are
not only language but govern human thought and action (Lakoff/Johnson, 2003, 3).
Conventional metaphors like ‘time is money’ or ‘love is magic‘ are good examples for
that. The project wave is a metaphor providing a new understanding
(Lakoff/Johnson, 2003, 139ff) of our experience of project management failure in
terms of too late, too expensive and too different from the intended outcome. The
project wave describes the cumulative effects of interactions between people who do
‘not want to know’, are ‘not supposed to know’ and ‘must not know’.
Three objectives are pursued. First, the metaphor and its implications are unfolded
by relating it to the relevant literature on project management failure. To achieve this,
initial focus is given to the Black Swan (Taleb, 2010) nature of major project failure.
Second, the viability of the metaphor is tested by applying it in an illustrative way to
the case of Berlin Brandenburg Airport (BER), one of the most prominent
contemporary project management failures (Diekmann et al., 2013). Third, by
returning to the literature on project management, the metaphor is used as a
framework to position proposed managerial remedies to typical problems which
occur in the built-up of the wave. With such a methodological approach, it is intended
to bridge functional and instrumental views of project managers and project sponsors
with an alternative but complementary perspective that captures and critically
reviews as well as summarizes the social and political dynamics on projects. In this
sense it can in part also be interpreted as “descriptive theory, grounded in empirical
narrative study on human interaction on projects” (Cicmil/Hodgson, 2006, 117; see
also Packendorff, 1995, 326).
The overall idea is that if project practitioners on all levels recognize the metaphor of
the project wave, it can help their thoughts, their actions and probably most
importantly their interactions in ways that break the wave of project failure. That
such a metaphor can be a missing link which connects previous lessons learned with
new projects is exemplified by the case discussed here: Berlin Brandenburg Airport
will be finalized at least €3.5 billion over budget. In the mid-nineties, Denver
International Airport finalized $3.5 billion over budget followed by a detailed review
concluding on widely communicated lessons learned which was supposed to serve
but obviously failed as “a resource for all airport managers and professors
confronting the increasing aviation demands of the next millennium (Prather, 1998,
15).
Major Project Failures - Black Swans
Taleb (2012, 284) argues that frequent project failure is a more recent phenomenon,
pointing to complex projects like the Empire State Building in 1931 or the London
Crystal Palace in 1851 which were successfully completed within schedule. Studies
undertaken by Bent Flyvbjerg (2009, 346) confirm that for contemporary
infrastructure projects significant delays and cost overruns are common. When
PM World Journal Breakin’ the Project Wave: Understanding and
Vol. V, Issue I January 2016 avoiding failure in project management
www.pmworldjournal.net Featured Paper Dirk Nicolas Wagner
© 2016 Dirk Nicolas Wagner www.pmworldlibrary.net Page 3 of 21
shifting the focus from conventional construction projects to state of the art IT-
projects the picture becomes even worse as the average IT budget overshoot
appears to be much higher than in construction (Flyvbjerg, 2009, 363). On this basis,
one could argue that temporary project organizations are not only temporarily but
increasingly failing.
Looking at the distribution of failure across many projects can be revealing. A study
of out-of-control tech projects showed that many projects performed reasonably well.
However, a surprisingly high proportion of one out of six projects encountered
massive cost overruns of 200% and schedule overruns of almost 70%
(Flyvbjerg/Budzier, 2011).
1
The authors suggest that bad performance of IT-projects
on average is driven by a “fat tail” of damaging outliers with gigantic overages. These
are described as the industries’ Black Swans” which refers to the term coined by
Taleb (2010) for large-scale unpredictable and irregular events of massive
consequence which are retrospectively explainable. Recent examples in other
sectors like the construction of Hamburg’s Elbphilharmonie in Germany or the Queen
Elizabeth Class Aircraft Carrier defense project in the United Kingdom suggest that
comparable “fat tail” patterns may also be detectable outside IT. Berlin Brandenburg
Airport also falls into this category.
The welcome finding here is that most projects are better than average figures seem
to imply. But, if things go wrong, they go terribly wrong.
Flyvbjerg (2009, 349) distinguishes three explanations for failure of large projects:
technical, psychological, and political-economic. He arrives at the conclusion that
political-economic explanations serve best in explaining project failure. “According to
such explanations planners and promoters [of projects] purposely spin scenarios of
success and gloss over the potential for failure (Flyvbjerg, 2009, 350). This view is
further supported by Flyvbjerg and COWI (2004); Wachs (1986, 1989, 1990) who
more bluntly explained that ‘planners lie with numbers’. As a consequence, many
projects are designed as disasters waiting to happen” (Flyvbjerg, 2009, 353) or to
put it slightly differently: ‘Black Swans by design’.
Failure through the temporal lens: at the beginning there is a grey baby swan
The contributions briefly reviewed above have considerably enhanced our
understanding of project failure. However, the idea of ‘Black Swans by design’ has
something irritating about it. It somehow nurtures Taleb’s view that “we don’t realize
the role of these swans in life because of this illusion of predictability” (2012, 6). On a
less philosophical level, questions like the following arise: Why are project failures
more severe these days than in the past? How does the “fat tail” distribution of
project failure come about?
These questions, but even more so the widespread worries of many people who are
involved with temporary project organizations in practice, request an even closer
1
See also Jones (1995, 2000) for high cancellation rates of large IT projects and El Emam/Koru (2008) for a
contradicting view.
PM World Journal Breakin’ the Project Wave: Understanding and
Vol. V, Issue I January 2016 avoiding failure in project management
www.pmworldjournal.net Featured Paper Dirk Nicolas Wagner
© 2016 Dirk Nicolas Wagner www.pmworldlibrary.net Page 4 of 21
look at the process of project failure. The guiding idea here is to study failure through
a temporal lens by reviewing on a step by step basis what happens from start to end
of a project. Whilst it can be accepted that an element of design is inherent to Black
Swans, it is proposed that a hatching baby swan is always grey and that it turns
either white or black later in life.
The concept of the wave
Scientific analogies and metaphors have repeatedly helped to understand and clarify
complex phenomena.
I propose to conceive projects as coming along on a wave. Perfect projects would
not show any waves. But the usual project embedded in the temporal flow can be
expected to show some movement. The shore line can be interpreted as the
boundary of a project. This is where projects come to an end, thus reflecting the
finite nature of projects. Failing projects generate a big wave. Major project failures
are not weeks or months but years too late, and cost overspent is measured in
multiples of the originally planned sum. When the wave hits the shore the project
overruns and overspends. Berlin Airport is a typical case for this pattern. Based on
officially communicated information made available until December 2015, figures 1
and 2 show how, over time, the communication of again and again higher costs and
later completion dates took place to form a massive project wave.
Figure 1: BER communicated cost forecast
Figure 2: BER communicated opening dates
Generally, on the open sea the size of a wave depends on the wind. More
specifically, it depends on the strength, the duration and fetch of the wind, whereas
the latter term refers to the uninterrupted distance of open water over which the wind
blows. Therefore, in nature a number of either mutually reinforcing or offsetting
effects determine the size of the wave. As will be explained below, the size of a
project wave depends on the treatment of knowledge. The more knowledge and
2.0 2.4 2.8 3.0 3.0
4.5
5.4 5.6
6.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Nov-11 Jun-12
Oct-13
Nov-14
Dec-17
Feb-08
Jul-09
Nov-10
Apr-12
Aug-13
Dec-14
May-16
Sep-17
Feb-19
PM World Journal Breakin’ the Project Wave: Understanding and
Vol. V, Issue I January 2016 avoiding failure in project management
www.pmworldjournal.net Featured Paper Dirk Nicolas Wagner
© 2016 Dirk Nicolas Wagner www.pmworldlibrary.net Page 5 of 21
available sources of knowledge are neglected the larger the project wave is likely to
be. This pattern is summarized in figure 3.
Similar to the wave in the ocean the project wave can be a destroying force. It costs
scarce resources, time, money and it challenges the human beings involved in it.
Whilst the magnitude and force of waves are all too evident when they hit the shore,
it is less easy to assess them in the middle of the open sea. Project waves are even
more difficult to detect before it is too late. Therefore, it can be helpful to make an
attempt to describe and understand their dynamics.
Figure 3: Cumulative times of not knowing - the project wave
Not wanting to know
The project wave can be interpreted as a wave of not wanting to know, not supposed
to know and must not know. At the outset, initiators of projects do everything to
promote the undertaking. They do not only create a wind of change but they also
make every effort to avoid headwind. These agents do not want to hear about the
real costs or realistic schedules. Such information could endanger implementation
right away. Instead, they encourage others to join them in looking at the project
through “rose-coloured glasses” (Lovallo/Kahneman, 2003, 57).
BER is a good example for such a “rose-coloured glass” view. Here, a budget of
2,0 billion ($ 2,2 billion) was agreed whilst it was evident that elsewhere major airport
development projects regularly come in at a significant multiple of this sum (see table
1). Later, journalists unveiled internal documents which already two years prior to
start of construction warned against excessive cost overruns (Heiser, 2014). The
danger of spreading such over-optimism lies in the high expectations of the unknown
not wanting
to know
not supposed
to know
must not
know
Cost
time
no one wants
to know
PM World Journal Breakin’ the Project Wave: Understanding and
Vol. V, Issue I January 2016 avoiding failure in project management
www.pmworldjournal.net Featured Paper Dirk Nicolas Wagner
© 2016 Dirk Nicolas Wagner www.pmworldlibrary.net Page 6 of 21
(Lovallo/Sibony, 2006, 21) while an anchoring to unrealistic original ideas takes
place.
Country
City/Airport
Project
Projected cost $ bn.
Qatar
Hamad
International
New Airport
15,5
USA
Los Angeles
LAX
Various incl. new
terminal
12,0
USA
Atlanta
Long term
development project
9,0
Saudi
Arabia
Jeddah
Terminal expansion
7,0
Oman
Muscat
New Terminal
5,2
China
Chongqing
New runway and
terminal
4,7
Table 1. Some of the world’s biggest airport projects, 2013-14 (CAPA, 2014)
The initiating agents often do not have much to lose. After all, the resources they
intend to mobilize for ‘their’ project are not their own and they are not held
responsible for overstated benefits either. Therefore, projects regularly feature
principal-agent problems (Turner/Müller, 2004; Müller/Turner, 2005;
Jensen/Meckling, 1976). In Berlin it all began in the early nineties with euphoric
expectations for growth in passenger numbers after the German unification and with
the prospect of getting Lufthansa to return to its hometown which resulted in the
former CEO of Lufthansa becoming advisor to and a member of the supervisory
board of the holding company of the new airport (Malich/Welskop, 2001). The
creative handling of information asymmetries is well documented in airport internal
information which became public (see for example Heiser, 2014 and Siegle, 2014).
Immediate consequences of ‘not wanting to know’ are unclear objectives and scope
definitions. Any textbook or seminar on project management emphasizes the
importance of a well-defined consistent set of project goals and requirements.
Nevertheless, this initial step is often neglected. Simple but firm and agreed upon
project charters as for example described in Hayes (1999) are difficult to find.
Whether on purpose or not, imprecise and vague project starts are perceived as
problematic (Savolainen, 2010). This can be confirmed for the BER project, which
despite insufficient planning moved into the implementation phase. The confrontation
between different interests involved is well illustrated by a comprehensive letter from
a disappointed senior manager to the CEO at the time, Hartmut Mehdorn (Siegle,
2014).
PM World Journal Breakin’ the Project Wave: Understanding and
Vol. V, Issue I January 2016 avoiding failure in project management
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© 2016 Dirk Nicolas Wagner www.pmworldlibrary.net Page 7 of 21
Not supposed to know
From here, the wave of not knowing starts to build up. Next, those actors who are
not supposed to know’ are called into play. Planning and implementation of large-
scale projects requires experienced managers and specialists. Tender processes
help to get the necessary contractors and subcontractors involved. All these actors
have at least two things in common. On the one hand, they have the necessary
know-how. On the other hand, they are being confronted with unrealistic budget- and
schedule requirements. From experience they know, it won’t work that way. But they
are not supposed to know. In this respect, their know-how is not in demand.
However, they want (to keep) the job, they need the contract. Sometimes naively,
sometimes compulsively, wrong promises are made, schedules are confirmed and
detailed out. The initial anchoring mentioned above, becomes more and more
formal. This phase of a project regularly gives rise to what has been called the
planning fallacy, where past experience is not sufficiently taken into account and task
completion times are underestimated (Buehler et al., 1994). Decision makers in
charge react with delusional optimism instead of looking for mistakes and
miscalculations (Flyvbjerg et al., 2009, 5). Forecasts and project plans are developed
further based on the results of tender processes for all relevant parts of the project
scope. And here, regularly prices are quoted which remain below the expected costs
(BMVI, 2015, 42). All of this is based on a mix of wishful thinking and previous
experiences which suggest that later in the project there will be opportunities to
justify delays as well as so called variation orders resulting in additional costs for the
client. If there are perceived chances of future compensation, it is likely that the
bidder who most underestimates the true cost of the project will secure the work,
which Flyvbjerg (2009, 23) describes as the “winner’s blessing”. Again BER serves
as a prime example for such developments: In 2014 a government enquiry brought
to light that the volume of change orders had reached a value of € 1.4 billion. Whilst
by the airport management this was framed as “normal project business” (F.A.Z,
2014), the sum equaled a remarkable 70% of the original budget. The acceptance of
such practices as “normal” is in so far alienating as also conclusions drawn on
previous airport projects clearly describe the significant financial risks involved
(Dempsey et al., 1997, 430).
Must not know
Meanwhile, those who ‘do not want to know’ are all too ready to listen to the empty
rhetoric and to the false promises of those who are ‘not supposed to know’. Herby,
all goes according to plan. Now, there is sufficient ‘substance’ to meet those who
‘must not know’. These are the project-owners, the project-sponsors, in other words,
those who decide over the funding and the future of the project.
The wave starts to show ripples and its first whitecap. Sufficient quantities of paper
and power-point presentations have been presented to supervisory boards, steering-
committees, risk-managers and project approval have been given. The wave can no
longer be stopped.
PM World Journal Breakin’ the Project Wave: Understanding and
Vol. V, Issue I January 2016 avoiding failure in project management
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© 2016 Dirk Nicolas Wagner www.pmworldlibrary.net Page 8 of 21
To avoid being drowned, those who ‘do not want to know‘ just like those who are not
supposed to know‘ rely on drifts which almost always occur. One phenomenon which
can be expected on sizeable projects is that during the course of the project new
requirements, wishes and desires come up and will demand implementation.
Frederick Brooks did point this out when he wrote that “for the human makers of
things, the incompleteness and inconsistencies of our ideas become clear only
during implementation” (1975/1995, 15). It does not need to be emphasized that
such late changes will turn out to be disproportionally expensive and will cost more
time than one would expect. BER serves as an outstanding example for the
incompleteness and inconsistencies of ideas of decision makers. This is illustrated
by a need for 20 additional check-in counters (21% more) which was made public
less than two months before the planned opening of the airport in 2012. The airport
was planned to have less check-in counters than the old airport at Tegel (Purschke,
2012).
No one wants to know
But this is not the only drift. Whilst on the surface the sea is still calm, there is a lot
going on below the waterline. Those who ‘must not know’ are of course not aware.
And they insist on compliance with budget and schedule. But in the meantime,
middle managers have the facts on their desks. Reports, minutes of meetings and
memos speak for themselves. Costs exceed budgets and milestones are not
reached. But the information is not rising to the top. Instead, those directly in charge
of parts of the project are optimistic that catch-up is achievable. Where negative
news surface, they do so in a lifebelt: It is widely acknowledged that if negative
news can no longer be avoided, those who ‘must not know’ need to receive a
solution to any arising problem straight away. Optimistic mitigation plans are
presented, and they are more than welcome. The project reaches a phase, where
‘no one wants to know’.
Once inevitable delays and cost overruns have become public the wave receives
further tailwinds. Regularly, the opportunity cost of finishing late and later is
considered to be higher than any direct cost of accelerating project completion. Also,
if a project is running late everything possible needs to be done to mitigate the
issues. These actions have to be visible to be credible. This is often accomplished by
adding manpower as well as further ‘experts’ to the project. This is more costly than
perceived because in many cases the consequence will be that the added, often
hourly paid, manpower stays longer. Many industries can today confirm Brooks’s
Law, once formulated for Software Engineering: “Adding manpower to a late […]
project will make it later” (Brooks, 1975/1995, 25).
Typical examples for ‘no one wants to know’ issues at BER were the overloading of
cable trays which turned out to have massive knock-on consequences (dpa/ap,
2014) and the permanent introduction of a six day work week in November 2015 to
maintain the communicated schedule at the expense of resulting overtime charges
(rbb, 2015). For a period of more than two years Berlin airport also maintained a
peculiar, expensive and far reaching case of optimistic and at least in part fraudulent
mitigation management when it approved down-payments to one of the most
PM World Journal Breakin’ the Project Wave: Understanding and
Vol. V, Issue I January 2016 avoiding failure in project management
www.pmworldjournal.net Featured Paper Dirk Nicolas Wagner
© 2016 Dirk Nicolas Wagner www.pmworldlibrary.net Page 9 of 21
important contractors on the project against empty promises to deliver. The
contractor was later unmasked as an expert in adding manpower to already late
projects (Fuchs, et al., 2015).
Breakin’ the wave…. to drown a Black Swan
Ultimately, the project wave as described above washes a Black Swan ashore. The
case of Berlin Brandenburg Airport has served as an extreme example here. Yet, it
has to be emphasized that the illustrative description of a failing project does not
describe what normally happens when temporary organizations are formed to
undertake a sizeable project. Rather, it refers specifically to the “fat tail” mentioned at
the beginning. As such, it stands for a worst case scenario and tries to capture how a
variety of contributing factors for project failure can come to work together to explain
why the outcome is catastrophic rather than only poor or below average.
What makes the metaphor useful from both a theoretical and from a practical point of
view, are two considerations: First, if it is accepted that metaphors are not only
language but govern human thought and action (Lakoff/Johnson, 2003, 3), then
referral to the metaphor throughout a project can trigger behaviours on all levels and
during all phases which let the project wave break early. The leitmotif of the project
wave is one of ‘wanting to know’. If people involved in projects know that the
phenomenon of the project wave exists, then ‘wanting to know’ is the appropriate
answer to a sequence of ‘not wanting to know’, ‘not supposed to know’ and ‘must not
know’ behaviours. This can lead to a performative turn (Bachmann-Medick, 2006,
104ff) when managing a project. One of the effects of ‘wanting to know’ can for
example be that relevant changes to a project occur earlier, which lowers the cost of
these changes and increases the chances to mitigate and minimize resulting delays
(see figure 4).
Figure 4. The MacLeamy Curve
2
2
AEC Magazine (2013), adapted from The Construction Roundtable (2004, 4).
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Second, the project wave is a theoretical framework which can systematically
accommodate proposals as well as proven solutions to make project selection and
project management more successful. A corresponding summary is presented in
table 2. As shown there, sufficient time for project planning and preparation is
considered to be a necessary condition for successful management throughout the
lifecycle of a project. The knowledge developed during this phase can be seen as an
investment into the future of the project. It also allows for a substantial clarification of
requirements and it enables the decision makers to set clear objectives, another
factor to avoid a high project wave. These are more likely to be appropriate
objectives if the designated project is compared with other, already completed
projects by the means of reference-class forecasting (Flyvbjerg et al.,2009). On such
a basis, one or the other project may not be pursued any further. Yet, it has to be
kept in mind that project management success can only be achieved if projects are
undertaken in the first place. Thus ‘wanting to know’ is a move forward which is open
for critical views. The challenge is to confront the facts (Collins, 2001, 65ff) at any
given time and to differentiate between substance and noise.
Once a project is underway, it appears that the project wave can be tamed if focus is
given to risks, new wishes and new requirements. The adoption of risk management
(Purdy, 2010) and change-control processes (Kappelman et al., 2006) is one thing.
To accept lack of knowledge another, in project management an often neglected
approach. But to successfully confront the facts also means not to speculate about
things which cannot be assessed at a given point in time.
Gaining the relevant knowledge and constructively acting on the basis of this
knowledge can be facilitated by collaborative approaches to project management
(Maylor, 2001) and by alliance forms of contract (Pitsis et al., 2001).
In summary, it has to be emphasized that the table is to be understood as an
indicative rather than a comprehensive representation of possible remedies. The
suggested conclusion is that a comprehensive and integrated project management
approach which accommodates actions shown in the table is likely to result in a
smaller project wave. It would not be wise to expect perfect projects. But much would
be achieved if the project wave breaks early so that it drowns the Black Swan before
it reaches the shore.
Conclusion
The project wave metaphor of ‘not wanting to know’, ‘not supposed to know’ and
‘must not know’ was introduced to capture our experience of project management
failure. With the help of the case of the Berlin Brandenburg Airport new built project,
it was shown that how comparatively rare severe project management failure
develops through cumulative times of not knowing. Existing literature on project
management failure could neatly be integrated with the concept of the project wave.
As such, failure was reviewed and possible remedies were survey through a
temporal lense. The metaphor may help practitioners with their thoughts, actions and
interactions to break the wave of project failure.
PM World Journal Breakin’ the Project Wave: Understanding and
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There are a number of limitations to this contribution. To achieve further
substantiation, the metaphor of the project wave would have to be applied and
reviewed in the light of further cases. It has to be considered that the problems and
possible remedies summarized in table 2 only refer to issues related to the project
wave. They do not represent a general review of success criteria and success
factors in project management as presented elsewhere (e.g. Morris, 2013, 289ff;
Kappelman et. al, 2006). Also, it was not possible to critically review all of the
indicated potential remedies here (again see Morris, 2013 for this).
Finally, with Berlin Brandenburg Airport the case of a large scale construction project
was studied. The literature review however also referred to other project industries
and in particular to Information technology. In the future, it would be necessary to
derive how exactly different project-driven industries and how public and private
sectors can learn from each other.
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Table 2. : Phases of the project wave with related problems and possible remedies
No.
Phase
Initiating actor
Reacting actor
Problems
Possible remedy
Further details
1
Not want
to know
Project
beneficiaries
Project sponsors
/ owners
Overstatement of benefits.
Anchoring.
Political considerations
dominate.
Independent second opinions.
Proposals to include “next best” alternative.
Foster culture of open debate.
Unmask politically motivated estimates.
Criminal sanctions.
See also planning fallacy (no.3).
Lovallo/Sibony (2006)
Flyvbjerg et al. (2009)
Flyvbjerg (2009)
BMVI (2015)
2
Project
beneficiaries
Project sponsors
/ owners
Unclear objectives and
goals.
Masking of potential
issues.
Transparency.
Clear project strategy.
Solid project definition.
Specify requirements & business case.
Systematic use of project charters.
Enter into alliance instead of conventional top-
down approach.
Flyvbjerg (2009)
Buttrick (2009)
Myers et al. (1986)
Kappelman et al. (2006)
Hayes (1999), Ryan
(2011)
Pitsis et al. (2003)
Chen et al. (2012)
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No.
Phase
Initiating actor
Reacting actor
Problems
Possible remedy
Further details
3
Not
supposed
to know
Project planners
and forecasters
Project sponsors
/owners /Project
beneficiaries
Planning Fallacy.
Delusional optimism.
Understatement of cost.
Overstatement of benefits.
Anchoring.
Adopt an “outside view” of the project.
Reference class forecasting.
Application of “Optimism Bias Uplift”.
Don’t start without/with insufficient plan.
Use modular plan with sufficient detail.
Consider BIM or comparable technology.
Adopt “future perfect” strategy.
Buehler et al. (1994)
Flyvbjerg et al. (2009)
Flyvbjerg (2009)
Lovallo/Kahneman(2003)
BMVI (2015)
Azhar, S. (2011)
Pitsis et al. (2003)
4
Contractors and
Sub-contractors
Project owners /
managers
Quoted prices below
expected costs.
Detailed engineering
without questioning the
assumptions of basic eng.
(Input also for forecasting, no.3)
Avoid “winner’s blessing” based on quality of
tender process and contractual agreement.
e.g. fixed price contracts, contractually agreed
liquidated damages for delay.
Lowest Price ≠ best price. Best price
systematically considers qualitative criteria.
Alliance forms of contract.
Common industry
practice
BMVI (2015)
5
Freelance/agency
personnel across
project hierarchy
Project
managers
Moral hazard / shirking due
Sunflower management
Contractually agree same key personnel and or
fixed %-age of directly employed personnel on
sequential projects.
Constructing the team. Establish a project
culture.
Common industry
practice e.g. in
mechanical engineering
Latham (1994)
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No.
Phase
Initiating actor
Reacting actor
Problems
Possible remedy
Further details
6
Must not
know
Project
beneficiaries
Project managers
Project owners
Strategic
misrepresentation/ Moral
hazard/ Deception:
understatement of cost and
overstatement of benefits.
Proposing and approving actor/institution to
share financial responsibility.
Privatize and/or insure (part of) the risk in case
of public projects.
Systematic risk management instead of risk
ignorance.
Pursue “best for project“ & “no blame” culture.
Flyvbjerg et al. (2009)
Purdy (2010)
Lalonde/Boiral (2012)
Pitsis et al. (2003)
7
Project
beneficiaries
Project managers
Contractors
Project owners
Project owners
Project
managers
Discovery of new
requirements and scope
changes
Consider agile project management techniques.
Implement effective change control process.
Appropriate use of risk registers.
Schwaber (2015)
Sutherland (2014)
Kappelman et al. (2006)
Martin (2003)
Budzier (2011)
8
Project managers
Contractors
abcde
Subcontractors
Project owners
Project
managers
Contractors
Asymmetric Information,
deception: hiding of
problems
See no. 6
Collaborative project management (e.g. project
charter). Allocate responsibility for the time plan
to the team members.
Transparent and matching project organizations
of project partners.
Maylor (2001)
BMVI (2015)
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No.
Phase
Initiating actor
Reacting actor
Problems
Possible remedy
Further details
9
No one
wants to
know
Project managers
Contractors
abcde
Subcontractors
Project owners
Project
managers
Contractors
Optimism bias, Anchoring
on original plan: insufficient
adjustments, unrealistic
mitigation plans
See no. 1,2, 3, 6 , 7
10
Project owners
Project managers
Project
managers
contractors
subcontractors
Mythical Man-Month:
Adding resource in the
belief that this would
improve the situation
Consider Brooks’s Law: Adding manpower to a
project will make it later.
Brooks (1975/1995)
11
Project managers
Project owners
No feedback loop / lessons
learned for future projects
Work with Deming Cylce (Plan-Do-Check-Act)
across projects.
Maylor (2001)
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About the Author
Dirk Nicolas Wagner
Karlshochschule International University
Karlsruhe, Germany
Dirk Nicolas Wagner is Dean of the Faculty for Business
Economics & Management and Professor of Strategic Management at
Karlshochschule International University. Prior to joining Karlshochschule in 2013, he
served in various management positions in the Technical Services Industry in
Europe, most recently as Executive Chairman of the Board of ThyssenKrupp Palmers
Ltd. and as a Director for WWV Wärmeverwertung GmbH & Co KG. His professional
background includes major projects in oil & gas, power and rail infrastructure. Prof
Wagner can be contacted at dwagner@karlshochschule.de
... In Pakistan, both public and private sectors collaborate in several infrastructure development projects, such as the China-Pakistan Economic Corridor and Naya Pakistan Housing program, with immense confidence to accomplish socially valued success. Nevertheless, most risk factors linked with project failures (Farid et al., 2020;Wagner, 2016) can be attributed to the neglect of human elements directly engaged in projects: leadership and team members. Despite having a strategic standing, the human factors have a dearth of inquiry in the realm of projects (Maqbool et al., 2017;Tabassi et al., 2017). ...
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We examined the impact of knowledge-oriented leadership on project success via team cohesion and the moderating role of valuing people and project complexity on this relationship. We collected data from 121 project employees in Pakistan in a two-wave field survey at an interval of 15 days. The results showed a positive association between knowledge-oriented leadership and project success, and team cohesion partially mediated this relationship. Valuing people positively moderated the relationship between knowledge-oriented leadership and team cohesion. Project complexity had a negative but insignificant moderating effect on project success. The theoretical and practical implications of these findings are discussed.
... For example, it is typically human to be too optimistic or to procrastinate and to postpone things that would have been better done long ago. These are only two supposedly small peculiarities of human behaviour with which even the failure of major projects worth billions can be explained (Lovallo & Kahneman, 2003;Wagner, 2016). ...
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... To face the challenges of globalization, MCI must improve to achieve higher project success rate, compete through constant improvement in productivity, with more value-added operations & enhanced quality (Hickson, 2014). A higher project success rate helps to improve organizational performance as well as national competitiveness (Wagner, 2016). ...
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... The reasons why projects fail often remain manifold and ambiguous. However, the combination of the cases of Tenerife and the Berlin presented above, suggests that typically human but avoidable behaviors contribute errors and unfold dynamics (see also Wagner, 2016) which lead to error chains that play a significant role for undesired outcomes. It is a long way to go from such an insight to the implementation of what may be called Project Resource Management or Company Resource Management. ...
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... Therefore, is asked the research question, what the scholars worked in this direction? Based on this, the focus is on used methods and techniques during the system analysis and design stage because they impact the successful rate of the information system through the clarification of the incompleteness and inconsistencies that may turn out [1], [2]. During the research conducted is identified that most of the scholars have been working on requirements definition during the meetings with the client, even if they have started to initiate the issue about checking whether the requirements capture the client`s need (requirements validations) but not approving the final requirements in these meetings [3], [4]. ...
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