MAKING YOUR PROJECTS A SUCCESSFUL ENTERPRISE FOR ALL STAKEHOLDERS
Is Mega Project Success an Illusion?
Is Success for complex or large infrastructure projects an illusion?
Do we really understand what a successful infrastructure project is? Does the client, supplier, project delivery manager or neighbour of the construction site define ‘Success’ the same? When we state an infrastructure project was a success do we actually mean that the project delivery stage was a success or we mean the Project was a success? Are the factors that make projects successful the same for all projects including complex and large infrastructure projects?
What is Project Success?
Projects are normally implemented to deliver specific benefits. Therefore, a project that delivers the intended benefits is said to be successful. Some deliver benefits that are different from what was initially envisaged in the business case and projects that were thought to have failed due to not delivering the intended benefits several years down the line become huge success stories. However, benefits may not be realised for years and years, which makes it difficult to state that a project was a success. Due to this, project success can therefore be judged in two phases:
1) delivering the infrastructure to a benchmarked success criteria and
2) implementing the completed infrastructure to reap the intended benefits.
Golden triangle of project success: Time, Cost and Quality
Mostly, the client’s project management team will see the project as a success if they deliver the project to meet the benchmarked success criteria. This benchmarked success criteria, the supposedly golden triangle of Time, Cost and Quality has resulted in several projects being prematurely classified as failures. At times, the benchmarks were underestimated or erroneous in the first place. Note that, not meeting the project management success criteria does not mean that the project is a failure although they mostly classified as so. One can say it reduces the likelihood of project success. Also, although meeting the benchmarked criteria may improve the chances of success, it does not guarantee that the project will be a success either.
Different stakeholders’ views of success
Although the client has his own definition of success, the contractor/supplier, the public, critical stakeholders, the project delivery team and neighbours of the construction site will also have their own views of whether the infrastructure project was a success.
What constitutes success? A tricky problem
Let’s say a project is delivered on cost and schedule, but the project team completed the work with several of the team off with stress and heart problems or the team failed to be developed during the progress of the project. Would you call this a successful project? Let’s say a project completely overruns its budget; however, the final product was seen as a success by future generations. Would such a project be said to have failed?
Was the Sydney Opera House a success?
Take the Sydney Opera House, for example. This is one of the most iconic buildings in the world and a major tourist attraction. The construction of this building started in 1959, with an estimated cost to complete of $7m and taking four years. It came in 10 years late and $93m over budget. So, was it a failure or a success?
Was the Channel Tunnel a success?
Another example is the Channel tunnel, a trio of 31-mile-long tunnels beneath the English Channel connecting France and England. This came in at $21bn, 80% more than projected, making it one of the most expensive projects in UK. At the time it was considered a failure and simultaneously an engineering marvel. Margaret Thatcher considered it a success and her opponents considered it as a failure. Time has proven it to be one of the most vital pieces of infrastructure probably on par with the Panama Canal and the Hoover Dam. Considering the number of people using the link currently, would one consider this a failed project, or has it been a success?
Was the Jubilee line extension a success?
The Jubilee line extension started in December 1993 and then opened in 1999. The initial cost forecast was between £2bn and £2.5bn; however; the out-turn cost was £3.5bn. Although the project seems to have come in 40% over budget, it clearly had a huge positive impact on the community. An Oxford University study in 2007 estimated that there was an increase of total property value around Southwark and Canary Wharf Stations of more than £2.1bn (above inflation) and that this could be solely attributed to the impact of the extension. The government estimated that the project cost the taxpayers approximately £6bn in initial costs and maintenance but has generated around £10bn of economic benefit. Was this project a failure because it did not come in at cost?
UK historic infrastructure now seen as successful
Britain is built on several infrastructure designed and constructed by Isambard Kingdom Brunel. Most of those projects came in over budget; however, can these railways, bridges, tunnels, and ships be considered failed projects if you consider their impact a hundred years later?
Most of these projects were seen as failures not because of the benefits realised down the line but comparisons made to a set of benchmarked success criteria which may have been erroneous in the first place.
It is important to note that, large infrastructure projects do cut the costs of production of goods and their transportation substantially, bring cities closer together, resulting in several other indirect benefits to the economy. These are not normally estimated accurately.
Distinguish actual project success from project management/delivery success
So it is quite clear that what we sometimes term project success is actually project management success or the success of the delivery stage. Even with that definition, although the client may see it as a success, the supplier and other stakeholders may see the project as a failure. And even if they all considered the project delivery stage as a success there is no guarantee that the Project will be a success as the benefits have not been realised yet.
This brings us to what benchmarked criteria should be used to even judge the success of the delivery stage of large infrastructure projects.
Client Pays, why not his definition of project success?
Most people will say; after all the client pays the bills and therefore his definition of success is the only one that matters. Really? This attitude is taken by a number of client project managers.
However, it is important to note that, if the clients definition of success jeopardises that of the supplier and other stakeholders, then they are likely to frustrate the clients definition. On a large Infrastructure project where changes to the contract are inevitable, the suppliers have several opportunities to do just that.
Bringing everyone, including the public, definition to the table for discussion is the key to overall project success.
Project success as ‘the satisfaction of all stakeholders’
A research on Best Practices and Lessons Learnt in Large Infrastructure Projects in Europe by the NETLIPSE project on 15 projects defined project success as: ‘The satisfaction of all stakeholders’. It stated that ‘perceiving project success simply as the compliance of time, finance, and quality constraints can be described as a more ‘narrow’ view in this respect’.
Set up success kpis at the start
This means that every large infrastructure project should take the time at the onset of the project to define what success means to all the stakeholders. This should include the client, the delivery team, the suppliers, the public and all critical stakeholders. The team can then come up with a set of benchmarked criteria that will ensure the success of a complex or large infrastructure project.
Success criteria for complex and large infrastructure projects: Include the human circle
Quality, time, and cost may be good metrics for projects. However, they are not the only metrics for determining whether a project is in crisis, has failed, or was successful. For large infrastructure projects, the impact on humans during the planning, construction, and maintenance of the infrastructure project should be one of the metrics. The new concept of the trio of quality, cost, and time triangle enveloped in the human circle should be developed. This new, fourth metric involves
- the effect on humans factors such as skills developed during the project,
- effect on humans during the construction and planning stages,
- the effect on the mental health of the people building the project,
- public perception,
- relationship among teams and suppliers etc.
Who knows? Just maybe — if we focus a bit more and measure the human factor in with quality, time, and cost — we may finally be able to bring quality, time, and cost under control. May be we need to consider a ‘TCQ Triangle’ fitted in a circle of human factors.
Figure 1 A review of success criteria
That is to say that, T, C, Q can move around as long as they do not affect the human factors. Note that this is not the conventional TCQ triangle; rather you cannot constrain (increase/decrease) any of those if they have a negative effect on the human factor.
More metrics can and should be used
The point is not to say that quality, time, and cost are not good metrics or success criteria to measure against; however, they are not the only metrics that determines the success of a project. As mentioned previously, what is considered as successful from a client’s point of view may not be successful from the supplier/contractor’s point of view on an infrastructure project. Different suppliers may have different views of what they believe makes a successful project. However, each supplier will be encouraged if the project they delivered led to an enhanced image and likely repeat business in the industry if they did not suffer a loss. Therefore, to a supplier, a reasonable profit, an enhanced image, and likely repeat business can be looked at as the criteria for a successful project. The public perception of success also may be different.
The stakeholder’s view affects the best metric to use
Also note that, some of the criteria, depending on the project, may be more relevant to the client than others. For example, a client may deem delivering a railway or nuclear infrastructure on time as more critical than delivering on budget due to the subsequent penalties and costs of not meeting the date. An investor’s main purpose of undertaking a project may be to break into new markets or get a foothold in another country.
Some example metrics to use
We all know that the benefits of the project will be realised probably several years down the line however the project team needs a set of criteria to claim success so they can repeat it on other projects. The below are a set of criteria that the project leader can start with.
• Delivers within the budget, which includes all scope changes the client introduced with the additional budget for these;
• Delivers on the agreed schedule within the agreed tolerance;
• Achieves all the critical deliverables originally set for it;
• Is accepted by the client (customer and stakeholder satisfaction);
• Supplier makes a reasonable profit;
• Develops great stakeholder relationships during the project;
• Ensures the team completed the work with newly developed skills which they can use in the future and are also in good mental health;
• Had a successful relationship with the community which the construction of the infrastructure impacted; and
• A reasonable public image.
The above criteria although applicable to all infrastructure projects will need to be refined further and tailored to every unique infrastructure project.
Every complex or large infrastructure project should start with the team including all critical stakeholders defining and agreeing what success means to them in a series of workshops. This will ensure that the right success factors can be identified. This is applicable to the packages in large infrastructure projects as well.
Success factors are basically things that contribute to the success of projects. When complex or large infrastructure projects are considered to be failures, investigating the reasons for the perceived failure may not always be straight forward however they will ultimately be uncovered. Even then, the lessons learnt identification process focuses too much on the lack of project management procedures and sometimes fails to identify the critical soft skills. However, identifying the reasons that made a large infrastructure project a success are sometimes more complex. This is because the success of large infrastructure projects are due to reasons wider than just the application of standard project management procedures.
There are a number of case studies and research on success factors on projects in general; some are specific to information technology and others on infrastructure projects. Although most of these overlap they are also wide ranging and are dependent on the industry and whose perspective it is from.
Most of the success factors they identify are standard practices on projects and are more than likely to be implemented on large infrastructure projects. Also what may be critical on a small, non-complex project may be a standard practice on a large infrastructure project and not necessarily the critical factor to make it a success. For example, a governance may be critical on a standard project but not necessarily critical on a large infrastructure project. On the flip side, a collaborative relationship with your suppliers may be critical on a large infrastructure project but not critical on a standard, straightforward project.
The larger and more complex an infrastructure project is, the more the success factors lean to the human aspect or what is referred to as “soft skills,” rather than standard project management procedures.
Fig 2 – Success Factors vs Complexity of project
As you’ve realised by now, one cannot list all the success factors required for every project, as most projects will be unique in one way or the other. However, one can group the various factors and consider overall success factors that will enable the achievement of other success factors. For example, if the client makes the right budget available and does not choose a supplier/contractor based on cost, then it is more likely that the contractor will provide the right resources to achieve a safely constructed product with the right quality. If the project team takes on a true spirit of collaboration, then one can expect there to be trust in the client-supplier relationship. If the client and supplier adopt a lean management philosophy, then it is likely that schedule and cost may also come in as planned. Lastly, to achieve all these, the client will have to demonstrate effective leadership from start to completion of the project to ensure proper communication with stakeholders and the entire project.
The following are 10 critical success factors that you as a project leader of a large infrastructure project can start with:
1. Effective top-level management support
2. Choosing the right team
3. Making the procurement process count
4. Developing a robust project schedule
5. Monitoring and control
6. Proactive risk management
7. Reactive troubleshooting
8. Supplier collaboration
9. Lean Philosophy
10. Project Leadership
An excerpt of ‘Delivering Successful Megaprojects’. Will be out in May 2018.
The book goes into depth on the tools required to ensure the success of complex or large Infrastructure projects. It helps the project leader define success uniquely for their project and identify what criteria to benchmark. This will enable him identify factors that will make the project a success. It combines a unique blend of the Art and Science of Project Management and gives the project leader practical tools to use on their project.
Author :Clement Kwegyir-Afful BSc MSc MAPM CEng FICE
Director of KAPM Services Limited. A specialist project management firm for complex and large infrastructure projects.
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