INTRODUCTION
EXECUTIVE SUMMARY
There is general agreement throughout the industrial world that large complex projects have had a very rough go. There have been a number of books and articles published seeking to diagnose why the track record has been so bleak and even (somewhat naïve) calls to stop doing megaprojects altogether in the future.1 The problems are not new and have been documented by academics, the trade press, and occasionally even the daily news for at least 30 years.2 Nor are the problems confined to any particular sector. Flyvbjerg et al. document the problems in public infrastructure projects.3 Merrow (2011) has reported the record of the petroleum, chemicals, and minerals industries.4 It's not a pretty picture. Megaprojects fail more than twice as often as their under-$1 billion counterparts using the same criteria for failure.
Amidst all this discussion of failure it is easy to overlook the fact that about one complex project in three is highly successful. The successes are too numerous to be dismissed as flukes. In Industrial Megaprojects (2011) we showed that when large complex projects followed a particular set of practices, they were quite likely to generate not just good but genuinely excellent outcomes. This indicated that success and failure were not in any sense random. What we could not satisfactorily explain is why relatively so few megaprojects actually employed sound practices. The failure to do so could not be explained by ignorance because the practices are known throughout the modern projects world, especially over the past 15 years. We rationalized some of the failure away by noting how difficult getting the right work done is for complex projects. But that still failed to explain why the successes were able to accomplish in practices what the failures could not.
The missing piece of the puzzle is to be found in the nature of project leadership, how leaders are selected for complex projects, and how they must behave to achieve success. Although we noted in Industrial Megaprojects that leaders have a disproportionate effect on project results in complex projects, we did not deeply investigate why. That is the subject of this book.
We considered titling this book The Leadership of Megaprojects. But that title would have obscured an essential point: the characteristic that generates so many problems for megaprojects is that most of them are complex, and it is complexity rather than size that triggers the pathway to failure. When smaller projects have the same degree of complexity, they too have an equally high rate of disappointing projects. They are simply much less likely to be complex.
Complexity occurs in three dimensions in projects: scope, organization, and shaping. Scope complexity occurs when a project has a number of distinct elements, drawing on different technical disciplines, all of which must be fully and carefully coordinated to produce a valuable result. Scope complexity is exacerbated by uncertainty in the basic technical data underpinning designs in many large projects. Petroleum development projects, for example, always have a major basic data development challenge in trying to understand the reservoir being developed. Scope complexity is the most common source of organizational complexity. The project organization is complex when a number of separate teams are required to execute the scope. These teams are often required because the technical disciplines needed to develop the area of work are distinct. Organizational complexity is also created in project systems that organize by function rather than by project teams led by an authoritative director. Finally, shaping is the process by which the benefits of a project are allocated among the various stakeholders along with the allocation of costs and management of risks. Shaping complexity is high when the stakeholder set that must be aligned around the project is diverse and potentially quarrelsome, usually with both private and public-sector players.
There are all sorts of reasons that complexity makes projects more difficult, but the biggest problem that complexity presents is that complexity transforms the leadership requirements for a project from the arena of project management to the realm of project leadership. In a complex project, the person at the top cannot watch the performance of most of those involved. In a complex project, the leader cannot demand compliance from recalcitrant stakeholders. Leadership is the art of getting full cooperation from those who are not forced to comply. Unfortunately, those responsible for selecting project directors for complex projects are usually not aware of the transformed requirements.
Good project managers are good organizers. They plan out the tasks that need to be accomplished and the order in which those tasks are to be done. They then assign tasks to those with the disciplinary competence to execute them and hold everyone accountable for delivering their part of the work on time and budget. Good project managers can be quite transactional about the whole process and be quite successful.
Complexity requires leaders at the top of the project rather than project managers. Some project managers are by nature and development both leaders and managers, but most are not. When the wrong selection process is used and the wrong person is selected to sit atop a complex project, failure regularly follows. The whole process is illustrated in Figure I.1.
Figure I.1 The Leadership of Complex Projects
PROJECT LEADERS VERSUS PROJECT MANAGERS
In our study of the directors of complex projects, we find that successful leaders display very different personalities and backgrounds from the unsuccessful leaders, but the unsuccessful leaders look very much like the profiles of most project managers of simpler projects. The usual selection process for new complex project leaders is to draw from the pool of successful project managers of simple projects. Sometimes they have the "right stuff," as Tom Wolfe would say, and sometimes they don't.
To investigate what constitutes the right stuff we administered a battery of psychological tests to 56 complex project leaders along with a survey of their backgrounds and career development. We then linked this information statistically to the tasks that the leaders found valuable and spent their time on and finally to the practices executed on the projects. Successful project leaders have a generalist orientation, although they may have started their careers as effective technical specialists. They are unusually open personalities, and especially so when one considers that all of our sample consisted of engineers by original training. Open personalities are better learners on the whole and deal with uncertainty much more easily than those who measure as more closed. Open personalities are more likely to listen to more points of view as well. Among the seven successful leaders with whom we conducted in-depth interviews, we found that most had very clear and well-articulated approaches to learning.
The successful leaders scored higher on five of the six scales measuring different attributes of emotional intelligence.5 Emotional intelligence is different than standard IQ. Emotional intelligence measures people skills and overall facility with recognizing and using emotions. Such skills might be a plus for the manager of a simple project, but they are a must for project leaders because project leaders are not so much governors of tasks as they are leaders of managers and aligners of stakeholders. Strong people skills are integral to effective leadership.
Successful leaders tended to have had a more varied career, especially early on. They were more likely to have worked for another company in another industry before settling into their career. They were much more likely to have worked as a liaison in a joint venture operated by another company than unsuccessful leaders.
WHAT SUCCESSFUL LEADERS DO
Personality and emotional intelligence don't develop and execute projects. What they do, however, is shape the tasks that project leaders like to do and find important to do. Leaders with open personalities with high emotional intelligence focused their work on communication, people management, stakeholder management, and working with people in the supply chain. Those with more black-and-white personalities found dealing with emotions more difficult and focused their attention on work process, project management tasks, controls, and engineering tasks. In other words, those that had failed complex projects focused on the classical project management tasks. Those who succeeded focused on the classical leadership tasks. Not a very surprising conclusion but one that is rewarding to actually prove.
A successful project leader is able to get the needed practices accomplished at the right time while their failing colleagues cannot. The reader should recognize that getting the right things done at the right time for complex projects is very difficult. It requires that a lot of things are accomplished in a short period of time by people who often have never worked together before. Implementing the right practices at the right time is a manifestation of the ability of the successful complex project leader to generate extraordinary levels of cooperation from all involved.
FROM TASKS TO PRACTICES
Of course, at the end of the day, it is...
