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November 07, 2013

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FromArseToElbow

The planning fallacy (or optimism bias) is real, but so too is the bad news bias - i.e. failures get more publicity than successes. In fairness, failure is usually a lot more entertaining (except for the participants). Schadenfreude at hubris confounded never goes out of fashion.

In fact, large-scale projects can be planned successfully (i.e. approximately on-time and budget and delivering the promised benefits), using standard deterministic and probabilistic techniques (in a nutshell: plan from worst-case backwards). The common causes of project failure are well known. Their persistence is a feature, not a bug - i.e. a reflection of political constraints, vested interests (rent), or a cultural overhead ("the cost of doing business").

Common-sense tells us that major projects do succeed without pulling the world down around our ears. GDP growth can be interpreted as success exceeding failure in aggregate (and as failures often "cost" a mutliple of original estimates, there must be a lot of successes).

Pessimistic planning tends to be eschewed by organisations wedded to the heroic leader fallacy, where simply describing success is deemed to be 90% of implementation (Hitler in his bunker and IDS have a lot in common on this score). This is near mandatory for projects that are the result of political initiatives.

Jim

"what makes the private sector successful - insofar as it is - is not so much the quality of management as the existence of markets"

There is more joy in heaven over one sinner who repenteth.........hallelujah!

rogerh

Relying on chance to ensure project elements come together is known as the 'poke and hope' method - completely hopeless. Relying on chance or rigid specifications alone to ensure the elements come together is a recipe for failure. Good project work is a constant fight against chaos.

Error is common enough and some error is unavoidable but timely feedback systems will, with luck and skill, keep the project on track. The word being timely.

I generally avoided government work, the worst problem was that the requirements were usually internally inconsistent. In the private sector you point this out and get a straight(ish) and honest(ish) answer to fix the issue - not so on a government job. So government work attracts a special breed who are well used to the process and have billing systems to match. Failure is less common in the private sector IMHO, the targets are clearer.

Phil Beesley

The two aircraft carrier builds provided opportunity for an expensive but illuminating experiment. One carrier could have been built according to the original project outline, with appropriate technical mitigations and corrections, but without change of scope or fundamental design. The other could have been built using the project management which was adopted. At the end of it, we could see whether either meets the original or current functional spec.

mutant_dog

See the lead book review from the Economist magazine this week, subtitled "why a strategy is not a plan". I believe it is apposite.

http://www.economist.com/news/books-and-arts/21588834-strategies-too-often-fail-because-more-expected-them-they-can-deliver-why

Guano

I have done evaluations of a number of World Bank projects in Africa over the last 20 years. They have had a common failing. After the usual pre-project planning, a large contract is signed with a European or North American engineering contractor. After a few weeks or months, it is discovered that the initial conditions are different from those assumed in the initial planning (eg soil conditions are different, the new project is being linked into an old system that is in a worse state than was assumed). So the project has to be redesigned after a big contract has been signed (maybe 50 million dollars), which means de-scoping or robbing of other budget lines to pay for the cost over-run. Often the budget lines that lose out are small, self-contained add-ons that were running well.

I have always asked the World Bank: why can't you start with a smaller contract that will tease out the unknowns before committing to a big contract. The answer is always that international contractors will not sign up for contracts overseas unless they are in the 50 million dollar range. Local contractors might, but the World Bank insists that projects have to be open to international contractors.

Metatone

As FATE notes, there are plenty of large scale successes, we just hear less about them.

A useful division can be found in Dave Snowden's work between complex and complicated. Complicated can be project managed to success using traditional techniques. Complex is whole different world.

(Chris, your arguments in this area would be a lot more impressive if you had the hang of some of these distinctions.)

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