Are Modern Projects Too Complex To Deliver To Budget?

Project failure is due to project management practices not keeping up with new aspects of complexity that projects now face, argues David Whitmore, Managing Consultant at MI-GSO | PCUBED.

Third Menai Crossing – scrapped, HS2 – descoped, Crossrail – over budget & late, Sellafield Silos Processing Plant – cancelled (3 times!), Crossrail 2 – shelved, Police Scotland i6 system – cancelled, Wylfa Newydd – abandoned, Moorside – scrapped. Unfortunately I could go on. For every successful Terminal 5 or 2012 there are multiple failed projects in the UK. £100Bns of planned new national infrastructure left out in the cold. Little in the way of societal improvements or progress towards noble goals from the major projects sector. I take no pleasure in highlighting this. In fact as a member of this community I have to hold my hand up to two of the above projects. However, I can also remember a time when it felt different and I take great pride in achievements involving our nuclear submarine fleet, offshore wind farms, transport systems, the UK’s support to Fukushima and many others. So what has changed and why did my and many others’ CVs evolve from a list of successes to, well, you know?

Supported by project management consultancy MIGSO-PCUBED, I have been researching this for some time and I think I know. The first thing we need to accept is that our delivery of major projects has got worse. Other sectors have delivered phenomenal successes with new communication systems, IT capability, finance solutions and entertainment offerings evolving at light speed while the major project sector has at best stagnated. So why has this happened and where can you find some guidance?

First of all, if you’re looking at the project management literature for help, I think you’re looking in the wrong place. Current project management systems developed over the course of the 20^th Century from about 1919 with Taylor and Gantt’s seminal papers through to the 70s with the formation of the professional project management bodies and the publication of the various bodies of knowledge. Prior to this codification of the project management approach, there was no “one way” of doing it and the various tools and techniques evolved broadly in line with the technology project teams were delivering. That makes sense; technology applies to the enabling system as much as it does to the system of interest.

When project management was codified, its development was to some extent frozen. Contemporary developments such as systems engineering, lean, behavioural economics and more latterly Agile were not embodied in the standard approach. But the complexity of the systems of interest kept developing, to the extent that where major projects were once broadly civil, mechanical and electrical systems they are now technology projects and some would argue that every major project is an IT project. So we have created a “complexity gap” between the systems of interest and the enabling system. This means traditional project management solutions simply can’t cope with the level of complexity in the systems they are addressing. And that explains why we are seeing more unsuccessful projects and as the gap increases, we will see fewer and fewer projects succeed … unless we change the enabling system.

People generally accept that there have been four industrial revolutions (Industry 1.0 to 4.0) and based on the above argument we should have seen four step changes in project management. However, I would argue that we have only seen two. The development of Civil Engineering was the first with the formation of the ICE in 1818. PM2.0 was what we came to call project management with the work of Taylor, Gantt and Fayol in 1919. During the 50s and 60s we started to see the evolution of PM3.0 with the introduction of systems engineering, lean, total quality management and software solutions. However, the formation of the professional project management bodies formalised the PM2.0 approach and when the bodies of knowledge were written the new techniques were largely ignored. This doesn’t mean to say the bodies of knowledge are of no use, it’s just that they can’t cope with the high levels of complexity we find in modern projects.

So, as we approach Industry 5.0 we should ask what is missing and what should PM5.0 include. Firstly, the project controls methods should be retained a form a basis for delivery once the complexity has been addressed. However, these controls should be high level, simple and shared by all. To deal with the complexity gap we need to add systems engineering to control complex requirement sets, lean to speed up decision making, modularity (Agile) to break down the complexity into management chunks, digital integration to provide insight and B2B relationship development to build a positive working environment where people are incentivised to innovate and contribute.

I am often asked for a PM4.0 case study and I don’t think there is one for a major project in the UK. The nearest parallels can be found in major projects being delivered in some of the eastern countries. But the most pertinent examples can be found in those industries that feel the red heat of rapid technological change: media, telecoms and financial services.

The first step to improvement is acceptance that current project management practices are not matching the current level of complexity that projects face.

So where should we start? It’s unrealistic to expect to sit down and come up with a radically new approach, implement it on a complex, major project and expect anything other than complete disaster! However, we should learn from those industries that are close to PM5.0. The first step is to build an alliance of companies that have the expertise in the system of interest AND expertise in modern enabling systems. Then focus on the relationships between these companies and incentivise them to innovate progressively, taking the learning from the project to-date and developing the next iteration. And every project will be different, so it requires the same learning based approach for every project.

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Do you agree?

How do you think we can close the capability-complexity gap? Let us know in the comments.

We will be discussing modern complexity at our forthcoming seminar ‘How should Programme Management change to keep up with Modern Complexity?’ on 13th March. We look forward to seeing you there. Register and find out more here.