Taming Giant Projects

Multi-Organization Enterprises (MOEs) are commonly used to accomplish a mission either in technology, economy, culture, or politics. They are apt to meet challenges like developing space technology, improving public facilities (traffic, health services, and power supplies), hosting international events (like Olympic Games) or changing the social, economic, and ecological standards in developing and industrialized countries.

MOEs are defined as temporary undertakings. Time goals should ensure project completion by a predetermined date or within a predetermined period. In some cases, the time goals are even crucial. For Olympic Games, the year of the event, the opening date, and the duration are fixed several years in advance. The failure to achieve time goals may have substantial consequences for the project, such as awarding the Games to another host city and therefore making the project obsolete. We will first deal with the structure of time goals and then turn to their achievement in MOEs.

One of the main arguments for setting up a project management system is its potential for limiting the financial consequences of large and risky undertakings. Experience has shown that the reasons for most of the outright disasters were the enormous cost “explosions”. It is not surprising, therefore, that the literature on project management has focused on financial goals.¹⁰ Flyvberg et al. (2003, pp.11), e.g., offer a “calamitous history of cost overrun”. Consequently, they have also been a core topic of our research program.

Project management is a tool to achieve the technical, time, and financial goals of MOEs. Therefore, the evaluation of any single goal as presented in Chapters B to D is a first step in assessing the overall performance. We will start by discussing some basic methodological problems and continue with illustrating the overall performance by examples.

Our discussion of the goal achievement of MOEs in Part Two has shown that not one of the projects studied in detail was successful as far as the overall performance is concerned (achievement of technical and time and financial goals). The following chapters (G to J) focus on the success factors of goal achievement.

Goal formulation and change has been repeatedly addressed throughout this book. The discussion of the goal structure of MOEs shows that goal formulations may be incomplete at the beginning of the planning process. Initial incompleteness requires the goal formulation process to be continued after the project planning has started (Hauschildt 1977, pp.98).

The basic design determines how (technical) goals are to be achieved. The same technical goals may be achieved with different basic designs (e.g. a one- or twoblock design for university hospitals, a bridge or tunnel as a link). In this case, the financial or the time goals may be decisive for the choice of a specific basic design. The basic design of MOEs is crucial for project success:

Until the 1980s the socio-political environment was not discussed in project management. In the past years, however, it has proven indispensable to analyze the socio-political environment when dealing with MOEs. Our analysis includes the various spheres of the socio-political environment (I), its impact on goal achievement (II), and the question of how to manage this success factor (III).

The importance of management structure and management capacity as success factors is undisputed and has been adequately shown by a literature survey (Wildemann 1982, pp.101, Kerzner 2001, pp.161, Cleland/King 1988, pp.269) as well as by our own empirical studies.

This chapter is to show the mutual interrelation of the success factors of MOEs and their interdependence with goal achievement. We start by summarizing our findings on success factors.

A huge volume of empirical sources enabled us to analyze almost 100 variables describing this MOE in all its phases from the initial idea to host the Games to the permanent operation of the facilities after the Games. The main sources were files of the project management and the board (including minutes, budgets, drawings, and organizational charts), periodic reports to the project owners, auditing reports and press releases.²⁴

No internal files of the project owners were available to analyze this case. We had to rely on reports of the Lake Placid Olympic Organizing Committee (LPOOC) to the IOC, on a consultants report, on newspapers and journals.²⁵ An on site visit and interviews with representatives of the permanent users offered the opportunity to get to know the post-Olympic shape of the facilities and how tourism industry in Lake Placid has gained from the Olympics.

This MOE is considered to have been a disaster. It has been one of the most intensively discussed topics in the Austrian media for years. As a resident of Vienna and contemporary witness I had the chance to observe the development of this MOE for decades. Detailed auditing reports by city and federal accounting offices have been additional and highly reliable sources for our analysis.²⁷

As mentioned earlier, a couple of huge university hospitals in block-type design were started in the 1950s. Munich was chosen for a case study because of the remarkable differences in performance from the Vienna Hospital. Politicians involved in the Vienna Hospital even chose it as a model when the Vienna Hospital experienced serious setbacks. Furthermore, it seemed attractive to investigate how the same project owner (State of Bavaria) handled different MOEs (University Hospital and Olympic Games, see case L). The Munich Hospital is welldocumented by authors representing different perspectives, ranging from project owners to planning architects, and users.²⁹

GROWIAN is an acronym consisting of the abbreviations of “Große Windenergie-Anlage” (large wind energy converter). The authors had access to the files of the project company responsible for construction and permanent operation of the MOE (GROWIAN GmbH). In-depth interviews with experts from a preceding project company focused on early phases of the project, especially on the process of goal formulation.³²

By focusing on success factors, it is our intention to prevent MOE disasters in the future. This is a realistic aim due to the high risk inherent in every MOE and the rather limited current knowledge about MOEs. It is certainly worthwhile pursuing because we have witnessed remarkable differences in the level of goal achievement by MOEs. If the Vienna Hospital had been completed with the same performance as the Munich Hospital or if the level of performance of the hospitals had been equal to that of the Olympic Games, project owners (and tax-payers) would have benefited substantially. The lessons we can learn from our cases are various. Some cases have provided information on the “do’s”, others have clearly shown the “don’ts” of MOE management.