Robust Decision Making for managing engineering megaprojects
PhD student: Morten Wied
Cooperation Partners: NTNU, Gate21, Nobina
Project duration: 2017-2020
Most complex engineering projects encounter unexpected events sometime in their life cycle. Effective opposition, economic turbulence, technical problems, partner pull-out, legislative change, new requirements, and early obsolescence are typical ‘plan breakers’. Adding to these are a plethora of oddball happenings, freak accidents, archaeological discoveries, rare natural phenomena, and sometimes malicious sabotage. Such events are common causes of underperformance or failure. Indeed, most complex engineering projects fail to meet the expectations that motivated them.
The traditional solution to this problem has been increasingly sophisticated up-front analysis and planning aimed at ‘de-risking’ projects and ‘de-biasing’ planners. There is little evidence, however, that these efforts have eliminated unexpected events, nor their impact on project performance. While individually unlikely, collectively, unexpected events occur with surprising regularity. This places project management at the horns of a dilemma. On the one hand, the requirement that planners must ‘be right’ about the future for projects succeed seems unattainable, in light of persistent unexpected events. On the other, relying on blind luck seems unacceptable in light of the high stakes involved.
Through the lens of resilient systems theory, this project explores an alternative to foresight and luck. This project is about the properties allowing some complex engineering projects to resist and recover from unexpected events, without the need to foresee them. Thus, the subject of this project is ‘successful failures’, i.e. projects that are ‘wrong, but not failed’. The aim of the project is to extend resilient systems theory to complex engineering projects, and, through this lens, explore non-anticipatory solutions to the problem of project planning, selection, and implementation. The investigation is guided by three overarching research questions:
RQ1: What distinguishes resilient from brittle systems, and what are the implications for complex engineering project management?
RQ2: Why do some complex engineering projects fail, while others succeed, despite, or even because of, unexpected events?
RQ3: How can complex engineering projects build resilience to unexpected events?
The three questions are investigated through the literature, retrospective and longitudinal case studies of complex projects, and interviews with experienced project managers.
In answer to the first question (RQ1), the project extends resilient systems theory to complex engineering project management. In doing so, the project challenges a paradigmatic assumption of traditional project management; that information precedes action. In most complex systems, this assumption does not hold. Rather, the most critical information typically surfaces through implementation and operation – not up-front analysis and planning. In actuality, action often precedes information. Indeed, action is often a prerequisite for dislodging information. This makes implementation and operation the primary information-producing processes. Paradoxically, the minimum requirement for learning the outcome of most complex engineering projects, is to implement them. Through the lens of resilience theory, the problem of unexpected events is thus reframed from one of inaccurate foresight to one of unrecognised ignorance, and the solution from one of improved foresight to one of general preparedness. Offering an alternative to foresight and luck, extended resilience theory delineates a ‘non-anticipatory’ paradigm of project management. It suggests that some projects have shared properties allowing them to resist and recover from unexpected events, without the need to foresee them. This shifts the emphasis of project characteristics of projects themselves.
In answer to the third question (RQ3), the project prescribes a combination of Socratic humility about the future and an ethos of ‘prudent action’. Through the lens of resilience theory, the emphasis of project management falls on action rather than information, i.e. on what we do rather than what we know. In this light, the properties of brittle projects function as diagnostic markers – warning signs of success-dependence on foresight or luck. Conversely, the properties of resilient projects offers a menu of possibilities for building resilience. Based on these, the project sets out practical prescriptions for building project resilience and discusses their implications for project planning, selection, and implementation.
The project makes six main contributes to the knowledge base on complex engineering project management – two corresponding to each research question: In answer to RQ1, the project develops a framework for analysing resilience and brittleness (C1), and develops a typology of resilient systems across disciplines and application domains (C2). In answer to RQ2, the project develops an opportunity cost view of project performance (C3), and identifies properties distinguishing projects able to succeed despite, or because of, unexpected events from projects which cannot (C4). In answer to RQ3, the project identifies a repertoire of approaches to managing uncertain projects across a range of industries and project types (C5), and outlines adaptation, acceptance and positioning as a principal solution space for building resilience to unexpected events (C6).
Overall, the project provides an alternative perspective on both the problem and the solution consistently poor performance of complex engineering projects, and raises a new set of questions for project planning, selection, and implementation. Prescriptively, the project emphasises preparedness over prediction, and prudent action over accurate information. Fundamentally, the message of the project is that we do not need to know the future to act wisely, but pretending to know the future when we do not, causes us to act foolishly.