What lessons can we learn from noteworthy projects that failed or were delivered successfully.
Projects are everywhere in our lives: personal projects, development projects, educational projects, business projects, capacity building projects, infrastructure projects, innovation projects, technology projects, research and development projects. There have been zillions of projects in the past; there will be zillions of projects in the future. Basically, we got where we are now through projects.
What is fascinating about all these projects is that they all share a set of common characteristics, which, if well understood, soundly addressed, and actively managed; can increase the chances of success and minimize the risk of failure. This is what we do in project management. Yet, every year, millions of projects fail.
Using a simplified framework – composed of ten areas of focus – that I developed over years of teaching executives how to do better projects and that I apply consistently in my day-to-day job, I will look at relevant projects that are currently on the spotlight. Some of them are well managed; others are poorly managed. My hope is that this section will help you become more successful at executing the projects you face in every area of your life.
The Berlin Brandenburg Airport
One of the most surprising project failures I came across recently involved the new Berlin airport. It is rare to see a project of such size fail, especially in Germany, a country known for its effectiveness, efficiency, and planning capabilities.
One of the main goals of this project was for the Berlin Brandenburg Airport to become the busiest airport in Germany, with a projected 45 million passengers annually. The airport’s feasibility and preplanning phase took about 15 years. Construction started in 2006, and the airport would take five years to be built. The target opening date was October 30th 2011. Today, six year later than the original planned launch day, the Berlin Airport has yet to open. The latest estimate of total project costs is €7.9 billion, almost 50 percent above the approved budget of €5.4 billion!
Using a simple framework, let’s look at what went wrong in this project:
Stakeholders – Too Many and With Different Interests
The state of Brandenburg, the German federal government, the city major, the airlines, the passengers, the workers, the Berlin citizens, the two other Berlin airports were all stakeholders. The more stakeholders, the more complex the project and the more effort required in communication and change management matters. In addition, in most important projects, there are often one or a few stakeholders that will be happy if the project fails. We could assume that some of the key stakeholders at Berlin’s Tegel and Schönefeld airports didn’t mind the huge delays.
Communication – Important to Report the Real Status
According to extensive research, communication is the most important task when the project is being executed. Communication also means sharing the right information and the correct status of the project. The city’s mayor, Klaus Wowereit, who acted as project sponsor and chairman of the supervisory board, has been accused of pretending that there were no problems during construction, even as the situation grew worse. The lack of acknowledgement of the critical situation gave the impression that there was no need to act. In 2013, Mr. Wowereit was removed from his post. True project leaders are not afraid of communicating and addressing the bad news straight ahead.
Scope – Several and Major Changes
The more the scope (i.e., design, requirements, functionality, features, characteristics) changes, the more challenging it is to deliver the project successfully and according to the initial plan. The Berlin Airport was a good example of significant scope changes (we called it “scope creep”). One instance was when with construction under way, one of the key stakeholders, Mr. Schwarz (general manager of the airport management company), seizing on increasing forecasts for air traffic, asked the architect to add north and south “piers” to the main terminal, turning it from a rectangle into a “U” and dramatically enlarging the floor space. At a later stage, Mr. Schwarz, with the vision of making the airport a Dubai-like luxury mall, asked to insert into the original plan a second level jammed with shops, boutiques, and food courts.
Quality – Insufficient Quality Tests
Quality checks are planned throughout a project to test and ensure that the final outcome will meet the expectations. The Berlin Airport project encountered significant quality issues, which is surprising in a country so focused on excellence and high quality standards. Reports indicate that 66,500 defects were found, 34,000 are described as “significant” and 5,845 as “critical.” Critical defects included a nonfunctional fire protection, an alarm system that was not built in accordance with appropriate building codes, wrongly placed smoke extractors, conducts without isolation, and walls built to the wrong fire rating. Significant reconstructions have been planned to remedy the disastrous situation.
Books
In addition to the five books he has authored, Antonio has contributed to seven other business books.
Conclusion – Too Many Fundamentals Not in Place
This brief high-level analysis shows that too many critical areas had been poorly managed. The Berlin Airport was doomed to fail.
Further reading:
Bloomberg: How Berlin’s futuristic airport became a 6 billion embarrassment
Der Spiegel: Investigation on how the new berlin airport project fell apart
Any thoughts? What could have they done differently?
Antonio Nieto-Rodriguez
World Champion in Project Management | Professor | Director Global PMO | PMI Past Chair | Author | Blogger | Speaker
GSK • London Business School • Brussels Area, Belgium • 500+
I see many similarities between Denver International Airport and Berlin Airport. Cost overruns, bad management, etc.
Thanks for the comment Linda. The Denver International Airport is in my list to analyse in the future as another example of project disaster; you are right, it is very similar to the one in Berlin.
Dear Antonio Nieto-Roudriguez,
muchas gracias – thx for this brief and insightful high-level analysis.
Considering the last events – the last CEO of the Berlin Airports (Berlin Brandenburg Fluhafen GmbH) Karsten Mühlenfeld was fired, and replaced by the Berlin state secretary named Engelbert Lütke Daldrup. Engelbert is a trusted person of the current Lord Mayor of Berlin Michael Müller. Michael Müller and the two other representatives in the corporate control board of the Berlin Brandenburg Fluhafen GmbH withdrew from their positions. Now it has become very likely that the Airport will not open in 2018, but in 2019 or later. Thus, the mis-management story has reached a new peak, and it will probably go worse and cost another 360 million Dollars just to maintaing operational readiness, and to fix the NEWLY detected severe problems. Most likely the “new” bad news are not really new – and the senior managers of the Berlin Brandenburg Fluhafen GmbH were just not allowed to communicate the real situation before the recent Berlin elections.
I want to add another perspective to the case study. The demand for air traffic has increased dramatically since 2012, and the increase is still going on, because Berlin is a very attractive City, and the town and its environment are growing each year. This is further increased by the economic crises in other European countries, and a large stream of immigrants from other European countries. The stream of refugees and the implementation of the Brexit may further increase a growth of Berlin and its demand for air traffic.
How did Berlin cope with the increased demand? Well, baracks were built on the existing Airports Berlin Tegel and Berlin-Schönefeld, which is in Brandenburg, adjacent to the unfinished Airport BER. Nowadays most people are not using the old regular airport, but such barracks. The question is. Why did the Berlin Brandenburg Fluhafen GmbH not yet build such barracks on the ground of the BER and already used this Airport? If barracks get approved in Tegel and Schönefeld, why not at BER?
Following the “The Hierarchy of Purpose” developed by Antonio Nieto-Roudrigez what would we ask first?
Right – you got it – we would first ask for the PUROPOSE of the BER! And what is the purporse? The purpose is to eable transport of passengers and freight. It is NOT the primary purpose to fix the problems of a building – irrespective of much you have already invested and how beautiful this building looks like.
Thus, enabling air traffic – this what the citizens of Berlin and Brandenburg want, this is what the Germans want, and this is what all foreigners want: they simply want to visit Berlin by plane and to get home safely and quickly.
Thus, the politicians in Berlin have set the priorities wrong – they talk about the means – but have lost their main goal out of sight.
I have done research on goal formation since 1973, when I was a young PhD student, and we had a saying at this time, which still applies: “Having lost our objectives out of sight, we doubled our efforts.”
It is not a problem of engineering or management, which causes the most challenging problem, it is a problem of setting the wrong priorities. And this is a problem of the politicians, and of the people, who do elect them again, again despite this ongoing mis-management, despite ongoing attempts to solve primarily the wrong issue, and in addition, they do this in a very bad way.
I feel ashamed for my town in which I live, and ashamed for the professions of engineering and management, which suffer so much through this “project” – and I sincerely hope that we get back to the roots of the problem, and set the right priorities.
I want to thank Antonio for bringing focus back into the debate by his book and his article in HBR.
Dear Hans-Georg, many thanks for sharing your additional insights on this disastrous projects. In a country were large projects are usually extremelly well managed, it was a real surprised to me. I like your reference to your PhD times. “Having lost our objectives out of sight, we doubled our efforts.”. Some concepts remain always relevant. Fully agree with you, the problem lies on identifing the real purpose of the projects and setting the right priorities thereafter. I hope you can tell the politicians how to take this project forward.
Just a correction: I wrote “Thus, the mis-management story has reached a new peak, and it will probably go worse and cost another 360 million Dollars just to maintaing operational readiness, and to fix the NEWLY detected severe problems.”
Please correct to “360 million Dollars per year” –
In the end we will probably be ten years late compared to the initially promised 2009. This means 3.6 billion US $ or Euros just because of trying to fix a self-generated problem, and ten years of benefit losses. The benefit losses are probbly two times higher than the cost overruns, because you only approve such a project, if you have very high benefits, and the unexpected high increase in demand of air transportation, means that huge opportunities for additional benefits have been ignored. If we would live in a business world competitors would have already exploited these opportunities.
Observation noted Hans-Georg, the value destruction of this project (money spent and unachieved benefits), are hard to estimate with precision, but you are right, they must be close to 10 billion euro.
Another interesting reflection is that besides the old CEO of Berlin Airports, Karsten Mühlenfeld, that was fired, no one is really accountable for this colossal loss for Berlin and for Germany.
Thank you Antonio for this article! I find it very interesting from two perspectives: as a case study for my PM students, and as a case study in my Governance work. I’m not talking only about Project Governance, but also much broader… Board Governance. I see several notations of the Board having an effect on expectations and their implementation. In fact, so many Boards today continue to govern in an adhoc or proscriptive sort of way, rather than codifying their values and expectations within the boundaries of unacceptable behavior. So many boards get in the way of operational/project work, just as noted in this article. In the end, project leadership and staff get their priorities confused.
When I teach PMP bootcamps, I often tell students to do a root cause analysis to understand the Purpose of doing their project, so that they can make good decisions later.
From both the Board Governance perspective and the Project Governance perspective, we need to define Purpose or Ends, on whose behalf, at what worth or priority. (Ends) Then we need to codify the boundaries of unacceptable, unethical, immoral behaviors. (Executive Limitations). Frequent Monitoring, along with these two balancing mechanisms, should allow governors and sponsors to get out of the way, and let the project leaders get their job done.
One last thing…. over the last 6 years of teaching PM, I continue to find a real world gap in understanding and executing on the role of Project Sponsor. In the real world, many folks are assigned projects or inherit them. They often don’t even know that Project Sponsor is a real and specific role, much less perform it effectively. I often suggest to my PM students that they may have to teach upwards on what the job of a Project Sponsor is, to avoid Absentee Sponsors.
What do you think?
Athens Kolias, MPM, PMP, PMI-ACP, PGP