In the film Dirty Harry, the title character, a police detective played by Clint Eastwood, puts an end to an attempted bank robbery by shooting two of the robbers, and then holds the third at gunpoint. He tells him, “I know what you’re thinking: ‘Did he fire six shots or only five?’ Well, to tell you the truth, in all this excitement, I’ve kinda lost track myself. But being this is a .44 Magnum, the most powerful handgun in the world, and would blow your head clean off, you’ve got to ask yourself one question: ‘Do I feel lucky?’ Well, do you, punk?”
Most projects suffer from cost growth and schedule delays. Regardless of the industry, 80-90% experience in an increase in cost and/or a slip in schedule from initial plans. Some projects experience cost increases by several multiples. For example, the Sydney Opera House suffered from a 1,400% increase in cost from its initial plan. Even when a project is able to meets its schedule and stay within its budget, much of the time this is only achieved by sacrificing performance, either by taking on technical risk or by cutting scope. For example, a satellite is planned to include five scientific instruments, but is launched with only two.
However, occasionally projects get it right – they meet technical requirements, are delivered on time, and do not experience a cost overrun. Are such projects lucky or good? The answer is both can contribute to these rare instances. A prime example is The Empire State Building in New York. Built in 1930-1931, this 102-story skyscraper is an American icon. It was the first building with over 100 floors and was the tallest building in the world for four decades. It also finished earlier than planned and the final cost was less than budgeted. The initial plan was 18 months and $43 million. Construction was completed in one year and 45 days at a total cost equal to $24.7 million, 25% faster and 43% cheaper than planned.
The Empire State Building was lucky in the sense that it started construction at the beginning of the Great Depression. Good workers and were plentiful and relatively cheap. They had incentives to work hard, as there were plenty of experienced people without work who were willing to take their place if they slacked off. Materials were plentiful as the demand was low. The project also benefited from good weather – the winter of 1930-1931 was much warmer than average. In addition to benefiting from good fortune, the project also did several things right. Each floor had the same design – this allowed a learning phenomenon as it created a vertical assembly line. It’s likely that project management was familiar with Henry Ford’s automobile assembly line concept and turned this concept on its side. With each additional floor, the workers got better and faster at putting constructing each new level, saving time and money. The approach used was ahead of its time in that it incorporated lean concepts and just in time delivery of materials. The management team worked well together – their strengths complemented each other and helped keep the project on schedule. It was a privately-funded project – public projects often have paperwork that commercial ventures do not. Cutting out red tape can save time and money. Also, the project’s design provided pre-cut limestone blocks and prefabricated metals that were ready to install, which saved the time of having to assemble raw materials on site. Careful thought was taken to make the design robust, which is a type of risk mitigation. For example, only those marbles that were known to be widely available were chosen for use in the project.
Projects that do not experience cost growth, schedule delays, and meet requirements are relatively rare. Part of this can be due to luck, but managing projects well, working to achieve realistic efficiencies, mitigating risk, are all things that any project manager can do to help increase the odds of success.