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Complexity Is Often the Culprit in Project Overruns, Delays

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Our long history and experience is that, in general, the failure rate for construction projects has remained high. Why haven't advances in project-management science, computer technology and communications been more effectively brought to bear in our business? What about the advertised beneficial impacts of 3D computer-aideddesign, computerized critical-path method schedules and building information modeling? Are today's engineers not as good as those who built yesterday's megaprojects—the Panama Canal, the Empire State Building or the Hoover Dam?

Owners, architects, engineers and contractors have been challenged to deliver capital projects on time and on budget because of their complexity and because of the inherent instability created by the contractual structure, which contains incentives and disincentives to proactively solve problems and seek to avoid blame.


In his 2007 book "The Black Swan," Nassim Nicholas Taleb recounts in detail the "modern" statistical approach to determining the likelihood of a rare or infrequent event. As he points out, we simply discount these events because they may not happen in a normal lifetime. However, when they do occur, they disrupt the business environment in such a way that all of the underlying assumptions used to develop the project plan and execution strategy are revised. Reactions to and effects of the event are disproportionate and transient. Normalcy may not be recovered quickly and the resulting secondary interactions of the event or events further confuse and distort matters.

Fundamental systems thinking calls for optimizing the overall system and its output, not the individual parts of the system. Optimization doesn't necessarily require optimizing all components.

Initial Optimism

The project team's reaction may be determined in part by the context of the particular project and by the perceived difficulty of achieving its original goals. At the beginning, team members are optimistic and believe that best practices in project management will minimize the chance of failure. They model projects in 3D CAD systems and schedule activities with critical-path management tools, creating an expectation of control and success that helps to "sell" the project.

But control of the project is tenuous at best and subject to independent action by contractors and other participants. Success isn't predictable or guaranteed in the real world of complex, changing and sporadic interactions and competing priorities.


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