Megaprojects Should Focus on Sustainability – interview with Virginia A. Greiman

Interview with Virginia A. Greiman, Professor of Megaprojects and Planning at Boston University, conducted by Szymon Pawłowski

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You played a very important role in managing of Boston’s Big Dig megaproject. Could you describe this project for Polish people interested in project management?

The Big Dig was the largest project in the United States, it was 15 billion dollars upon completion, although originally estimated at 2.5 billion. And the primary reason for the growth was the fact that design development had not evolved until later on in the project. The Big Dig was a concept that was originated by 2 designers in the Massachusetts State Transportation Authority who had a vision about the future of Boston. In the 1950s when the interstate system was being funded in Massachusetts by the federal government they were funding 90 percent of our state highway projects. Unfortunately, when the interstate reached Boston it went above ground, because we did not have the technology in the 1950s to put highways underground through an inner city.

So consequently, from the 1950s till the mid-1980s we had this viaduct cutting this city in two, and it did not provide any access to the waterfront. It was called the ugly green monster and it was constantly congested on a daily basis for traffic moved very slowly, sometimes taking up two hours to get through the city. In the 1980s when this vision was realized, the idea of putting the viaduct underground, there were many meetings that were held with the stakeholders to discuss how the city would change. And it took a long time to get the funding. So it was from about 1975 until about the late 1980s before the first funding was committed through the federal government. At that point the federal government was still funding some highway projects at 80 or 90 percent. But it was not clear at that point how much they would fund this project. So the project visionaries worked on their plan, including an extensive environmental study, and around 1988 the initial funding was approved.

The construction actually did not begin on the project until about 1992. So it was almost twenty years in the planning from the concept to the actual beginning of construction. When construction began there was concern about the impact on the city, so the business community became very active and actually became a strong supporter and ally of the project. Without the support of the small business community, I am not sure if the project would have ever been realized. So between the support of the residents of the city and the business community, our own legislature and the federal government the project began.

The BIG DIG was very complex also in terms of technology. What were the main technological challenges you faced?

The project was a first of its kind because we had never built the project through an inner city in Boston. Highway projects were always well removed from cities. And the fact that Boston was a city built off of the colonial shoreline on filled land and not consolidated soil made it technologically very complex. The tides moved in an out of the city and consequently, when we were excavating it impacted the movement of the buildings. This was also a project that was very new in terms of the various technologies that we used. Never before had ground freezing been used on such an extensive basis, nor have we used slurry wall construction to such an extent. In addition we were building in very congested areas within feet of very large buildings including Gillette World headquarters and The Federal Reserve. The concern was that if business was disrupted, either The Federal Reserve or Gillette World headquarters or the UnitedStates Post Office or AMTRAK, our major train which runs from Boston all the way to Washington DC, the damages could be very severe. So we had to work with insurance companies and reinsurers in London, particularly Lloyds of London, who assisted us in developing a program which became known as the world’s largest wrap-up insurance program.

It originally was to be a one billion dollars insurance program, but due to good planning and a program that returned premiums based on a low-loss ratio, the ultimate insurance program was reduced to about 600 million dollars. Lloyds of London in about 2002 declared it the most successful insurance program they had ever been involved with. The reason for that was that safety was always the first priority of the project. Safety and risk management really led the project and that meant every single incident had to be reported and studied for its root cause. When the root cause of the accident was determined, we would then adapt processes and procedures.

So, as we can see, the BIG DIG was a multidimensional project and it surely involved many parties. Could you tell us how the BIG DIG was organized and managed?

The BIG DIG was a public-private endeavor, although it was 100 percent publicly funded, the program manager was the joint venture consisting of Bechtel/Parsons Brinckerhoff. The construction was led by Bechtel – San Francisco Corporation, and the engineering was led by Parsons Brinckerhoff, actually a Massachusetts design firm. Both of these firms were giants in their fields. Bechtel having worked on Hoover Dam and the Hong Kong airport and numerous other large projects, and Parsons Brinckerhoff having worked on the New York Electric Subway System, were both very prominent in their fields. However they also acknowledged the challenges of this project, things that they have never done before. The project success rate in terms of safety and health was quite extraordinary, except for the very sad death of a pedestrian at the very end of the project. This was due in part, in accordance with The National Transportation Safety Board report, due to a lack of knowledge in the industry about epoxy when it is being used on tunnel roofs. The overall safety record of the project however was extremely well regarded and recognized by many awards, both within and outside of the insurance industry. There were also many construction recognitions, particularly for the complex new bridge that was built which was a state of the art, cable stay, asymmetrical, concrete-and-steel bridge. The community was very involved in the project throughout its long life. We had stakeholder committees that represented the project that reported to us and shared information with us.

Let’s stop for the moment on project’s stakeholders, their concerns and the way you managed their expectations and engaged them.

To manage our stakeholders on the BIG DIG we spent a lot of time identifying our stakeholders, understanding what their needs were, what their concerns were and developing stakeholder groups that would hold weekly meetings in the communities, with the businesses and then they would report back to us their concerns. We would appoint representatives for each of our stakeholder groups. We had a stakeholder environmental group; we had a stakeholder community group for the residents that was called the North End Pilot Project, because most of the residents lived in the North End. And then we had a business community group and their concerns were primarily about access to businesses, the ability to keep businesses going during the very key years of construction.

Traffic was also a major concern, so we partnered with both our Boston police, our state police and our local fire departments. They assisted us in containing the traffic in addressing local concerns of the citizens, so that everybody could go about their business despite this major project taking place within feet of their buildings and within feet of their residences. Without this constant communication I believe the project would never have continued. But it was so important to have the stakeholders as our friends and our allies and as participants in the project. 

We also in about 2000 established regular meetings that were open to the public on the financial condition of the project. This included presentation of budgets. Every month we presented a Project Management Monthly which included where we were in the project in terms of our financing and in terms of our cost and schedule. And it also included the look at the future, the forecast of the project through completion. We would present our critical exposures – areas where we felt costs were rising and explained why – we talked about risks and our risk management program and they had an opportunity to ask questions. For the first year or so of these open meetings the room was always filled, sometimes with press, sometimes with local citizens, sometimes with the visitors to the project. After that year we noticed the meetings got smaller and smaller, and the reason for that was they felt that the project was very transparent and that they were getting the information they needed, we were posting it online. And it was a very important part of the project to have an open, transparent, sharing process, so we could learn from our stakeholders and our stakeholders could learn from us.

So, now we know more about probably the biggest project you took part in. Now I would like to switch into more general, theoretical subjects. So, what is so special in megaprojects that make us distinguish them from projects, ordinary project management?

Yes, that’s an excellent question. Project management has been around for a long time, PMI has been establishing standards since the 1970s. But program management is still in the very early days. PMI and other project management organizations have standards for programs, but they are not very well understood. The program management standard rather than being described in terms of processes and procedures is described in terms of domains. Programs are much larger of course than an individual project, they can encompass multiple projects. You never want a program unless you can prove to your sponsors that the program will add value. So if you have more than one project and you think, centralizing your management and having uniform standards for all your project and uniform processes and procedures is beneficial, then you should establish a program. Almost every megaproject I have been involved with, whether at home, whether in the United States or around the world, has had a program manager as well as multiple project managers.

On the BIG DIG, our program manager was our joint venture and it was managed primarily by Bechtel. Bechtel Corporation was very experienced in program management so it meant we needed to focus on what I call mini-programs, integrated, centralized programs. These miniprograms included stakeholder management and engagement, governance, alignment of the program with the sponsor’s intent and, most important, it included a very detailed cost-benefit analysis. And that is what distinguishes programs because programs focus on sustainability – the ability to deliver the benefits promised but also to seek out new opportunities as the program progresses. So, for example at the BIG DIG, new opportunities included conservation – developing a home for the shellfish population in New England to protect them. It included building an island in the middle of Boston harbor, where people can spend time enjoying nature and wildlife. Much of the dirt that was excavated form the BIG DIG ultimately was taken and deposited in this island. So we had to be very innovative and creative in finding ways to benefit the local community. And that included training local labour, supporting minority and women owned businesses, and building institutions, building better government agencies based on the knowledge we were gathering from this mammoth project.

Do you think that the knowledge that we have now as well as standards such as the PMBOK® Guide and The Standard for Program Management are enough for managing megaprojects or should we try to build new domains of knowledge for megaprojects and develop some standards for managing them or is it maybe too early for this? What is your opinion about the state of the knowledge about megaproject management?

I am often asked about the difference between projects and megaprojects and when I explain the standards for program and project management people begin to understand there is a difference. But in terms of megaprojects they are all unique and they have to be studied in context. So what applies to one megaproject may not apply to another. The standards we have for project management, program management and portfolio management are all used on megaprojects. So we draw upon different standards and different methodologies, we even incorporate elements of improvisation and elements of agile project management, because much of what you do in a megaproject is iterative.

You’re developing your project as it moves along, and the reason for that is you are constantly identifying new stakeholders and these stakeholders have different expectations. So as you develop new stakeholders as your program progresses, you have to be adaptive to their needs. 

Your question is very good about whether megaprojects need their own standards. I think we do need a better understanding of how megaprojects are structured and governed. And I think for those two areas, we certainly need new knowledge areas for megaprojects. Based on the new knowledge areas, we do need to develop standards that are more applicable to the changing needs, as we progress through the phases of a large scale program.

Do you plan to build a framework for managing megaprojects?

I am working on it, I have talked to PMI about it, and they are very interested. They are engaged now in learning about megaprojects also. And I expect in a couple of years we will have a clearer understanding on what is needed. And I think we need to keep the conversation going and engage those project managers and program managers that workon megaprojects and identify their needs.

For example, one unique aspect of megaprojects that is not talked about so much in project or even program management is the fact that you have multiple governance structures. So much of the work on megaprojects and much of the governance is bottom up, because that’s where your experts are. And it is very difficult to have a top-down approach on megaprojects, because those at the top don’t often have the experience to know what should be implemented. So the decision-making and authority is often delegated downward and horizontally. So you could have as many as two or three boards of directors involved in the megaproject. For example, on the BIG DIG we had a joint-venture board of control, and at the sponsor level we had oversight by the federal government and a board of directors for the state government. So that’s three governing boards. And then for the program itself, the program management of the engineering and construction we had a fourth – a Program Management Office. It did not have a formal board but it was run like a PMO. 

So when you have multiple governing structures and then you have all of your standards, your processes and your procedures and your controls that’s another part of the architecture. So they are very complex structures, they are all different and I think it is hard to find one governing structure that would work for all megaprojects. So a more adaptive, flexible approach to megaprojects and an understanding of their complexities in terms of the people, the processes, the project methodologies and the integration that you need to develop more successful programs. This is not talked about too much in the literature.

And how does it look in terms of competencies of people? What special competencies should managers have that are managing megaprojects? Are the competencies described in PMBOK and The Standard for Program Management enough? What skills are needed to manage megaprojects?

That’s a good question. Project managers are trained to manage results. And they’re trained to understand the tools and techniques necessary to monitor these results. Whereas program managers I would classify more as transformative, or as change agents and they need very different skills. If you would contrast managers and leaders I would say leadership is needed for programs whereas managers are needed for projects. And characteristics of leaders to manage large scale megaprojects would include an ability to manage change, an ability to manage transformation. 

In other words, understanding how one creates opportunities from megaprojects, not just adapting what you are handed, but looking for opportunities that will arise throughout the life of your megaproject and understanding how to use these opportunities for the betterment of the megaproject and the communities and sponsors that are involved in megaprojects. 

You also have to be a motivator, you have to understand the importance of incentives and recognition. You have to be able to work in a political environment, since many of these megaprojects are very public, so I think good political skills and understanding how to manage changing political environments and governmental environments is a very key aspect.

You have said during your session at the PMI PC Congress that for megaprojects sustainability is much more important than the Iron Triangle of project management – scope, time, and budget. Why is sustainability so important and what about the Iron Triangle – should managers of megaprojects forget about the Iron Triangle?

That’s a good question. Program managers have to be very reliant on their project managers. Their project managers should be focused on the Iron Triangle. The program manager really does not have the time to get into the nuts and bolts of schedule management or the day-to-day operations in the projects.

They have to look at the big picture. And in the end what’s important is what have you delivered, and is what you have delivered sustainable. In other words, megaprojects take years to build, 10-20 years, their benefits may last as long as 60-70 years. Not just the infrastructure they build, but also the opportunities that they create for the people and the communities in the cities where these projects are being built. And opportunities would include training, training labour, training managers, but also building the institutions, the governmental institutions, the private companies sharing lessons learned for the future, so that the projects of the future will be that much better off. 

There are other benefits, such as social benefits, in the developing world you want to deliver to provide for a better community or a better city. So the focus on sustainability is really by the program manager to overall enhance the program. It is not that you don’t focus on Iron Triangle but your focus on that is really more at the very high level. And you need to knowof course that all your projects within your program are staying on time and budget but, again, in measuring success of megaprojects you are not just looking at cost and schedule but you are looking at the value of what you are delivering, and that value can be far greater than any cost or schedule. 

As we’ve seen in California with the San Francisco Bay Bridge, it was 5 billion dollars over budget, ten years late, but they built a bridge to last 150 years, that’s double the life of a normal bridge. If we were to calculate the benefits of that plus the benefits to the local communities, it would far exceed even this additional cost.

I would also like to ask about the concept you’ve introduced during PMO Symposium 2013 and here in Warsaw at PMI Poland Chapter Congress – the concept of Integrated Project Organization. What is it and what is the main value of an IPO?

Integration is a Knowledge Area that PMI has incorporated in its Body of Knowledge (PMBOK). It is a very important aspect of project management. But it is defined to just include unifying and harmonizing processes and procedures. I believe integration in megaprojects is much broader than just processes and procedures. We are looking at integrating the people in the megaproject, developing better partnerships between the public and private sector. We are looking at integrating goals and expectations of our multiple shareholders. We are looking to integrate and develop smaller programs within the megaproject that will provide overall better economies of scale, better returns on investment. 

So we are not just integrating our claims and our changes, but we’re integrating every aspect of the project that would be beneficial. That means an Integrated Project Organization where the people become one entity rather than separate silos of companies. We are integrating methodologies, we are combining methodologies, and we are integrating our risk programs so that we don’t have 135 risk management programs for every project, but we have one risk management program for the entire megaproject. Quality needs to be integrated as well as safety and health. It is very important that there is this harmonization of all these disciplines in the megaproject if we want to build a sustainable and lasting megaproject for the future.

The interview was conducted by Szymon Pawłowski during 9th International PMI Poland Chapter Congress, November 24th-25th, 2014 in Warsaw.