The first steam powered railway in Australia opened by the Melbourne and Hobson’s Bay Railway Company in 1854, running 2.5 miles between Flinders St Station (pictured) and Melbourne’s port at Sandridge.
The company had been formed in August 1852. It was initially capitalized at £100,000; issuing 2000 shares £50 each. £50 is the equivalent in purchasing power to about £8,127.82 today, or $15,000 today. The railway was an instant financial success, as its fares were high and the route popular. The journey took about 10 minutes with two trains running every half hour.
The answer to this question depends on how you perceive success and failure. Our latest article published in the May PM World Journal offers several possible alternatives.
However, reflecting on data in the article shows a worrying trend:
Using traditional measures, 80% of organizations do appear to have project failure rates averaging around 80%, but this is not the perception of most managers in those organizations.
Organizations that manage projects successfully achieve a significant cost-benefit over those that do not. Poor project delivery is directly linked to higher project costs.
Therefore, the long sought after answer to Cobb’s Paradox can at last be unveiled:
If 75% of the managers in poorly performing organizations believe their projects are being delivered successfully, they have no reason to invest in improving project delivery capability. Outsiders may see project failure and know how to improve the organization’s systems to prevent future failures, but the majority of the managers in the organization cannot see, or will not see, there is a problem that needs fixing. The answer to Cobb’s paradox: ‘We know why projects fail, we know how to prevent their failure — so why do they still fail?’ is the responsible managers do not perceive their projects as failing and therefore will not invest in solving a problem they cannot, or will not, acknowledge. Changing this flawed perception is a major governance challenge.
Sometimes libraries need a bit of reorganization! The Mosaic Project Management Knowledge Index (PMKI) is an indexed and categorized library of 100s of papers and articles focused on the broad scope of managing projects and programs.
As part of our regular grooming process the following pages have been reorganized, tidied, and updated:
Corporate/Organizational Governance: https://mosaicprojects.com.au/PMKI-ORG-005.php This subject covers the creation and implementation of the organizational objectives, policies, practices and systems that are responsible for ensuring organizational resources are utilized effectively and the work of the organization is aligned with its strategy and objectives.
Ethics and Culture in Organizations: https://mosaicprojects.com.au/PMKI-ORG-010.php This subject looks at the at the central role of ethics, culture and the associated outcomes such as CSR, sustainability, and the ‘triple bottom line’, in successful organizations.
Dispute Management: https://mosaicprojects.com.au/PMKI-ITC-014.php Disputes in the construction and engineering industries are common and often involve large amount so money. This page looks at contract dispute management from the perspective that preventing disputes is better than resolving disputes. But when a dispute arises you need to know how to respond effectively.
Almost all of the information in the PMKI is available for use under a creative commons license. See its full scope at: https://mosaicprojects.com.au/PMKI.php
Can a project be years late, £ Billions over budget, and a success? It appears the answer to this question depends on your perspective.
In a recent post looking at project success, we identified a significant anomaly between the percentage of projects classed as failing and the perception of executives. In round terms some 70% of projects are classified as failing, but over 70% of executives think their organization deliver projects successfully. You can read the updated version of this post at: Do 80% of organizations average a project failure rate of 80%?
A number people providing feedback on the original post suggested this anomaly could be caused by different perspectives of project success. This concept has been identified by many people over the years as the difference between project management success (on time and on budget), verses project success (the delivery of value to stakeholders). These different types of project success are briefly discussed in Achieving Real Project Success.
Measuring project management success.
However, the concept of project management success, typically measured as delivering the project on time and on budget, raises its own set of challenges. Consider the following:
Two different organizations own the same commercial software, and decide to implement the latest upgrade, essentially two identical projects to deliver similar benefits to two separate organizations.
Organization A estimates their project will cost $110,000 and the work is approved.
Organization B estimates their project will cost $80,000 and the work is approved.
Both projects complete the work successfully and on time. The final project costs are compiled and the close-out reports completed:
Organization A has a final cost of $100,000 – $10,000 under budget, and the project is declared a success!
Organization B has a final cost of $90,000 – $10,000 over budget, and the project is declared a failure!
But Organization B has achieved the organizational benefits of the upgrade for $10,000 less than Organization A – which project was really successful?
The above example is simplistic but clearly shows the need for better processes to define project success and failure. Comparing the estimated time and cost at the start with the achieved outcomes can be very misleading. On time and on budget may be valid measures for a contractor delivering a project under a commercial contract that defines a fixed time and cost for completion, but for everyone else the question of success is more nuanced.
For example, consider the Crossrail Project in London, initiated in 2008 to deliver the new Elizabeth Line, it is years late and £Billions over budget. But since its partial opening in May 2022, more than 100 million journeys have been made on the Elizabeth Line, currently around 600,000 journeys are made every day. This patronage is above forecast levels and the project is on track to break even by the end of the 2023/24 financial year. Even the British Tabloid press are declaring the Elizabeth Line a success despite the final upgrade to achieve 100% of the planned service frequencies not happening until 21st May 2023 (for our thoughts on Crossrail over the years see: https://mosaicprojects.com.au/PMKI-ITC-012.php#Crossrail).
The May 2023 upgrade will mark the successful completion of the Crossrail project and its final transition to operations. This is some 4 ½ years after the original planned opening date in December 2018 and £4+ Billion over budget – so who gets to declare it a success and what is the basis for measuring this? When we looked at this question in Success and Stakeholders our conclusion was success is gifted to you by your stakeholders, you have to earn the gift by delivering the project, but there is no way of knowing for sure if it will be considered successful. The Elizabeth Line has achieved the accolade of successful from its stakeholders, but this is hardly a scientific measure, or an effective KPI for general use. Which poses the question how do you realistically measure project success? Asking the question is easy, finding a generally applicable answer is not – any ideas?? For more on defining project success see: https://mosaicprojects.com.au/PMKI-ORG-055.php#Success
This post is not intended to provide precise numbers, rather to highlight an intriguing anomaly that could benefit from some structured research. Over many years, and many different reports, based on different survey methods, we regularly see the following data presented:
Far more projects fail than succeed, the ratio is typically around 30% success 70% fail.
There are some organizations that routinely achieve project success, these are slowly increasing as an overall percentage and currently sit at around 20% of the organizations that ‘do projects’.
The vast majority of executives surveyed think their organization manages its projects successfully. The percentage of executive with this view seems to sit comfortably above 80%.
But, unless there is a major distortion in one or more of the data sets, these data are mutually incompatible!
If 20% of organizations that ‘do projects’ get most of their projects delivered successfully, it means this group have to account for at least half of the 30% of successes, which pushes the ratio of fails for the rest of the organizations to 15:65 = 19% success vs 81% fails.
In round numbers 80% of the organizations doing projects, have a failure rate of around 80%.
But if more than 80% of executives feel their organizations deliver projects successfully this data suggests that some 60% of these executives are seriously misinformed. So, my question is why do some 75% of executives in the 80% of organizations that routinely fail to deliver projects successfully appear to believe the opposite? The answer to this question probably sits in the complex area of communication failures caused by organizational culture and governance issues, for more on this see: https://mosaicprojects.com.au/PMKI-ORG.php
This assessment also helps explain why so many organizations simply do not invest in systems to improve project delivery. There is no point in spending money to fix a problem the executives cannot acknowledge. So whereto from here??
The answer will not be easy. To quote from the 2018 PMI Pulse of the profession survey: “There is a powerful connection between effective project management and financial performance. Organizations that are ineffective with project management waste 21 times more money than those with the highest performing project management capabilities. But the good news is that by leveraging some proven practices, there is huge potential for organizations to course correct and enhance financial performance.” But it appears that while the people setting their organizations strategy, culture and governance systems may be aware of this, a large percentage do not believe it applies to them – their projects are managed appropriately, even if 80% of them fail.
Changing the culture to implement effective project governance and controls needs executive support! For more on the strategic management of projects and programs see: https://mosaicprojects.com.au/PMKI-ORG-015.php#Process1
Notes:
First, I am fully aware of the ‘Flaw of Averages’, and the resulting problems in the way the calculations in this post have been made. But in the absence of an integrated data set for proper statistical analysis, I believe the trends highlighted above are valid indicators of a problem. What is needed to test these indicators is a proper survey that contrasts executive opinions against project success rates across a large sample of organizations.
The second issue is the sample of executives surveyed. Most of the data I have seen comes from ‘opt-in’ surveys which is likely to bias the sample towards executives that consider projects important.
In our papers looking at early wagonways and railways, the Diolkos on the Isthmus of Corinth in Greece, was identified as probably the first purpose-built railway in the world (if you define a railway as a set of tracks that guide wheeled vehicles). This blog takes a close look at this fascinating construction project.
Unlike most other projects at the time of its construction, the Diolkos has three unique characteristics:
Its purpose was commercial – most other projects of its time were built for the purpose of either religious celebration, military necessity, or royal ego-trips.
The construction had to be completed before any value could be derived from the work. You either transported a ship across the Isthmus, or you did not!
There was no option for incremental development. There may well have been earlier trackways for moving goods from shore to shore using pack animals or wagons, and using logs as wooden rollers to move ships was feasible but it is a big jump from these technologies to a ship transporter system.
These characteristics make the decision of the Corinthians who commissioned and constructed the project the first commercial project sponsors I have been able to identify. And, the 650+ years of operation of the Diolkos suggest they got their decision correct.
The Diolkos (pass via machinery) was a paved trackway, variously measured to be between 6 to 8.5 km long, that enabled vessels to be moved overland across the Isthmus of Corinth. It was built to speed up the transfer of goods between the Gulf of Corinth and the Saronic Gulf, although, in times of war, it may also been used as a means of speeding up naval campaigns. The alternative way to reach Athens, and other ports in the Saronic Gulf, from the Gulf of Corinth was for ships to take a nearly 700-kilometer-long detour around the Peloponnese. A journey that was not only long but dangerous. Gale-force winds around Cape Matapan and Cape Maleas often troubled sailors. Whereas, both the Gulf of Corinth and the Saronic Gulf were relatively calm and the narrow strip of land, the Isthmus of Corinth, separating both the water bodies was only 6.4 km wide at its narrowest.
The basic mode of operation for the Diolkos was for a cargo vessel to be unloaded at one end and its cargo carried separately on wagons to the other side of the isthmus, then the ship was loaded onto the Diolkos, and pulled to the other side where it was refloated, then reloaded.
Enough of the trackway remains to show how the system operated. Eastward-bound ships would arrive at the northwestern end of the Diolkos at the current location of Poseidonia in Corinth where there was a stone ramp. They were then pulled up the ramps onto a stout wooden frame, or sledge. Once they were on dry land, the ships were then stripped of their masts and other movables to make them as light as possible. The massive vessels then were turned by winches to line them up with the Diolkos. Next, they would be pulled up another stone ramp to get them onto the wheeled undercarriage. These had large wheels along both sides spaced to fit into the deep grooves cut into the stones of the trackway, which ensured the undercarriage and its burden would stay firmly on track all the way to the other side of the isthmus. Even though the gradient of the road only went up to approximately three percent, it would still have been a feat of engineering and brute strength to move seagoing vessels overland in this way. This process appears to have been improved to some extent in the early 4th century BCE, when it seems that a wooden lifting machine was installed that allowed easier placement of ships on the standing wheeled vehicle.
Excavation and restoration works show us the paving was made of limestone blocks with carved grooves at an axial distance of about 1.50m for the guidance of the wooden wheeled vehicle on which the ships were transported. Engraved letters on some of the paving stones belong to the oldest local alphabet and date the works to the beginning of the 6th century BCE.
At each end of the route, the track continues down to a pier and slipway at the water’s edge.
At the western end, a section of an inclined cobbled pier measuring about 10.00 x 8.00m has been excavated.
In summary, it seems a combination of human and animal power plus great technological know-how allowed the Diolkos to function for over 650 years, from around 600 BCE until the middle of the first century CE. A successful project by any measure!
It also seems the Diolkos served a very similar purpose to the early wagonways and railways developed in England and Europe in the 16th century CE – the efficient movement of goods. This aspect is discussed in The First Railway Projects, you can download this paper and others on early transport projects from: https://mosaicprojects.com.au/PMKI-ZSY-005.php#Process2
But there’s more
The use of groves carved (or worn) into rock to help guide wagons seems to be much older than the Diolkos.
The starting point of this development was wooden sledges that are known to have been used by communities living by hunting and fishing in northern Europe, on the fringes of the Arctic during the late Mesolithic Period from 7000 BCE or earlier.
During the Neolithic, the domestication of cattle, and more particularly the discovery that a castrated bull becomes the docile but very powerful ox, meant that humans could transport heavier loads. This is done at first on larger sledges, which slither adequately over the dry grass of the steppes of southern Russia and on the parched earth of Mesopotamia. In both regions ox-drawn sledges are in use by the 4th millennium BCE. Then from around 3000 BCE the development of wheeled wagons seems to have occurred and spread quickly (or wheeled wagons were developed in multiple locations). These vehicles were 4-wheeled and pulled by people or animals, the image is a depiction of an onager-drawn wagon on the Sumerian “War” panel of the Standard of Ur (c. 2500 BCE).
These early wagons had fixed axles steering was achieved by physical force applied to the side of the wagon (2-wheeled carts and chariots were developed quite a bit later and were linked to the domestication of the horse). As the use of heavy wagons became more commonplace, it seems that where a relatively soft, flat bedrock was close to the surface, wheel ruts started to be worn into the surface, and people found the ruts made guiding their cart easier, the wheels just followed in the groves. From this starting point, it does not need a huge leap of imagination for someone to realize that by carving a starting point into the rock, subsequent use would develop deeper grooves though wear, making the job of guiding a cart progressively easier. This type of ‘cart rut’, can be found in Malta, Greece, Italy, Sicily, Sardinia, Switzerland, Spain, Cyrenaica, Portugal, Azerbaijan and France.
As with most examples, the age and purpose of the Maltese tracks is uncertain with estimates of their origins ranging from c.700 BCE, but with several examples pointing to a Temple Period date c. 3800-2500 BCE. The underlying rock in Malta is weak and when it’s wet it loses about 80 percent of its strength so whether these tracks were carved, or worn into the bedrock, or started by carving then worn deeper, is open to question.
Misrah Ghar il-Kbir (Clapham Junction) – Malta.
These earlier examples suggests the convenience of having guides to help keep carts on the desired track would have been well understood by the time the Diolkos was built. The builders of the Diolkos simply expanded on the concept by making their own ‘bedrock’ by laying paving stones.
The use of fixed (non-steering) axles continues through to the present time. The mine carts of the 13th century, the ‘chaldrons’ used on the NE England wagonways in the 18th century to move coal to the wharfs, through to modern railway freight cars all use fixed axles guided by groves or rails. For more on the history of railways see the papers at: https://mosaicprojects.com.au/PMKI-ZSY-005.php#Process2.
The use of a steerable front axle on wagons is a much later development, dependent on the availability of iron to efficiently manage the high loads at the pivot pin. This was achieved in about 500 B.C. (although some commentators put the date as early as 1500 B.C.) with the production of an axle capable of swiveling about a vertical axis. Such vehicles can be readily detected in accurate drawings because the front wheels had to be small enough in diameter to pass under the floor of the vehicle. The technology did not spread rapidly. There were only a few steerable wagons in fourteenth-century England, and they were not widespread until the seventeenth century.
Over the last couple of weeks, we have been updating the estimating pages on our website, partly in response to the #NoEstimating idiocy.
There is no way an organization that intends to survive will undertake future work without an idea of the required resources, time, and cost needed to achieve the objective and an understanding of the anticipated benefits – this is an elementary aspect of governance. This requires estimating! BUT there are two distinctly different approaches to estimating software development and maintenance:
1. Where the objective is to maintain and enhance an existing capability the estimate is part of the forward budgeting cycle and focuses on the size of the team needed to keep the system functioning appropriately. Management’s objective is to create a stable team that ‘owns’ the application. Methodologies such as Scrum and Kanban work well, and the validity of the estimate is measured by metrics such as trends in the size of the backlog. For more on this download De-Projectizing IT Maintenance from: https://mosaicprojects.com.au/PMKI-ITC-040.php#Process1
2. Where the objective is to create a new capability, project management cuts in. Projects need an approved scope and budget which requires an estimate! The degree of detail in the estimate needs to be based on the level of detail in the scope documents. If the scope, or objectives, are only defined at the overall level, there’s no point in trying to second guess future developments and create an artificially detailed estimate. But, with appropriate data high level estimates can be remarkably useful. Then, once the project is approved, normal PM processes cut in and work well. Some of the sources of useful benchmarking data are included in our update estimating software list at: https://mosaicprojects.com.au/PMKI-SCH-030.php#Cost
The #NoEstimating fallacies include:
The fantasy that software is ‘different’ – its not! All projects have a degree of uncertainty which creates risk. Some classes of project may be less certain than others, but using reliable benchmarking data will tell you what the risks and the range of outcomes are likely to be.
Estimates should be accurate – this is simply WRONG (but is a widely held myth in the wider management and general community)! Every estimate of a future outcome will be incorrect to some degree. The purpose of the estimate is to document what you thought should occur which provides a baseline for comparing with what is actually occurring. This comparison highlights the difference (variance) between the planned and actual to create management information. This information is invaluable for directing attention towards understanding why the variance is occurring and adjusting future management actions (or budget allowances) to optimize outcomes.
Conclusion
The fundamental flaw in #NoEstimating is its idiotic assumption that an organization that commits funding and resources to doing something without any concept of how long its is going to take, or what it will cost will survive. Good governance requires the organizational leadership to manage the organization’s assets for the benefit of the organization’s stakeholders. This does not preclude risk taking (in many industries risk taking is essential). But effective risk taking requires a framework to determine when a current objective is no longer viable so the work can be closed down, and the resources redeployed to more beneficial objectives. For more on portfolio management and governance see: https://mosaicprojects.com.au/PMKI-ORG.php
In summary #NoEstimating is stupid, but trying to produce a fully detailed estimate based on limited information is nearly as bad. Prudent estimating requires a balance between what is known about the project at the time, a proper assessment of risk, and the effective use of historical benchmarking data to produce a usable estimate which can be improved and updated as better information becomes available. For more on cost estimating see: https://mosaicprojects.com.au/PMKI-PBK-025.php#Process1
The idea of incentivizing a contractor to achieve the objectives specified in a contract are far from new. One example of this is the glazing of the Great East Window of York Minster in the early 15th century.
The cathedral was built between 1220 and 1472 on the site of an older Saxon cathedral. Its Great East Window was glazed between 1405 and 1408. The window is the largest medieval stained-glass window in UK at a bit over 9m wide x 23m tall (larger than tennis court), containing over 300 glazed panels. It was one of the most ambitious windows ever to have been made in the Middle Ages. The design contains two biblical cycles, Creation and Revelation, the beginning and the end of all things. Beneath the heavenly realm at the head of the window, populated by angels, prophets, patriarchs, apostles, saints, and martyrs, there are three rows of 27 Old Testament scenes from the Creation to the death of Absalom. Below this, scenes from the Apocalypse appears, with a row of historical figures at the base of the window. The complex narratives that the window explores represented a true collaboration of teams of clergy and craftsmen, combining advanced liturgical knowledge with the glass-painters’ genius.
Walter Skirlaw, bishop of Durham between 1330 and 1406, has been recognized as the donor of the Great East Window. Its creation was the work of celebrated Coventry glazier John Thornton. Little is known of Thornton’s career, but he was presumably a master glazier of some renown when he was awarded this major work at York Minster. Skirlaw had served as bishop of Coventry so it is likely he was at least in part responsible for bringing Thornton to York.
Neither the size or location of Thornton’s York workshop is known, but the glazing contract formed between him and the Chapter at York reveals that he alone was responsible for the design of the window and much of the key painted details. Analysis of the painting styles shows that there were several glass-painters at work on the window. Nonetheless, the window is characterized by the consistently high standard of painting exhibited across the whole window, demonstrating that Thornton selected his collaborators with great discernment and applied strict quality control.
The contract between Thornton and the Church to glaze the window, has a base price of £46 plus an incentive fee of £10 payable if the work was finished within 3 years. The project was completed within the allowed time and Thornton received his full payment of £56 which is the equivalent of £375,000.00 in today’s money (US$450,000+).
The records held by York Minster show several ‘modern’ aspects of this contract:
The project was the equivalent of a ‘design and construct’ contract
Incentive fee payments were in use in the 15th century
Quality was both important and controlled.
We don’t know how much interaction there was between the clergy and the glaziers, but it is likely for such an important commission, there were regular reviews of both the detail design before work on a panel started, and the completed panel before installation.
On a closing note, Thornton’s fee contrasts significantly with the £11 million recently paid to the York Glaziers Trust to restore and clean the window.
Our latest article, CSR, TBL, and Too Many Other Acronyms looks at the relationship between ESG, CSR, TBL and a range of other concepts that relate to the need for organizations to act in ways that are socially and environmentally sustainable.
The concepts are good for everyone and central to good governance, but does the alphabet soup of acronyms that are appearing help or hinder the achievement of good governance outcomes?
Over the years, we have written about the project and its value to Sydney, Australia, and the world on numerous occasions some of the key publications are:
These blogs and papers identify three overriding issues:
The project ran massively over time and over budget during construction.
To save costs the project was taken over by a government committee which redesigned the interior. Politics and cost cutting resulted in a very disappointing interior.
The building is an iconic success.
To rectify the internal shortcomings and revitalize the venue the NSW government committed to a $300 million, 10-year program of works in 2012. The improvements were to be carried out based on the venue’s Conservation Management Plan, to ensure the original design intent for the interiors created by Danish architect Jørn Utzon and completed by an Australian architectural team led by Peter Hall was respected.
The final major project in the NSW government’s ‘decade of renewal’ for the landmark, was the complete refurbishment of the concert hall. Following two and a half years of renovations (and $150 million), this venue opened on 20th July 2022. All remaining works are expected to be completed ahead of the year of celebrations in 2023 to commemorate the buildings 50th anniversary.
One can only wonder how much could have been saved if Jørn Utzon had been allowed to complete the project in the 1970s without political interference.
Pat Weaver
Lynda Bourne
Aavssitedev's Blog