Page 196 - Global Project Management Handbook

9-2 COMPETENCY FACTORS IN PROJECT MANAGEMENT

The global environment for large, complex projects has changed significantly in recent
years. The changes in context have produced important challenges and new approaches to
the development and delivery of major projects throughout the world. The roles of the
different players involved in the development and delivery of large projects have been
redefined during a period of intense experimentation and innovation. New development
strategies and delivery mechanisms have redefined and modified the distribution of risk
among project participants. The traditional risk management approaches and tools are
somewhat paradoxically more important than ever, whereas at the same time they are
showing their limits and the need to be supplemented with alternative strategies to cope
with uncertainty.
The first section of this chapter examines the nature of the forces behind the changing
environment and their impact on the management of major projects. The second section
of the chapter develops a framework for describing and analyzing the development and
delivery cycle of major projects in the new global context. The framework is focused on
the critical roles of the project sponsor/developer and the interaction with the institutional
context. The final sections examine the nature of risks in this context and the strategies
used to manage them.

THE NEW GLOBAL ENVIRONMENT FOR LARGE,
COMPLEX PROJECTS

Changes in the environment of large projects have been multifaceted and systemic. Since
the late 1980s and early 1990s, several forces have come into play. Over time, the inter-
actions among them have radically altered the way large, complex projects are managed.
In reality, the context of projects moved from institutional frameworks built on the
assumptions of rational management to ones based on shared governance (Miller and
Lessard, 2000).
As is always the case with systemic changes, there are many forces in play and many
interaction effects among them. The most evident manifestations of the changing envi-
ronment are globalization; the prominence of new models for project development and
delivery, such as design-built, build-operate-and-transfer (BOT), and concessions; a larger
role for private financing of public infrastructure; and more collaborative project struc-

tures. Many forces are at play to produce these more evident manifestations, each of
which, in turn, is among the forces participating in the systemic change. Several of these
forces are identified in Fig. 9.1 and are discussed below.

Ideological Shifts Favoring Privatization
Ideas are important if many people share them. Beginning with the era of Margaret
Thatcher and Ronald Reagan, emphasis was put on private competition, market
economies, reduced role of government, and privatization in the 1980s.
During the late 1980s and early 1990s, worldwide, most governments—national,
regional, and local—were very deeply in debt. Financial markets and international agen-
cies became more sensitive to the issue of public debt. Governments and publicly owned
organizations started searching for ways to finance public infrastructure without increas-
ing their debt load. A period of experimentation started with privatization as a significant
part of this trend. The search for new means of delivering new or revamped public infra-
structure with off-the-balance-sheet financing has had a very significant effect of the way
many major projects are delivered.