Page 199 - Global Project Management Handbook

MANAGING RISKS AND UNCERTAINTY IN MAJOR PROJECTS 9-5

the interdependent involvement of more players in project design and execution, often at
a distance. In many cases technology facilitates the adoption of alternate modes of project
development and delivery but is not a major driving force.

Experimentation and Innovation

Concessions and project finance are not new ideas. However, they had not been in wide-
spread use prior to the 1980s. Few organizations, therefore, had significant expertise in
these types of projects. This lack of expertise, combined with the ideological conviction
of the natural superiority of private over public organizations, led to private firms,
investors, and financial institutions assuming considerable risk and to spectacular losses
on projects that failed.
This period of relatively intense experimentation, with its collection of both very suc-
cessful and very unsuccessful projects, facilitated leaning by individual organizations and
the development of their distinctive competencies. It also facilitated institutional learning
as organizational fields became better structured and as regulatory regimes became more
refined. Alternative modes of project development and delivery, such as BOT, conces-
sions, and project finance, have become part of the repertoire of available alternatives for
those initiating major projects and for those seeking to participate in them.

UNDERSTANDING THE DYNAMICS OF MAJOR PROJECTS

This second section presents a framework that describes the organization of major projects
in this new environment. This framework is based on a reexamination and a further elabo-
ration of the results of a major research program, the International Research Program on
the Management of Large Engineering and Construction Projects (IMEC) (Miller and
Lessard, 2000; Miller and Hobbs, 2002) and on more recent investigations by the authors.
The aim of the IMEC was to better understand the dynamic patterns that were emerg-
ing in the ways projects are structured and managed and in the approaches that are
associated with successful or less successful projects. The program produced and ana-
lyzed 60 case studies of large engineering projects in both developed and developing

countries on four continents that were using an approach based on grounded theorizing.
The case studies documented the evolutionary dynamics of projects from the earliest
phase of inception through to commissioning and the start of operations. The average
duration of these projects was 10 years, of which 6 to 7 years were devoted to front-end
development phases and only 3 to 4 years to design and construction phases. Figure 9.2
sketches an archetypal representation of the dynamics of projects over the main periods
of their life cycle.

The Beginning of the Project: The Search Period
Search refers to the original efforts to match needs, solutions, and opportunities. A pri-
vate or public owner may signal interest in or receptivity to proposals for a project either
by a policy statement or a call for proposals. Often the original show of interest is the
result of a long preproject process of discussion and lobbying by different interest
groups. Private sponsors/developers also initiate proposals for projects in their search for
project opportunities.
Projects go through a long period during which both the problem and some elements
of its solution are sorted out. The process is a search for solutions to poorly defined