Page 208 - Global Project Management Handbook

MANAGING RISKS AND UNCERTAINTY IN MAJOR PROJECTS 9-13

The level of development, stability, and specific content of regulatory regimes vary
enormously from one country to the next. In countries with very weak regulatory
regimes, anchoring the project and stabilizing the regulatory context may require actions
that are very proactive and that would seem exceptional in other countries. Even in coun-
tries with highly developed regulatory regimes and where the rule of law is well estab-
lished, anchoring of the project and stabilization of the context often require modification
of existing laws and regulations or the creation of new laws and regulations. Laws and
regulations provide guarantees for certain rights and privileges or can place limits on the
future actions of certain parties, including the government itself. In countries where the
rule of law is well established, they are enforceable in the courts.
Beyond their strictly legal implications, supporting legislation, laws, and regulations
provide a great deal of legitimacy to projects. Once the supporting laws have been passed
and the regulations have been put into place, stakeholders are much less likely to contest
the project. By passing legislation, the government publicly commits itself to supporting
the project and is more likely to come to the project’s rescue in case of severe unforeseen
difficulty. There are many examples of governments stepping up to save projects from
collapse. This is more likely if the government’s support for the project has been clearly
signaled at some earlier stage and if the project provides significant public service or eco-
nomic or political benefit. Anchoring to the institutional framework, therefore, has the
effect of reducing the likelihood of unforeseen risk events but also increases the project’s
legitimacy and the likelihood of its receiving support if faced with unforeseen difficulties.
Sponsors that venture into areas previously reserved for government monopolies can
evoke such a wide variety of issues over such a long period of time that it is not possible
to identify all the potential stakeholders and their actions that could pose threats to the
project. Successful projects show exceptional stakeholder management. However, the
management of unknown stakeholders and their unforeseen actions requires measures in
addition to good stakeholder management. Instilling legitimacy and momentum to the
complex system that is the project can render it less likely to be attached and can increase
its chances of survival.
Anchoring the project into the institutional framework confers considerable legitimacy.
An effective communication plan also will be an essential ingredient in building the proj-
ect’s legitimacy and in creating momentum. Effective sponsors often go beyond these
actions by deploying proactive cooptation strategies with potential opponents and/or
opinion leaders. Early in the life of the project, before stakeholders have taken a public
position with respect to the project, it is often possible to identify stakeholders that are

only partially antagonistic to the project and are potential opinion leaders. If a group of
affected parties or a pressure group is brought into the project development and approval
process and eventually supports the project, their presence and actions confer significant
legitimacy to the project. This not only virtually removes the possibility of opposition
from these groups but also provides sufficient legitimacy and momentum to reduce the
likelihood of other groups being mobilized in opposition to the project.

CREATING A PROJECT CONCEPT AND ORGANIZATION
TO ENHANCE GOVERNABILTY

Creating a project organization that will be able to face unforeseen difficulties and capture
yet unknown opportunities can be likened to building a team to do the same. In building
the team, the sponsor must choose and motivate the members, establish the network of
interdependent relationships among them, and allocate roles, responsibilities, and risks.
The team will need to remain cohesive and to attack emergent issues as problems to be
solved. To solve the future problems, they will need to have the incentive and motivation