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Dan Gardner is the coauthor of "How Big Things Get Done," a book that explores why so many big projects, from nuclear power plants to Olympic Games, go disastrously wrong and what the rare successes get right. Drawing on data from over 16,000 megaprojects, Gardner reveals the startling truth: Only 0.5% are delivered on time, on budget, and with the promised results.
Dan explains high-profile, cautionary tales like the Sydney Opera House, which soared 1,400% over budget, and the troubled California High-Speed Rail. He also spotlights the rare successes, like the Empire State Building and the Hoover Dam, to show what’s possible when projects are built on smart planning, strong leadership, and modular thinking.
Dan explains high-profile, cautionary tales like the Sydney Opera House, which soared 1,400% over budget, and the troubled California High-Speed Rail. He also spotlights the rare successes, like the Empire State Building and the Hoover Dam, to show what’s possible when projects are built on smart planning, strong leadership, and modular thinking.
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00:00This $80 million machine was the world's biggest tunnel digger until it got stuck beneath Seattle for over two years.
00:09And California's high-speed rail project promised to connect Los Angeles and San Francisco by 2020.
00:16But that never happened.
00:18They did not do proper planning before they began construction.
00:23And now the estimated cost for completing this thing is over $100 billion.
00:28These issues are common.
00:30In fact, less than 1% of all big projects stay on budget, on time, and deliver what they promise.
00:38So why do so many go off the rails?
00:41And what can we learn from the rare few that don't?
00:44Dan Gardner, the co-author of How Big Things Get Done, breaks it down.
00:50Every time a country is hosting the Olympics, they're a beginner, and beginners are terrible.
00:57If you think about what the Olympic Games are, they go from country to country every four years.
01:05So congratulations, you win the bid to host the Olympic Games of some year.
01:10Then what do you do?
01:11You start planning and preparing this immense project.
01:15Well, have you ever done this before?
01:18No, almost by definition, you've never done this before.
01:21You haven't done the planning for the events.
01:23You haven't built these sorts of buildings.
01:25And so you struggle because that's how human beings roll.
01:29And then it's some other country's turn.
01:31And then it's some other country's turn.
01:33And guess what?
01:34Nobody ever learns from experience.
01:36That's why we call it eternal beginner syndrome.
01:39The Montreal Olympics was not a successful project.
01:44In fact, it came in 720% over budget.
01:49So as is typical in the Olympic Games, Montreal decided that the main Olympic Stadium had to be something truly spectacular.
01:58Unlike anything ever seen before.
02:00And so what they did was they created this open stadium.
02:04And then they had this enormous tower.
02:07And then there would be a retractable roof that would go down through guy wires to cover the stadium.
02:15But when it comes to actually constructing it, it's not so amazing.
02:19Because nobody had ever done anything like that before.
02:22And it was precisely because this basic design was something that had never been tried before.
02:28That it got into terrible, terrible trouble.
02:31In fact, for decades afterward, it continued to cost Montreal taxpayers.
02:36Because it was just an endless headache, the roof of the Olympic Stadium.
02:40And given the situation in Montreal and in the province, I think that it was really a criminal act to build a stadium spending so much money.
02:48Canada opens its arms to the world.
02:51The Olympics did go ahead on schedule, which meant that in the main Olympic Stadium,
02:56the athletes showed up and they had the usual ceremonies.
03:00But the stadium was supposed to have a roof.
03:03A roof was not completed.
03:05So they were basically having the games in a partially completed construction site.
03:11Gigantic stadium for the track events as it nears completion.
03:14For decades, the Olympics just kept making this mistake over and over again.
03:19And the cost overruns just got worse and worse.
03:22And so they've been trying to change in sensible ways.
03:26So they're trying to reuse buildings.
03:28They're trying to reuse designs.
03:30They're trying to hire experienced firms that are maybe outside the host country to increase the amount of experience involved.
03:38And that has led to some improvements.
03:41But the games continue to struggle.
03:44California high-speed rail is massively spectacularly over budget.
03:50Massively spectacularly over time.
03:53And it hasn't moved any passengers.
03:56When they started, it was $30 billion.
03:58Then it was $40, $50 billion.
04:00And now the estimated cost for completing this thing is over $100 billion.
04:06If you look at the GDP of small nations, that's sort of the scale we're talking about.
04:11And it hasn't moved any passengers.
04:15A huge reason for California high-speed rail becoming such a fiasco is that they did not do proper planning before they began construction.
04:26They had an idea of the general direction of the route, but it was not nailed down.
04:32It was not firm.
04:33There is an obvious point in central California where the rail line should go down a very straight line in an uninhabited region.
04:42But for political reasons, that got pulled away to a more eastern location, which was much more inhabited,
04:49which meant that it was going through farm fields, very valuable farm fields,
04:55which produced all sorts of political headaches and legal fights, which were just completely unnecessary.
05:01Everything we spent in the state is less expensive than this one project.
05:05It has instead gone to, well, we might say not project hell, but project limbo.
05:10It is a series of construction sites across California.
05:15There is no California high-speed rail line.
05:18No passengers are being moved.
05:20And the prospects of the project ever being completed, moving passengers from Los Angeles to San Francisco and vice versa,
05:27is pretty close to nil.
05:29The project as proposed will never be built.
05:32In fact, most of the members here in this legislature know it won't be built.
05:36If I had to pick one factor among the many different factors that led to California high-speed rail becoming such a mess,
05:44I would probably pick experience.
05:46If you look at the sum total of high-speed rail in the United States, it is zero.
05:52There is no high-speed rail, no real high-speed rail.
05:54There was a French company that has a huge amount of experience with high-speed rail that came to California and said,
06:00would you like to hire us?
06:02And they ended up hiring all these Americans and all these American firms.
06:07And that, to me, is the single most important reason why it became such a mess.
06:12Seattle decided that they had a highway that was on the surface.
06:18They didn't want it on the surface.
06:19They were going to dig a tunnel and put the highway into the tunnel.
06:24And they would run all the traffic through two decks, two levels inside that tunnel.
06:31The problem with that is that you have to build the world's biggest boring machine to drill that tunnel.
06:39And if you build the world's biggest boring machine, by definition, that's a machine that has never been used before.
06:48It's, in human terms, really inexperienced.
06:52And guess what happens when you use an inexperienced machine?
06:56They put it in, it started drilling, and it promptly got stuck and broke down and became the world's biggest cork in a bottle.
07:04What do you do when you have the world's biggest cork in a bottle?
07:07You have to then withdraw the cork, pull it out, fix it, put it back in again.
07:13It resulted in all sorts of lawsuits.
07:16And as a result of that, primarily, the Seattle project was a fiasco.
07:22To many Sydneysiders, it's a monument to inefficiency and extravagance.
07:28The Sydney Opera House not only was not a successful project, it was the type of project which, if you are in the business of delivering big projects, you want to run screaming away from.
07:40Because it destroys careers and corporations.
07:47This is the most controversial building in Australia.
07:49There was a long-serving politician named Joe Cahill.
07:53He had been diagnosed with cancer, he'd been in office for many years, and he was thinking about legacy.
07:58And he decided, I'm going to get behind this project and make it happen.
08:01So they announced a competition, a global competition, to design the Sydney Opera House.
08:08And they got entries from all over the world.
08:11And there was one entry in particular that leapt out, because it was just gorgeous.
08:15It was graceful.
08:16Joe Cahill calls up the winning architect, and the man's name was Jorn Utzon.
08:21Jorn Utzon's entire entry in the design competition basically consisted of this group of beautiful sketches.
08:30The engineers all looked at it and said, we have no idea how to build this.
08:35It took him two years to come up with the technical solution.
08:38And you remember I just said that construction started immediately?
08:41Well, construction was going on the whole time.
08:45That's not how you do big projects.
08:47Because of this management of the project, everything got bogged down, the budget blew up.
08:55Besides being one of the most advanced architectural creations in the world, it'll also be one of the most expensive.
09:01Eventually the Sydney Opera House was built.
09:03That's why we have the building today.
09:05But it took 14 years for it to be completed, and it went 1,400% over budget.
09:13When the Sydney Opera House opened, its internal acoustics were so bad, it was unsuitable for opera.
09:22The Sydney Opera House is in a strange category.
09:26It was massively spectacularly over budget.
09:29It was desperately, desperately late.
09:32But to its credit, it did exceed benefits greatly.
09:37Because it became world famous, it drew and still draws tourists to Sydney.
09:43So you can say that it exceeded benefits ultimately in the long run.
09:48But at terrible, terrible cost.
09:53If you think about all project categories as being on a spectrum, from most likely to fail to most likely to succeed,
10:01you will find that solar power and nuclear power are at opposite ends of the spectrum.
10:08If you think about what a nuclear power plant, a traditional nuclear power plant is, what is it?
10:13It's one really, really big, complex piece of machinery.
10:18And typically the way that they're designed is that you come up with a unique design for this unique plant on this unique site.
10:27Which means all those uniques.
10:30So people come in, the construction companies come in and they work through it.
10:33But eventually you get done and you've got your nuclear power plant.
10:37Well, what happens then?
10:38Typically, 5, 10, 15, 20 years goes by before you actually authorize the next nuclear power plant.
10:45And when they do that, what do they do?
10:48They come up with another unique design for a unique plant in a unique location.
10:54And so you're not going up the learning curve.
10:58You're not getting more efficient.
11:00So that's nuclear power plants at one end of the spectrum.
11:04At the other end, solar power.
11:06Think about a giant solar farm.
11:09It's just a big stack of solar panels that are built in a factory.
11:14They're shipped out to a site.
11:16And then what do you do?
11:17You put up one solar panel.
11:19You put up another solar panel.
11:21And you put up another solar panel.
11:22And every solar panel is identical.
11:24And that means, repeat, repeat, repeat.
11:27It means you go up the learning curve.
11:30You get incredibly good and efficient at it.
11:33Now, there's a word that captures this idea of single, identical building blocks.
11:39Repeat, repeat, repeat.
11:41It's modularity.
11:42My co-author, Bent Flubier, is Danish.
11:46Lego is a Danish company.
11:48So he likes to talk about it being, asking the question, what's my Lego?
11:52It's an identical block, right?
11:55And you can just snap them together piece by piece by piece by piece.
11:58Click, click, click, click, click.
12:00And because you're repeating yourself, you get really, really efficient.
12:05You can actually turn projects which are not obviously modular and make them more modular.
12:12So the Empire State Building is a fantastic example.
12:16What's the module in the case of the Empire State Building?
12:20It's the floor.
12:21Each floor is identical to the floor below it.
12:24Click, click, click, click.
12:27The Empire State Building is one of my all-time favorite projects.
12:32It was conceived in early 1929.
12:35It opened in 1931 incredibly fast.
12:39It was the world's tallest building for 40 years.
12:43It was on schedule and it was not only on budget.
12:46It was actually really substantially under budget.
12:49So to go from the conception of the project to opening the world's tallest building in 21 months is just unthinkable today.
13:00They had experienced construction companies.
13:03They had experienced architects.
13:05A building that they had designed in North Carolina opened.
13:11And so they said to the backers of the Empire State Building project,
13:15how about we do that but taller?
13:19And so if you go to that building, it's still there in North Carolina today.
13:22You can go and you can look at it and it's like an Empire State Building except smaller, right?
13:26So what they did was they were taking what I would call an experienced design.
13:31A design that's been used in the real world and that succeeded in the real world.
13:36And they said, hey, it worked. Let's use it again.
13:41The architects designed every floor of the Empire State Building to be as identical as the floor above it as possible.
13:50And as a result, the construction of the Empire State Building, which started fast, actually accelerated as the project went along.
13:58The architect called this design concept his vertical assembly line, which I think is just genius.
14:04And the applicability of that idea to other projects is vast.
14:09So in New York in the 1920s, remember this was the Jazz Age.
14:14The economy is booming. New York is booming.
14:17And there was a mad race to build skyscrapers because the economy is booming.
14:22There are lots of tenants for these buildings.
14:24And everybody wants to build taller than everybody else.
14:27What basically nobody foresaw at the end of 1929, 1930, the Great Depression hits.
14:35And as a result, the Empire State Building was not a financial success for its first decade.
14:41Not remotely a success.
14:43That underscores a really important point about big projects.
14:46You can do literally everything right and still have an outcome, in this case the benefits, not be what you want it to be.
14:58So the purpose of the Hoover Dam was twofold.
15:00It was to control floodwaters and it was also to create hydroelectricity.
15:05And actually it had a third purpose added because it was the early years of the Great Depression.
15:09The government really wanted a large project to employ lots of people.
15:14It was built in the desert and it was built in a place where the river basically ran between sharp, steep cliffs.
15:24It was a brutal environment.
15:27It was a brutal, difficult undertaking.
15:30And so you might imagine, in fact, this is going to be a disaster.
15:33Under the Boulder Canyon Project Act shall be called the Hoover Dam.
15:37No, it was a great success.
15:41It was delivered on time and under budget.
15:44There were a number of factors behind the success of the Hoover Dam.
15:49The single biggest factor was experience.
15:53Six of the nation's most skillful engineering and construction firms had combined their full resources.
15:59The construction manager of the project was an engineer named Frank Crow.
16:04Frank Crow spent his entire career building hydroelectric dams in the American West.
16:11By the time he tackled the Hoover Dam project, he had built dams all over the place.
16:17He was the most experienced dam builder in the world.
16:20And because he was going from project to project building hydroelectric dams, Frank Crow had people who worked for him and followed him from project to project to project.
16:30So when Frank Crow went to the Hoover Dam, not only was he highly experienced and not only were the people below him highly experienced, but the people together, Frank Crow and all those other people were experienced working with each other.
16:47The Bilbao Guggenheim is one of the most successful projects in modern history.
16:54So it's one of the 0.5% of projects that delivers on all three promises.
16:59In the mid 1990s, Spanish government officials came to the architect, Frank Gehry, and they said,
17:05we have this old building in central Bilbao.
17:08We would like you to renovate it to make it a suitable space for a Guggenheim art museum.
17:13He didn't make a decision.
17:15Instead, he said to them, why?
17:18Why do you want to do this project?
17:21And what these officials wanted the project to accomplish was to draw the tourists who come to southern Spain up to the north.
17:31And by bringing those tourists into Bilbao, they would revive Bilbao's economy.
17:36And so when Frank Gehry heard the why of the project, he thought carefully about it and he realized the project as they had conceived it could not possibly work.
17:47How do you get global media attention for a building renovation?
17:51The answer is you don't.
17:52And so Gehry went to them and said, you know what?
17:54Down by the river is a derelict old factory.
17:57If you knock that down, I will design for you an eye-popping building unlike anything you've ever seen before.
18:04That will get you your global media attention.
18:06That will get you your global awareness.
18:08That will get you your tourists and your economic revivication.
18:12And that's exactly what happened.
18:15In fact, they had huge, huge goals for the number of tourists that they wanted to attract to Bilbao.
18:22And they massively exceeded them.
18:24It was just another building.
18:26Turned out great.
18:27It actually met all three promises.
18:31Not only was it on budget, it was actually a little bit below budget.
18:35It was on time and it massively exceeded benefits.
18:39Which is why I would argue it's probably one of the most successful projects in modern history.
18:46One of the problems, the big problems with projects is what my co-author Ben Flibier calls uniqueness bias.
18:54People tend to look at their own project, whatever it is, and think it's a unique project.
19:00Because what people will typically do when they try to forecast, how much is my project going to cost?
19:05And how long is it going to take?
19:07They'll look at the specifics of your project.
19:10And so if you're doing a kitchen renovation, you'll look at exactly the dimensions of your granite countertop, of your pantries.
19:19And you will calculate the cost based on exactly the materials that you're using.
19:22A much better way to make a forecast is to not think of your forecast as being unique.
19:29Think of it instead as being one in a category.
19:33And the category is the project type.
19:36The best way to make your forecast is to get a whole bunch of data about kitchen renovations.
19:42Get a hundred different kitchen renovations.
19:44Say, how much did they cost?
19:46What's the average cost there?
19:48And that's your forecast.
19:50And that's how your forecast at a minimum should start.
19:53And if you want to adjust it because there are particular problems with your forecast or your project,
19:59you know, if you're using unusually expensive materials or whatever,
20:03then you can adjust it up or down according to those unusual specifications.
20:07But the real core of your forecast should be the category, the base rate, as statisticians would call it.
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