In Inside the Box, David Epstein explains how, since the 1990s, researcher Bent Flyvbjerg has kept a database that tracks giant undertakings:
Only 8.5 percent of projects finished on time and on budget; 0.5 percent did that and delivered the prophesied benefits. Almost every major infrastructure project goes over budget, but at least not by as much as IT projects, which have a greater tendency to go hundreds of percent over budget. The pattern of disaster that Flyvbjerg has documented is relatively simple: With few constraints, exciting projects get too large too fast, going from big idea to giant endeavor extremely quickly. Flyvbjerg’s conclusion could fairly be called the General Magic problem: Rather than accelerating like a plane speeding up and gradually ascending, it’s more like a harrier, lifting straight into the air. He calls the disaster pattern “think fast, act slow.”
“Think fast” means that the period when a project was small enough for frequent experimentation, and for defining constraints, is essentially skipped. On the back of an intoxicating idea, resources pile into the project. It grows without clear boundaries. Lessons that early on could have helped define the project will now come slowly, and painfully, because the undertaking is large and changing its momentum is difficult. Inevitably, regular surprises will now lead to major delays, and—as was the case at General Magic—the project team can work furiously but will effectively still “act slow” as deadlines whiz by.
Flyvbjerg has also documented the (comparatively rare) pattern of big projects that succeed. They take the opposite course: “Think slow, act fast.” They take time to work out boundaries that make the scope of a project clear. Then, when it’s time to hit the gas, work can proceed quickly. Flyvbjerg has a term that he uses to refer to the successful pattern: “Pixar planning.”
In his own writing, Flyvbjerg refers to these as megaprojects:
Megaprojects are large-scale, complex ventures that typically cost a billion dollars or more, take many years to develop and build, involve multiple public and private stakeholders, are transformational, and impact millions of people.
Economist Albert Hirschman called such projects “privileged particles of the development process” and pointed out that often they are “trait making.” That is, they are designed to ambitiously change the structure of society, as opposed to smaller and more conventional projects that are “trait taking,” i.e., they fit into pre-existing structures and do not attempt to modify these.
Megaprojects, therefore, are not just magnified versions of smaller projects. Megaprojects are a completely different species in terms of their level of aspiration, lead times, complexity, and stakeholder involvement.
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To illustrate just how big megaprojects are, consider one of the largest dollar figures from public economic debate, the size of US debt to China. This debt is around one trillion US dollars and is considered so large it may destabilize the world economy if the debt is not managed prudently. With this supersize yardstick, now consider the fact that the combined cost of just two of the world’s largest megaprojects — the Joint Strike Fighter aircraft program and China’s high-speed rail project — is also approximately a trillion dollars. The cost of just a couple of the largest megaprojects in the world will dwarf almost any other economic figure, and certainly any investment figure.