Tag Archives: project management

London 2012 Olympic Games (project management)

Yesterday, I attended a conference by Ian Crockford on project management based on his experience at the Olympic Delivery Authority (ODA), the public body responsible for ensuring the delivery of the infrastructure, design and construction of buildings, transport and the legacy of the London 2012 Olympic Games.

london-2012-olympic-games4During the conference, Ian showed a couple of videos, several key figures of the project, and some insights of the best practices that were used, the main challenges they faced, the stakeholders they dealt with, the themes they worked on in parallel to achieving the project objectives and some anecdotes. Let me show some of the notes I took during the conference even if not in a very orderly fashion:

  • Time is the enemy”, even though he conceded that having such an immovable deadline (summer 2012) helped a lot. However, they aimed at completing the project one year in advance (summer 2011) to allow for 1 year of testing.
    • “80% of the value is gained in 20% of the time”, this is risky as it leaves you with 80% of the time to only achieve the remaining 20% of value… and the chances are that you screw it up:
      • it’s easy to lose value,
      • hold onto time,
      • increasing value is very difficult.
  • “Nail down the scope and budget early and stick to it”. After the designation of London in 2012, the ODA took 2 full years to plan everything, including the budget, which was only completed in June 2007 and published in November 2007. From the beginning they announced a plan along the line: “2 + 4 + 1”, 2 years of planning (allow enough time for planning), 4 years of building (including demolishing, construction, etc.) and 1 year of testing.
    • Even if he mentioned that changes are inevitable” he advised to create a culture of not accepting changes easily, only if very well justified.
  • Strategic themes (in parallel of project objectives): increase health and safety of the works (x10 times the British works H&S average), sustainability (local lobbies, Greenpeace, WWF…), equity (gender, race…), development (creation of apprenticeships linked to contracts with suppliers), etc.
    • Emphasis was on the increase in health and safety. It started as a bold objective,  with an open environment with all suppliers where they were told that the ODA would welcome every initiative that increased safety. This had many reinforced effects: lower employee turn over, better productivity, good atmosphere, etc.
  • Size (contracts, figures): the ODA had,
    • 150 NEC3 tier-1 contracts (valued at 2.5bn£) for the Olympic Park,
    • 160 JCT contracts (valued at 1bn£) for the Olympic Village,
    • up to 3,000 tier-2 contracts,
    • 10 concession contracts (utilities)
    • spend peaked at 180m£ per month in the Park,
  • Size (people):
    • The Olympic Park would host about 300 thousand people per day: 250k visitors, 25k media and 25k athletes. This lead to the provisional sizing of some of the infrastructures for such capacity and to provide for the removal of some temporary installations after the Games (e.g. bridges which during the Games had a width of 50ft, today are narrower than 20ft).
    • 47 thousand people worked on the project. Given the short-term nature of the project it was a challenge to attract and retain the people, to motivate and inspire them.
  • Decision making with emphasis on empowerment. “Let the partners deliver”. Asked about things that were underestimated he mentioned “the innovation capability of suppliers given the right environment” (examples given: new system to introduce handicapped into the pool, green plastics…).
  • Documentation: focus from the beginning in getting all the paperwork right (otherwise it may prevent the delivery of completed buildings, etc.).
  • Asked about the impacts of the crisis, he mentioned:
    • need for insolvency management,
    • 2 projects that were to be privately financed in the end were publicly financed (a housing project and the media centre),
    • as the budget was planned prior to June 2007 and the completion of the project ran from 2007 to 2011, many of the costs had been overestimated. This turned in a positive impact (opportunity). Forecasted inflation was not correct, expected bubble in property prices in East London did not happen, etc.
  • “It turns out that if you follow all the bits of Project Management manual… it works!”, even if he conceded that the last 6 months were spent micromanaging through completion.

Finally, there was a question that I wanted to ask before even going to the conference but that in the end I couldn’t ask (nevertheless I asked another one – on budgets). My home city, Madrid, has been a candidate city to host the summer Olympic Games for 2012, 2016 and 2020, coming as losing bidder the three times (London, Rio de Janeiro, Tokyo). Trying to put the blame on someone or to find explanations for the painful defeats, the Spanish press has been prolific and ingenious in finding reasons. On the other side, the Spanish press was also quick to find the explanation for the selection of London for the 2012 Games either in the great last speech by Sebastian Coe or the last-minute lobbying by Tony Blair in Singapore (these explanations fail to explain why other speeches by remarkable athletes or lobbying by other high-ranking politicians go unrewarded). I wanted to ask Ian what was in his opinion the key winning argument or the strongest point of the London 2012 bid, but it turned out that he offered it right away in his speech (“won the bid for London”): the sustainable legacy, the tilting of London centre of gravity towards the East (Stratford), the recovery of a deprived area, the cleaning of polluted areas around the river, the effective use of facilities after the Olympics (a project which still runs until 2014). He pointed that in the cases of Sydney and Athens, the legacy had been a failure…

One of the videos he played, “Great Britain delivers” (3’32”):

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New entrants in the commercial aircraft business

In a previous post, I mentioned the new entrants in the large commercial aircraft business (Bombardier CSeries, Embraer, Russian MS-21, Sukhoi SuperJet, Comac C919, Mitsubishi…). Now that the latest market forecasts both from Airbus (Global Market Forecast) and Boeing (Current Market Outlook) are available, I wanted to briefly note how they are treating the segment that most of these entrants would enter: single aisle jet aircraft.

For example, Boeing in this year’s CMO already splits the single aisle between 90-175 passengers (where new entrants would fall into) and over 175 passengers (still the safe harbor?). In previous studies Boeing didn’t offer such sub-segmentation. On the other hand, Airbus hasn’t published yet such differentiation.

It is even more interesting to compare last year’s GMF and CMO with this year’s ones.

  • Airbus saw a demand for 16,977 single aisle aircraft in 2009 while in 2010 sees a demand for 17,870.
  • Boeing saw a demand for 19,460 single aisle aircraft in 2009 while in 2010 sees a demand for 21,150.

In other words Airbus has increased the single aisle market forecast in 893 aircraft, while Boeing has increased it in 1,690 aircraft… Both have made the forecasted pie bigger before it will have to be shared.

On average, they see ~1,300 more single aisle aircraft than what they saw last year… In the case that these extra aircraft was room made for new entrants, that would leave the new entrants a market share of 6.7% of the single aisle market… not much.

However, those entrants are not yet delivering in that segment and most of their deliveries would come at the second half of the 20-year period. By 2029, it could well be possible that their combined market share is around 10%… still not a big share, but already ~7bn$ yearly business (in 2010 dollars); a ~4.4bn$ after discounts, an amount the size of Embraer revenues (the 3rd company in commercial aviation, reason enough for them to enter the segment).

Boeing even concedes that of the 21,150 single aisle aircraft, 86% of them will be between 90-175 passengers, precisely the market sub-segment that will be ferociously fought.

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Project managers and Pencils

Today I was attending a project management course at Airbus. After some introductions, the teacher came to the always controversial (within such a technological company) comment that “the project leader needs to have experience in project management not in the technical issues related to the project”… she then cited aircraft as an example: “nobody within Airbus may know every technical detail of an aircraft which counts with hundreds of thousands parts, yet there is someone managing its development…”

That example seems very clear. Tonight, while listening to a TED Talk on the exchange of ideas, by Matt Ridley, I got the thread to a way better example: that is the essay “I, Pencil: My Family Tree as told to Leonard E. Read” by Leonard E. Read, which can be found at the Library of Economics and Liberty.

I believe this a much better example because of exactly the same reasons Mr. Pencil gives:

“[…] I have a profound lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher because—well, because I am seemingly so simple.

[…] Simple? Yet, not a single person on the face of this earth knows how to make me.”

Then, the pencil goes explaining where all its components are coming from…

“[…] My family tree begins with what in fact is a tree, a cedar of straight grain that grows in Northern California and Oregon. Now contemplate all the saws and trucks and rope and the countless other gear used in harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into their fabrication: the mining of ore, the making of steel and its refinement into saws, axes, motors…”

If it’s clear that nobody knows how to make simple pencil, clearer will be for any other case of a more complex product.

There is indeed a Mr. President of the pencil company, there may even be a Pencil Programme Manager, but as Pencil says: “There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being.”

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