Industrial Megaprojects: Concepts, Strategies, and Practices for Success 1st Edition

This is a unique and important study of very large projects, quite different from the usual project management text in a variety of ways. It presents a number of striking lessons that ought to be heeded by everyone who is involved in project decisionmaking, but probably won't. More about that later, but if you are someone who might be willing to make the effort to break free of what comes "naturally" in order to gain success then it is book to read.

The author, Edward W. Merrow, heads a consultancy serving (mostly) the oil and gas, chemical, and mining industries. He is clearly very knowledgeable about management and engineering in these industries, but his academic background is in economics, and he makes very effective use of it in his work and this book. His firm has consulted on more than 13,000 projects, benchmarking their planning, execution, and results -- and amassing a huge, detailed, quantitative database. Using classical econometric statistical methods he has determined with high confidence which factors make a difference in actual results, and by how much. Thus his recommendations represent not "nice-to-haves" but things that are truly going to make a real difference.

This book, as its title says, is about megaprojects -- one billion dollars and up in today's money. He has 318 of them in his database, enough to draw very firm conclusions. Not only are the stakes bigger in megaprojects but the choices are starker as well. Merrow shows that because of the complexity that goes with such size, the line dividing success and failure is more sharply drawn. Of the megaprojects in his database, about two-thirds experienced more than 25% cost growth over the estimate at project approval, and this generally means that they destroyed shareholder value rather than creating it.

Merrow talks about virtually every major aspect of project strategy and structure, but by far the most highly leveraged is the front-end strategizing, planning, and engineering, before anyone puts hand to welding torch or shovel. He has metrics to assess the quality and completeness of the front end, and he shows that if the front end is done well then there is a very high probability of project success. If the front end work is mediocre then the odds turn against success, and if is it poor then the best thing is to do the shareholders a favor and walk away before wasting their money on implementation. The book provides rich specifics on how to do the front end well, as well as most other aspects of structuring and managing projects.

So if Merrow is so smart, why aren't his clients richer? Why do they persist in doing things that are almost sure to damage their real interests, when he can show them the consequences? It's a question that clearly troubles him. He points to a variety of structures and practices among his clients that get in their way, but this of course only puts the question at one remove. Why can't people learn?

I've been in the megaproject business even longer than Merrow. My experience is in what would seem to be quite different fields: aircraft, shipbuilding, space, and weapons systems. Here too we find many serious and persistent problems. They are usually attributed to factors peculiar to these industries, but in fact the faults most often are remarkably like those Merrow finds in his field.

The problem is not "the system" -- it's people and how our minds work. My own research has turned in this direction, drawing on modern discoveries in cognitive neuroscience, behavioral economics, and social psychology to illuminate the underlying mechanisms and formulate approaches that have a better chance of success than continuing to issue exhortations that most of us are constitutionally incapable of heeding. For a preliminary taste look up my article, "Cost Growth in Major Defense Acquisition : Is There a Problem? Is There a Solution?" on the Web.

In terms of structure and writing the book is serviceable -- clear enough to meet most needs, given some study. Merrow of course must take care not to reveal his customers' trade secrets, or his own, but it seems to me that he could have been a bit more explicit about his data and their distributional properties. Despite any limitations, however, this is a must-read book for anyone involved in very large projects, whether in government or industry, regardless of the industry involved.

Unfortunately, the publishers have done a somewhat sloppy job in making the Kindle edition. Many of the graphics are virtually unreadable and no page numbers are given. Given its expense, this seems hard to justify.

I am a bit prejudiced having worked at IPA under Mr. Merrow a decade ago, but I can say without reservation that this is a book you must read if you work on major engineering and construction projects of any type. If you are like me, you have seen many academic papers on cost overruns based on nothing but lousy statistics and flimsy hypotheses. Put those aside..This is the real thing. IPA holds the keys to the kingdom of what drives project performance (i.e., true predictive models based on real, deep and clean data) and Mr. Merrow is generous to share much of what IPA has learned with everyone without pulling punches (but guarding the client's data). I don't agree with every word (e.g., when it says monte-carlo method it is really about the "line-item ranging" method MCS is applied to) but there is little arguing with the general conclusions and recommendations. If only public infrastructure projects would benchmark like the process industries have-maybe that's the next book.

Industrial Megaprojects is a primer on what to do and what not to do as part of end-to-end megaproject management. This book provides the necessary information for you to establish a decision and execution framework that allows you to be in control of your project's outcomes, not "just hope to be lucky". It is structured in a way those who sponsor, direct or work on large projects can gain a functional understanding of how best to achieve the most business effective results. It also enables business executives who are genuinely in charge to make better decisions about how the project should be developed, governed, and executed. Most importantly, it lays out ways to overcome the largest challenge in successful implementation of megaprojects - enabling the business and technical professionals to work together collaboratively as a fully integrated team.

In this book Merrow presents a systematic analysis of megaproject management performance, and insight into the root causes of the high rate of megaproject failure. Merrow's use of various examples, sense of humour and conversational style all contribute to this being an easy and enjoyable read. Anyone who is even partially involved with any aspect of megaprojects will find value in this book.

While the author makes it clear that most companies are not taking a strategic approach to the issue of understaffed/nonintegrated owner's teams, I would love to know the names of the few operators who ARE proactively building owner's teams capabilities.

Lots of good points in this book. I've been on a Megaproject in Alberta for the last two years and have lived through the labor shortages and schedule pushes which never really speed the project up.

The differences between owner and contractor are spot on and there is a huge misunderstanding between the two groups that needs to be bridged.

Good book and I would recommend it to anyone involved with a Megaproject.

Full of case studies from big infrastructure projects. It gives very clear statements about risk management where external risks are reallydecisive (e.g. in the oil inustry). I read it as a manager of IT projects and learned more for my profession than in many books specific to my area.

Covers best practices for every aspect of project management in very readable style. IPA is THE PM data historian and much of the statistically significant conclusions for practices that generate the best results are contained in this book.

This is a must read for all project managers and capital intensive business executives!

Excellent book! It is filled with practical advice and interesting anecdotes - a type of "best practices" planning. Those sort of things that make you say "yeah, I knew that but never put it into words!" I especially liked Chapter 11 wherein good advice is given regarding contract modifications to reduce percieved risk and thereby obtain more competitive responses to proposals.