Nuno Gil - Megaproject Organization and Performance: The Myth and Political Reality

This report summarizes the insights of a three-year study on megaprojectsthe project-based organizations purposely formed to develop capital-intensive, large-scale infrastructure systems. Our aim was to further our understanding of what form of organizing work a megaproject is and investigate the extent to which we could trace empirical regularities in the performance of megaprojects back to their organizational structure. Our central claim is that megaprojects are a meta-organizationa network of legally independent actors collaborating under an identifiable system-level goal. As with any meta-organization, megaprojects are guided by a systems architect, a designated leader who steers the organization in pursuit of a higher-order goal. In the case of megaprojects, the systems architect is the project promoter, the actor who had the grand idea and provides leadership. The promoter can be a solo actor, such as a public agency, a government, a private firm, or a coalition of actors.

In this study, we conceptualize the megaproject organization as formed by two constituent parts: core and periphery. The core members control the strategic choices that define the project output and the development process structure. The core is made up of the promoter and multiple autonomous actors who have direct access to the strategic decision-making process because they control critical resources, including finance, political influence, regulatory power, knowledge of needs, and land. In contrast, the periphery is formed by suppliers selected by the promoter to execute the strategy agreed upon by the core members.

Within the core structure, the project promoter cannot use authority vested in ownership stakes or regulation to get things done. The promoter and the core participants may be unified by the system-level goal. But the core participants are legally independent actors with heterogeneous interests, beliefs, and knowledge bases, and see themselves as development partnersas such, they are willing to commit their own resources to the system-goal insofar as the promoter shares with them rights to directly influence strategic choice. Diffused power over strategic choice creates a pluralistic structure at the core. In these settings, a dominant coalition rarely emerges with sufficient power to impose their preferences on others. Hence, strategic choices are the outcome of negotiation and deliberative processes. In marked contrast, the vertical relationships between the project promoter and the suppliers at the periphery are governed by buyer-supplier contracts that simulate an authority hierarchy.

Armed with this conceptualization of a megaproject as a form of organizing work, we tackle the issue of performance. Deep-seated social norms establish that a successful megaproject is a project in which the scope is frozen early on in the planning stage in order to deliver the project during the implementation stage on time and within budget. These norms are rooted in the professionalization of the project management practice in the 1950s. Since then, the world has become much more crowded and interconnected by technology, but the norms have yet to adapt. Thus, it is hard to see how megaprojects today, with their pluralistic structure at the core, cannot fail in the eyes of third parties. This is troubling because megaprojects are a source of value creation. It is also unfair to the leaders of these complex enterprises who deserve our sympathy, not blame. By revealing the organizational structure of a megaproject, it is our hope to contribute to debunking the megaproject performance myth.

The empirical database informing this study includes several large-scale, capital-intensive infrastructure development projects. Our initial theoretical insights are grounded in four contemporaneous megaprojects in the United Kingdom: Crossrail and High Speed 2 railways, London Olympic Park, and the Heathrow Airport Terminal 2 (T2). These projects unfolded surrounded by the institutional context of an advanced economy with robust democratic institutions. We subsequently extend the validity of our claims to a developing economy context by studying large infrastructure development projects in Nigeria, India, and Uganda.