This episode of Hub Dialogues features host Sean Speer in conversation with journalist and best-selling author Dan Gardner about his must-read new book (co-authored with Bent Flyvbjerg), How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything In Between.
You can listen to this episode of Hub Dialogues on Acast, Amazon, Apple, Google, and Spotify. The episodes are generously supported by The Ira Gluskin And Maxine Granovsky Gluskin Charitable Foundation and The Linda Frum & Howard Sokolowski Charitable Foundation.
SEAN SPEER: Welcome to Hub Dialogues. I’m your host, Sean Speer, editor-at-large at The Hub. I’m honoured to be joined today by bestselling author and journalist Dan Gardner, who is the co-author of a must-read new book entitled How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything In Between. The book weaves together data case studies and a powerful narrative to illuminate modern society’s challenges with completing big and small projects on time and on budget and what we can do about them. I’m grateful to speak with him about the book’s insights and analysis, and implications for government policy and society as a whole. Dan, thanks for joining us at Hub Dialogues, and congratulations on the book.
DAN GARDNER: Thanks very much. I’m happy to be here.
SEAN SPEER: Let’s start with a scene-setting question. Dan, listeners may be intuitively familiar with the idea that various types of projects, including public and private infrastructure, public and private procurement, et cetera, seem to be taking longer and costing more. There are various examples ranging from high-profile public transit projects to the rising costs and delayed timelines on the renovations of the parliamentary buildings and virtually everything in between, as the book’s title alludes. Is that intuition right? Is it indeed the case that projects are generally taking longer and growing more costly, or is that something of a misperception?
DAN GARDNER: Well, it’s an interesting one. To say that something is taking longer is of course a point of comparison, and that would require us to have a very good baseline for how projects were doing across different types in the past. And unfortunately, we don’t have that, as far as I know. So I really wish I could say with some confidence that this is true. Certainly, I probably share that perception, and I think there are some good reasons for why they might be taking longer, but I don’t think we can be confident in saying that. It’s also very important to recognize, if you want examples of projects going over budget and over time, there are plenty of historical examples in the past—we remember the successes, but the failure is plenty of really bad examples in the past.
So we can’t be confident of that, but what we can be confident of is something that’s just as important, which is, to say, projects make three basic promises. Number one, it’s going to cost a certain amount of money. Number two, it’s going to take a certain amount of time. And number three, it’s going to deliver certain benefits: passengers moved, units sold, whatever it is. So those three core promises, that’s the foundation of any big project. And what we can say, thanks to 30 years of my co-author, Bent Flyvbjerg—by the way, I’ve been working with Bent for years; he’s Danish and I still cannot pronounce his surname correctly. I think you have to be Viking to do that, and I’m not. In any event, Bent Flyvbjerg, a professor at Oxford University, has been gathering data and producing the world’s largest database of big projects over the last 30 years. It’s an immense, immense database, and it boils down to the situation: the status quo today is really bad. And once I give you those numbers, you’ll understand how bad.
And then I’m going to convince you that, in fact, as bad as it sounds, it’s worse than that. So how bad is it? Well, on those three core promises, how many more percentage of projects come in on budget? It’s about 48.5 percent. And by the way, this is across all project types, across all countries around the world, this is boiling it all down to 48.5 percent come in on budget. What percentage comes in on budget and on time? It’s about 8.5 percent, which is really bad. What percentage of projects come in on budget, on time, and on benefits, which is the same if they deliver all three of their promises? That’s about 0.5 percent, which is a rounding error. That’s really bad. So that’s the global track record, and it’s bad.
And as bad as that sounds—and here’s where I’m going to try and convince you that the situation’s even worse—I haven’t described the magnitude. So if you come in 3 percent over budget and 5 percent over schedule, that’s probably not bad. In fact, there are a whole lot of areas where, if you come in 3 and 5 percent over, you would pop the champagne. That would be a huge success. In fact, what we find and what Bent has shown, and this is a very incredibly important insight, is that for most project types, not all, this is a very important point, but for most project types, the outcomes are not distributed normally. And as a result, you do not have a normal bell curve with thin short tails on either end, which is to say, if you go over budget, you don’t just go a little bit over budget; you’re not just at risk of going a little bit over budget, you’re at risk of going catastrophically over budget.
So you may not just be 5, 10, 15 percent over budget; you may be 50 percent, 100 percent, 200 percent, 300 percent over budget. In fact, for many of these project types, they’re very fat-tailed and there is no maximum extent. So the risk is not that you’re going to be 5, 10, 15 percent over budget; it’s going to be 100, 300, 500 percent, or who knows how high it could go. Some of the projects that we’ve looked at have been over a thousand percent over budget, which is pretty mind-blowing when you think about it.
So basically, if we were to summarize, most projects do not deliver on the three core promises that they make, and they are at risk when they go wrong, of going catastrophically wrong. And so when we’re talking about big projects, we’re talking about tens of billions, hundreds of billions, depending upon how you define it, trillions of dollars at stake. We really can’t afford to have that bad of a track record. We’ve got to do better with this stuff.
SEAN SPEER: Which leads to the question: What are the factors that are leading to these delays in cost overruns? Are they contingent, or are there some general explanations that are cross-cutting?
DAN GARDNER: Right. So that’s the big one. So what we tried to do in the book is, from the outset, depending upon the project type you’re looking at, obviously, IT projects are very different from defence projects, are different from energy projects, are different from transportation projects. There are specifics to each project type that are only relevant to those. We do not address those. We address those factors which are effectively universal. It really doesn’t matter what the project type is. You see these at work time and time again. And I think it’s very important to bear this in mind because the breadth of the project types that we’re talking about is incredibly illuminating because, as I say, what does an information technology project have to do with paving roads? It should nothing to do with them. And yet, if you look at outcomes statistically, they’re very similar. So why is that?
Well, because there are certain universal factors among certain universal elements, and at its most profound level, this single universal element is people, right? It doesn’t matter how advanced your technology is, it doesn’t matter how ambitious your project is. In every single instance, the one thing that doesn’t change is people making decisions. You screw that up, the project goes down. And you see this over and over and over again. And guess what? We see people screwing up in similar ways across very different project types. And they’re ways which would make a psychologist smile because they actually are in line with what psychologists understand about how human beings make decisions and how those decisions go wrong.
SEAN SPEER: Why don’t you take that up, Dan? Not only in this book but in some of your past work. you’ve dug into neuroscience and human psychology, and various other lines of analysis. What’s the role of cognitive biases in understanding what causes projects to go over budget and over time?
DAN GARDNER: Well, let’s try and work backward to the psychology piece. What’s the pattern we see overall in the grand conclusion? What’s the pattern we see in failed projects? It is what we call—we try and boil it down to four words. It’s think fast, act slow. And by think fast, what we mean is; you engage in quick superficial planning and you say, “Right, that’s it. We’re ready to go. Shovels in the ground. Everybody get to work.” And everybody’s very excited because shovels in the ground means you’re making progress and the hole’s getting bigger. So that’s more progress, and everything’s fantastic, and you’re racing ahead, and it’s all swell. And then a problem arises, and then you have to run around and try and figure out how to solve the problem. And while you’re doing that, something else goes wrong. And then these things that are going wrong can collide with each other like cars on a foggy highway.
And before you know it, you get further and further behind, and your progress slows more and more and more. And what starts as a sprint becomes this slow, painful slog because you engaged in quick and superficial planning. Because if you have thought about it or if you worked more carefully on the problem, you would’ve discovered not all problems—life is always full of surprises, projects always have surprises—but you would’ve discovered many of these problems in planning, and you could have worked out solutions in planning. And if you had done that, then that wouldn’t have been a hiccup in the delivery process. So then the question becomes, right, if that’s the pattern, think fast, act slow, why do people think fast? Right? To tell people—and this is fundamentally the advice of our book—is not earth-shatteringly counterintuitive. We’re saying slow down, think carefully, do careful planning, put a lot of effort into planning.
That’s not exactly stunningly counterintuitive. Abraham Lincoln repeatedly said, “Measure twice, cut once.” There was a Roman emperor whose slogan was “Make haste slowly.” So this is—it’s a Roman emperor, this is old advice, right? So then the question becomes, well, why the heck do we engage in quick and superficial planning if it’s so bloody obvious that we should not? And our answers on that basically are twofold. There’s one: politics, which we can talk about later. But it’s also two: it’s really psychology. Well, really, there’s a third one. I should quickly add a third one. In many organizations, there is a bias toward action. Meaning basically planning is considered talking, yakking. That’s not really doing stuff. Doing stuff is shovels in the ground, the hole has to get bigger. That’s progress.
And so there’s a bias towards short shrifting planning and going straight to doing. But basically, the core of this is politics and psychology. And the psychology, if you look at the piece of it, if everybody’s read Daniel Kahneman’s Thinking Fast and Slow—which is the language that we’re using as an homage to his great book—his core insight, and the core insight of modern psychology, is that we are truly inclined to look at a situation, size it up quickly, draw conclusions, form a plan of action, and move on. That’s how human beings naturally roll. We are not inclined to look at a situation and say, “Hmm, I think I know what’s going on, but I should do further investigation and reflect upon this carefully.” That is just not how we are, right? If you look at—there are good evolutionary reasons why we’re inclined towards the quick and dirty move-on approach, but that is what we do.
And so you can see this manifesting itself when people even tackle big projects where very clearly that quick intuitive judgment is a bad idea. But we do this because, for example, one of the famous psychological biases is optimism bias. So we will consistently underestimate how long a task will take. Even if it’s a simple task, even if it’s a familiar task, even if you know about optimism bias, you will still underestimate how long it will take to do the task. And why is that? In large part, it happens because we have a habit of mental simulation. So you see yourself doing the task, and you go, “Okay, that’s going to take this long. Yeah. Here’s my estimate.” Well, did you include any interruptions in you doing the task in your mental scenario? Did you include surprises? Did you include the unforeseen? Did you write all those things that intrude upon us in life? No, of course you didn’t. What you did is you saw yourself just doing a task without interruption, and therefore what you effectively saw was a best-case scenario. And you’ve based your estimate on the best-case scenario, which is a really bad idea. But again, that’s how human beings naturally roll. So there’s a whole series of these—in fact, one of the fundamental concepts that I constantly urge people to remember from Kahneman’s work, and it’s very, very important here is this wonderful acronym WYSIATI. I love it because it’s so ugly.
WYSIATI, W-Y-S-I-A-T-I. What You See Is All There Is. Kahneman’s great insight is basically if you’re going to make a quick intuitive judgment, you can’t afford to say, “Here’s my quick intuitive judgment, subject to the possibility that there’s other information I’m not aware of.” You can’t do that. You have to just use whatever information you happen to have available to you at this time. Make your judgment, be confident, you’re done, right? So WYSIATI—What You See Is All There Is—is really hardwired into us. And the idea that, “You know, there may be other stuff I’m not aware of, and before I form a judgment, I should stop and investigate carefully,” that is not natural human decision-making. And so if you look at these very, very basic mechanisms of human psychology, they’re all inclined towards saying, “Right, I understand what it is. I understand what the project’s supposed to accomplish. I understand what the best way to do it is. Let’s just get on with the work.”
So the psychology is compelling us to do the quick and superficial planning and get on with the work. Now, you combine that with politics. Politics—and here I’m using the term broadly—this is for resources. Who gets what? So, actually, to start with politicians, this often happens. Quick and superficial planning can be very useful for you as a politician. Say you want to get a project approved, but you know that there’s going to be lots of opposition. What do you want? You want a forecast that says, “This is going to be very cheap and quick,” right? What’s the best way to get a forecast that says, “It’s going to be cheap and quick?” Well, that’s with cheap and quick, and superficial planning, right?
You’re not interested in accuracy; you want approval. So you want that low-ball figure, you get your approval, and then what do you do? You want to get shovels in the ground going as fast as possible and get that hole as big as possible as quickly as possible so that in future, if you are not the person in charge, whoever is in charge will not be able to pull the plug because then they have to swallow the sunk costs. And that’s another psychological problem that human beings have. And politically, it’s impossible to swallow sunk costs. So you know, if I can get this project going right away and we get a hole big enough, then whoever my successors are, they’ll be stuck with it. They’ll have to see it through. And you see that time, after time after time in projects, the Sydney Opera House is one of the most dramatic examples of this.
The Sydney Opera House ended up going 1600 percent over budget. And largely because the politician in charge very deliberately engaged in this sort of calculation. And of course, it’s not just politicians, it’s also corporations, right? If you’re a large construction company and you want the giant project to go ahead, you want a piece of that pie, then what do you want? You want the figures to be low. And if that means that down the road you have to discover that there are further problems—oh, that you didn’t anticipate, in quotation marks—then, well, we can deal with that then, and we can talk to our lawyers, and we can sue for further compensation, et cetera. And this is a standard pattern. So what you have is you have a whole bunch of players in the system who have a self-interest in quick and superficial planning. You have human psychology, which inclines us towards quick and superficial planning. And as a result, you get a deluge of quick and superficial planning.
SEAN SPEER: There’s so much there to unpack, Dan, and I want to come back to the seen versus the unseen in a moment. But let’s just stay on the subject of project planning. In light of the interaction between politics and cognitive biases, the book argues for what you call the need to go from left to right. What does that mean? What’s the key insight there?
DAN GARDNER: So thinking from left to right means that—sorry, right to left. Let me clarify this. Go right back to the very beginning of a project. What is the project? What are we going to do? Think about how the genesis of most projects is. You can imagine a scenario where somebody pipes up and says, if you live on an island, “We should build a bridge to the mainland.” Okay? And then people talk about it; they say, “Where would the bridge go? How big would the bridge be? What would go across the bridge? How much would it cost?” Right? Stop. Already, you’re way too far down the process. The very first thing you should be talking about is why. What is it that we hope—we don’t build bridges to have bridges; we build bridges in order to deliver certain benefits. What are the benefits? Explore those, develop those, have a full and explicit appreciation of what those benefits are that you see.
And only then should you then turn to the means to achieve those benefits. Right? Now, if you think about a Gantt chart, where all of it’s equivalent—it’s basically a project chart, project management tool, which basically says, “Here’s a flow chart, here’s the things that we have to do, and here’s when we have to do.” Then one thing after another, until you get to the final box on the right. And the final box on the right is the happy thing has been built. And you’re getting all these good benefits in that suite. So what we say is, the very beginning of the project, we say, “No, don’t talk about bridges. Don’t talk about any of this other stuff. Don’t talk about costs.” Why. Ask why. What’s in the box on the right that you hope to accomplish?
And we tell the story of Frank Gehry in the book. Frank Gehry is a master of this. People think that Frank Gehry is this mad artist that people go to and you hand him a blank cheque, and he delivers some crazy building that nobody’s ever seen before. And it costs a fantastic amount. In fact, Frank Gehry could not be more different than that. We interviewed him on multiple occasions, and he’s a fascinating, fascinating guy. But one of his superpowers is his ability to ask questions and listen. And so the very first thing that Frank Gehry does when people come into him is then they routinely come into him with a project idea in mind. “Here’s what I want you to build, Frank.” And he says, “Why?” And then they have conversations about who the client is, what their goals are in life. And then he tries to get a sense—a real sense, a meaningful sense—of what is exactly you want to accomplish here.
And there are multiple examples where Frank Gehry transformed the nature of a project because he started with that conversation. So Gehry’s career, he was a respected and successful architect into his early 60s. But then he gets vaulted to the status of the global elite because of the Bilbao Guggenheim, which is this gorgeous masterpiece of the building that he builds in northern Spain in a City called Bilbao, which nobody had heard of outside Spain before Frank Gehry. But what people don’t know about that story is people came to him, the regional officials from the government of the Basque region, they came to him and they said, “We have a project we want you to do.” He said, “What is it?” And they said, “We want you renovate this old building in the centre of Bilbao and make it a suitable art gallery for the Guggenheim.”
And he said, “Oh, okay. That’s interesting. Well, tell me why you want me to do that.” And then it turned out that, basically, it’s because Bilbao was the Detroit of Spain. Their heavy industry was gone, and this was basically an economic development. They needed to divert some of the tourists from the southern Spanish tourist trade to the north. They wanted to bring in artists, all that sort of thing. And this is the flagship. Well, now Gehry has the sense, “Oh, I see what you’re trying to accomplish.” And then he goes to Bilbao, he takes a look at the site, and he says, “Look, it’s a beautiful building you’ve got identified for this renovation. That’s not really suitable. And besides, which is a renovation ever going to achieve what you want it to achieve?” He said, “No, you need to accomplish your actual goal. You need a grand, spectacular building. And, oh, by the way, I’ve identified this place on the river that’s pretty dramatic. “And what you should do instead, I think, to accomplish your goals is to have this big piece of signature architecture, which I will build.”
And that’s the genesis of the Bilbao Guggenheim, which is one of the most famous buildings in the world. And it’s also one of the most successful projects in history, according to the terms of the Bilbao officials themselves. Because they end up—the economic development produced by that one building is absolutely dramatic. I mean, they breathed life back into Bilbao with that one project. But it all started because he asked why. So then he had a clear idea of what’s in that box on the right. So number one, by asking what’s in the box on the right, you end up with this opportunity to ask, “Well, what’s really the best way to accomplish that?”
Because it might be something that we’re not thinking of at all right now. It might be something else. But number two, once you have a very clear picture of what’s in that box on the right, you’ve now got a north star for the whole project. It says, “What are we trying to accomplish?” That and only that. Let’s keep our focus on that. As the project proceeds, as you go through planning as you go through delivery, everything gets complicated. There are people pulling you in every direction. Everybody wants a piece of the pie. It gets chaotic. It gets confusing, and it’s incredibly easy for the project to be diverted in some way, shape, or form. But if you’re a project manager who says, “No, that, that, that box at the end on the right, that’s what we’re aiming for from beginning to end,” that helps keep the project on track.
One of the examples we used to illustrate this is Robert Caro, and this one hits home for me as a writer. Robert Caro is one of the greatest living biographers. He’s legendary for writing these unbelievably complex biographies of people like Robert Moses and Lyndon Johnson. And Robert Caro starts every book exactly the same way. Remember, if you’re Robert Caro, you don’t have to go to a publisher and say, “Here’s my proposal for a book; would you give me a cheque?” You’re Robert Caro; they’ll just give you a check. But Caro does something which authors are basically forced to do when they go to publishers trying to get contracts. He sits down, he says, “What am I trying to accomplish with this book?” And he literally goes through a period of several weeks in which he agonizes over that for—that’s a very, very tough exercise. If you’ve ever been through it, it’s very hard.
But he agonizes over it for weeks, and he tries to boil it down to literally two or three sentences. And then, when he has those two or three sentences, and says, “This is the point of the book.” Then he types those up and he tapes them on the wall behind his typewriter. So that throughout the entire writing of the book, as he’s getting confused and bewildered and he’s lost in all this dense information, anytime he’s lost, he just looks up and he says, “What am I aiming for? That’s it.” And that pulls him back on track. So that’s why we say, “Think right to left.” So you’re thinking about that what’s in that box in the right at the end, and then you’re managing left to right. Because that’s daily life. You’re managing left to right, but you’re thinking right to left.
SEAN SPEER: There’s a popular tendency to associate project efficiency with almost a dictatorial or authoritarian model. I think, for instance, of the tendency at times to lionize China’s ability to get things done or even the mystique around Donald Trump as a builder. Based on your research, Dan, are these perceptions rooted in fact? Is there evidence that a project management regime that places accountability and authority within a single individual or institution is more prone to success?
DAN GARDNER: Let’s be careful because the way you phrase the last part, “Should an individual or an institution be responsible and have power for the project?” The answer there would be, yeah, that’s a good idea. Responsibility and power should go together. There should be clarity about the management of the project. But at the beginning of your question, you’re talking about dictatorial. And so the model there would be there’s the project manager as dictator. As in, shut up and do as I say, and you don’t need to think; you just need to obey. And that is absolutely wrong. And you also mentioned China, by the way. I should mention—I don’t think this actually comes up in the book.
But Bent actually did some fascinating work on China because you remember—I don’t know what it was—maybe a decade ago, a little bit less, it was very, very popular. Everyone was saying, “Oh, China can build; China can build; look at all this. High-speed rail, high-speed rail forever. And they got all these towers. They’re building everything.” And so, Bent, actually—the problem with China is you don’t actually have the data, right? It’s not an open society. You don’t actually have the good data. You don’t know what’s the quality. You don’t know the cost. You don’t know the time. You don’t know, right? We could build anything today if you pour enough money into it, right? Or if you’re willing to override laws or whatever.
So Bent actually looked at Chinese project data that involved the IMF because, when the IMF was involved, it required that certain reliable data be produced for its funded projects. And when he looked at that data, he found that they actually weren’t terribly impressive. And so Bent’s general take on the China story is that, yeah, they’ve built a heck of a lot because they’ve spent a heck of a lot. Also, we can’t be entirely confident about the quality of what they’ve built. There’s a lot of corruption. Things fall down. Only over time will quality reveal itself. So there’s a large question mark over China, and the whole dictators make getting things done model just doesn’t work. A far better model that we use in the book is the Heathrow Airport Terminal 5. Airport terminals are notorious projects, particularly for—you can imagine building a terminal at Heathrow while Heathrow is still operating. They had to build this enormous terminal and never interrupt operations even for a minute, and then open it. And it’s supposed to all work smoothly.
And you can imagine how big and complex this is. It’s not just a building; it’s runways. It’s all the infrastructure that goes together with it, and so on. And if you look at that model, they had clarity about who was in charge. As I said, you had this—there was a client, there was a management team. If he said who’s in charge, it would be very, very clear who’s empowered responsibility. They went together hand in hand, that’s very important. But the other thing that Heathrow had was a determined effort from the very beginning to get everybody to understand what the project was, and we’re all in it together. We’re not working for our separate corporations. We’re not working for ourselves. We’re working for Terminal 5. And so that understanding of what is it we’re trying to accomplish, what are we aiming for, was from top of the organization to the bottom of the organization. And so you had people who were motivated. In other words, what I’m describing is a team. They had a real sense of team. And by the way, that actually goes to the very fundamentals of how you design the project because, one of the standard things that happens—this happens in Canada all the time, and it’s a big reason why Ottawa LRT turned into such a bloody mess—is that you, as the client, you want to arrange things so that if something goes wrong, the risk is on somebody else, right?
And so one of the standard things is to say, “Okay, you, the construction consortium or the construction company, or whoever, you get this contract. Congratulations. But in the contract, it makes it clear that you have to deliver by a certain time at a certain price. And if you don’t do that, it’s all on you.” And you say, “Well, that’s terrific because then there’s no risk to me as the client. Why wouldn’t I arrange things that way?” And in fact, the Ottawa contract looked like genius when they had a sinkhole that appeared in the city. A sinkhole is crazy. And, oh my God, that’s going to be so expensive. And then it’s all on the contractor. So don’t worry about the citizens of Ottawa.
Well, the problem with that model is that it pits the interests of the parties against each other, right? So if something goes wrong, the very first thing a rational person should do is point the finger, right? If something’s gone wrong, it’s not on me, it’s on you, or it’s on that subcontractor, or it’s on somebody else. And after you’ve pointed that finger, the very first thing you should do is you should call your lawyer because you’re now going to get into a big fight over whose responsibility this is. So instead of the energy and creativity of people being focused on solving the problem, all that energy and creativity and money is now going to lawyers fighting over who’s responsible. Well, at that point, you’re dead. That projects going to be a mess. So right from the beginning at Terminal 5, what they did was they had contracts that said, “Basically, no. We, as the client, if we miss the target, it’s on us.” So it’s only positive incentives. If you hit the targets or if you even come in early, that’d be terrific. You get bonuses. But you are not on the hook if things go wrong. And as a result, guess what happened? Things did go wrong, because things always go wrong. And everybody sat down together as a determined team. They came up with solutions and they solved the problem, and they kept going. And as a result, Terminal 5 was a huge success.
SEAN SPEER: I mentioned, Dan, that we would come back to the subject of seen versus unseen. I want to bring the conversation to that now. The book outlines that one of the opportunity costs of projects that run longer and cost more than projected is the opportunity cost of scarce resources being dedicated to fewer projects as a result. Do you want to talk a bit about the unseen costs of the failure of these types of projects?
DAN GARDNER: Yeah, this is one of my favourite themes. Thank you for that. Look, when people talk about can we increase project efficiency by 30 percent? It sounds like, “Okay, that sounds like a worthy goal. But who, aside from accountants, really cares?” Right? It is 30 percent, who cares? Well, people routinely, and again, this is understandable from a psychological perspective, what people routinely do is they mess the opportunity costs, right? So if you go and you spend three times more for what you could have had at 1/3 the cost, well, where could you have done with that money? It’s really that simple. When a project goes five times over budget, well, guess what? There’s a whole lineup of projects that could have been built that won’t be now, or whatever other use you have for that money. The most dramatic example of this—and this is why it maybe requires imagination to see this. And unfortunately, we too often lack that imagination. But there’s a really horrible, horrible, sad example in the Sydney Opera House. I mentioned the Sydney Opera House.
When you say the Sydney Opera House, everyone thinks, “Well, that’s one of the world’s most famous buildings. That’s a great success,” right? And of course, if it went 1600 percent over budget, I don’t care because I’m not Australian. I didn’t pay for it. So it was a marvel. It’s a wonder. Good for you. This is terrific; we’re thrilled, and I understand that point. But can you tell me the name of the man who designed the Sydney Opera House? Right? One of the world’s most famous buildings. Nobody ever knows his name. His name was Jorn Utzon, another name. He was about 38, 39 years old when he won the design competition to design the Sydney Opera House. And he had these amazing sketches. They were just these beautiful, graceful sketches. And people were blown away. And they said, “Yes, congratulations. You get this.” Well, then they said to him, “These sketches are lovely, but they’re just sketches. Now, go do a proper plan.”
Well, the problem was, at that point, he hadn’t—what’s this thing going to be made of? How is it going to be constructed? In engineering terms, is it sound even? He hadn’t worked on any of that. They had no idea how to build any of that, right? Which all would be fine if they had simply said, “Okay, well, Jorn, congratulations; it’s a great vision, but go off and figure out how to do it, and we’ll wait until you come back.” Right? Which would be a sensible thing to do. So he does go off, he does learn how to do it, but it takes him years to eventually crack the puzzle. And in the meantime, remember I told you about the politician who decided he was going to rush ahead? The Sydney Opera House was the legacy project of a politician named Joe Cahill, who is a long-time officeholder who had been diagnosed with cancer, and he wanted Legacy with a capital L. And so he said, “We’re going to build an Opera House.” So they awarded this prize to Jorn Utzon, who had to go and figure out how to build this damn thing.
And then Cahill turned around and said, “Okay, I want a budget and I want a schedule, and I want it on my desk by Monday.” And they produced this thing. But of course, you know how meaningful this budget and the schedule are because they’re just making stuff up at this point. But it’s a nice low number. And so Cahill says, “Right, it’s approved. Get digging.” And they start construction right away. And so they start the construction, and as you can imagine, things go to hell because they don’t even have a plan. And so at one point, they’d already built a whole bunch of stuff, and they actually had to dynamite it and clear away the rubble, and start over again, right? Because Jorn Utzon eventually came back and said, “I’ve got it. I’ve got it. Here’s the solution.”
Well, you say, “Well, that’s fine. They worked it out. Well, here’s the problem.” When you have a project whose budget is exploding and whose schedule is going up in flames because the Sydney Opera House ended up taking 14 years to build and going 1600 percent over budget. When that happens, it becomes a political scandal. When you have a political scandal, you have to have a scapegoat. They made Jorn Utzon the scapegoat for the failure of that project, and they fired him midway through. He leaves Australia in disgrace. He never actually sees his masterpiece with his own eyes. He lives into his 90s, and he never saw it with his own eyes. This is a terrible tragedy. But even worse, this stuck to him. It completely destroyed—he was an unknown architect. He had no track record. And then this disastrous budget blowup happens. He was never given a commission for another major building in his life.
So basically, the cost of screwing up this project management so badly was not just an immense pile of money from Australians. The cost is all the other masterpieces that Jorn Utzon would’ve built but didn’t because it was so badly mishandled. And so we have to recognize that every single time you see these, “Oh, well, budget went 300 percent over budget, and ho-hum, it’s another white elephant.” No, that’s not a ho-hum. Picture what has been lost. Picture what we won’t be building because we screwed that up. You should get angry about that.
SEAN SPEER: I wonder too, sometimes, Dan, if another unseen cost is socio-political. That is to say, one of the reasons our society feels like it’s in something of a malaise is due to the sense that we can’t get big things done and that that’s contributed to a narrowing of our ambitions and a scaling back on our time horizons. In the past, major projects like, say, the Apollo program, or before that, the interstate highway system, or, closer to home, the construction of new universities in the 1960s and 1970s, contributed to a positive sum sense of the future. How do you think the issues that you discuss in the book are tied to some of these bigger political trends occurring in our society?
DAN GARDNER: Oh, I think that’s absolutely correct. One of the best manifestations of this is when somebody pops up and says, “Hey, we’ve got an idea for a big, ambitious project. It’ll be a wonderful thing. And here’s the budget; here’s what we think it would cost.” And everyone groans, and they roll their eyes, and say, “We all know how these budgets go. You’re low-balling the figure.” That’s cynicism—because let’s name it for what it is—that cynicism is poisonous, and it’s evidence of, I would suggest, exactly a wider illness, the illness that you’re identifying. The sense that we can’t do this, so why even bother trying? And that’s why it’s so important. And as much as we start by focusing on the sorry track record of big projects, we focus heavily on the success stories because they’re happening. They have happened. And they’re happening now. And they can happen more in future.
One of the ones that we talk about near the end is Denmark’s experience with offshore wind turbines. It was only 15 years ago that there was essentially no offshore wind industry. Nobody had experience with it. Wind energy had been—we’ve been producing electricity with wind for a very long time. But it hadn’t really evolved. It wasn’t cost-effective. It would be very, very easy and tempting to say, “You can’t do anything with this. This is never going to amount to anything.” Well, Denmark didn’t do that. Fortunately, for, frankly, Denmark and the world. They put huge resources into the development of an offshore wind industry and basically pioneered the technology. They advanced it incredibly rapidly. Their cost effectiveness is just—the figures are just breathtaking. And in the space of about 15 years, they went from this obscure experimental stuff to a major source of electricity for the country. And they are the dominant player in one of the world’s great new energy industries. Well, that’s never going to happen if we have a defeatist attitude.
SEAN SPEER: Particularly in the government setting, Dan, the role of rules and regulations slowing down successful projects can sometimes be characterized as a conservative view rooted in skepticism about government or Public Choice economics, or whatever. But there’s a strong case that progressives ought to be as concerned or even more concerned about some of these issues. Take, for instance, the goal of net-zero emissions, which, if we’re to have any chance of meeting that target by the middle of the century, is going to involve the massive building of all types of infrastructure, including electrification, mining, and other clean energy projects. I get the sense that progressives are increasingly turning their minds to these issues, particularly in the U.S. What’s your sense in Canada? Is there a constituency in progressive circles for a vision and agenda focused on what you might call “building things”?
DAN GARDNER: Yeah. And I think climate change—you’re right to identify climate change as the catalyst. It would be interesting, the counterfactual world in which we did not weren’t faced with the threat of climate change, to see whether what the politics would be like in that. But in this world, you just have to say that phrase, climate change. We need to build. We need to build on a scale and with the speed the likes of which haven’t been seen since the Second World War. We need to churn out wind turbines the same way we churned out Liberty ships. And with as much zeal and clarity of purpose. And I think that that is a message which resonates certainly among more pragmatic left-wingers. In fact, Seth Klein wrote a book which is basically the World War II analogy about bringing that zeal and passion for building to build out the infrastructure that we need to fight climate change.
So yeah, absolutely. More needs to be done in that regard. You still have people who, if one person raises an objection to the site of a wind turbine, suddenly you can’t build a wind turbine. Well, we’ve got to get past that. But yeah, no, so that’s a big one. And the other really big element at work here increasingly, I think, is housing. Housing is a 19th-century industry. Housing is a ridiculous, old-fashioned, inefficient ridiculous process. We still build things on site. One of the themes of the book is the idea that whatever can be done in a factory should be done in a factory. You build in the factory, and then you send that completed work to the site, and you assemble; you don’t build on site.
That is basically—we talk about that being not construction entering the 21st century because that’s not really 21st century technology, that’s 20th century technology. So construction needs to get with the 20th century. And then we can talk about really radically reducing the price of housing. We need to produce more housing. And the way to do that is to change construction. We haven’t talked about modularity, but that’s a really big piece of this. Modular housing is a phrase which is redolent of the 1970s. And people, when they hear modular housing, they think cheap and ugly. And understandably, because a lot of modular housing has been cheap and ugly, it doesn’t have to be that way at all. There is so much that can be accomplished in that regard, but we’ve got to shake up our mindsets.
SEAN SPEER: Let me ask you a penultimate question about social license. On one hand, most people listening, I suspect, would agree that projects ought to be completed on time and on budget. On the other hand, many would also be supportive of things like community consultations, particularly with Indigenous communities, which is now essentially a constitutional obligation. How does your research touch on the role of consultation and community engagement? Is there a way to do it well but fast? Or, given today’s expectations of inclusivity and broad engagement, do we just have to live with projects that may take longer and cost more?
DAN GARDNER: That’s a really interesting question, and I suspect some of the answer is going to be a very grim yes to the latter part of your question. When you look at the statistics on budgets, budgets and schedules are typically produced—you do your consultation, then you come up with your budgets and schedules. So if you have a long, laborious consultation prior to, it will not be reflected in the budget schedule. So I can’t answer your question as concretely and precisely as I would like, but let me illustrate with, in fact, to go back to T5, the terminal of Heathrow. For the construction of that terminal, the government engaged in the longest consultations in British history. Brutal, painful—you don’t build big stuff in Britain idly or lightly. So it was a long, painful, difficult knockdown drag-out process.
And at the end of the process, by the way, they did not have everybody on board. You will never have a giant project, ambitious project, that has literally everybody on board. We have to be prepared for that. We have to be prepared to say, “Well, that’s democracy, and we’re moving on.” That being said, one essential element of the project that made it work was the leadership of the T5 project was very determined from the very beginning to be as transparent and communicative as possible. And so the construction manager, an engineer named Andrew Wolstenholme, spent an enormous amount of his time just talking with people. Just saying, “Here’s what we’re doing; here’s what the stage is; here’s where the project is at; what are your concerns? I want to hear what you’re thinking.” Talking who people who are pro-project, people who are anti-project, talking transparency.
From a Canadian perspective and here I’ve tried to avoid editorializing, I will now get on my soapbox and editorialize. Canadians don’t do transparency well. Our default in government is no. Our default is you can’t have that information. We’ve got to get over that. Transparency is the great trust builder, and for big projects to happen, we’ve got to build trust. So transparency is absolutely essential.
SEAN SPEER: Final question. What do you think of the argument that one of the main reasons that projects seem to take longer and cost more is that we’ve become collectively more risk averse, that well-intended processes and rules around social licenses that we’ve been discussing, or safety, or any number of interests that in and of themselves may be justified, have contributed to an overall environment in which it just takes longer and costs more to get things done?
Have we, in effect, gotten the trade-off between efficiency and other important priorities wrong? And if so, how do we restore a collective sense of confidence and overcome this risk aversion that may be part of the explanation behind what your book is documenting?
DAN GARDNER: Yeah. So first, I think it’s very fair to say that—I mean, yes is the short answer. Yes, we are more risk-averse. We just have to look at, for example, environmental regulation. The very fact that you have environmental reviews, the very fact that you’re not allowed to just dump whatever happens to be in your barrels into the river, is a level of risk aversion that was not there in the past, to which one can only say good. That is a good thing. I think we have learned from experience to be more cautious, for example, about environmental effects because we understand now that they can have knock-on effects that we don’t see now. We’ve learned to be more cautious, and that’s all to the good. The question is whether that risk aversion goes too far in particular circumstances. And I would be—one of the things that drives me—sorry, I just said I don’t want to editorialize but I’m going to have to editorialize a second time.
People often talk about regulation as if it were like this fungible substance. “We need more regulation. We need less regulation.” It’s not goo, okay? It’s not fungible. Some regulations are smart and important, and valuable; some regulations are stupid. So if you want to examine the regulations in particular instances and you say to yourself, “Look, we need to build things more, let’s conduct a rigorous review, looking for regulations that we can reduce without harmful impact.” That’s a very sensible approach, but I would not support some sort of blanket, “We need to repeal regulation,” or anything like that; that’s ridiculous.
That’s number one point. Number two point is risk and risk aversion. They depend on what exactly you’re dealing with. So, for example, if you are building a giant project in response to the greatest environmental threat of our century, climate change, and you sincerely believe that climate change is a danger to our species and all the other species on this planet, it may even threaten our civilization. As I do, I believe that. Then you should be prepared to adjust your scale of acceptable risk, right? You should be prepared to accept greater cost, and that includes risk, in order to try to mitigate that threat. So, for example, with nuclear, just to use nuclear as the issue of safety, environmentalists—not all, but many environmentalists—have been anti-nuclear because of their safety concerns. I don’t share those concerns, but there they are.
If you have those concerns, and you’ve had those concerns for decades, but along comes climate change, and you say, “Hey, we’re facing an existential threat,” Well, you should be prepared to adjust your calculation, right? Because if this is an effective tool for dealing with the climate change threat, but that means increased risk of the safety concerns that you have, then, well, you need to ask yourself, “Does the climate change threat rise to the level where it now means that those risks are acceptable?” We should always remember what is an acceptable risk varies according to circumstance. It’s a bit of a struggle for me to talk about these issues in the abstract because I’m a big believer in the particular. It’s the concrete details that matter to the calculation. But we should always be prepared to ask ourselves, “What is an acceptable risk?” And that is determined by the particular circumstances of what we’re trying to do.
SEAN SPEER: Well, that’s precisely the kind of insight and precision one can find in the book How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything In Between. Dan Gardner, thank you so much for joining us at Hub Dialogues.
DAN GARDNER: Thanks, Sean. It was fun.
