Frederico costa project management


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Project Failure: Sydney Opra House

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Frederico costa project management

  1. 1. [PROJECT MANAGEMENT:PROJECT FAILURES – SYDNEY OPERA HOUSE March 1, 2012 PROJECT MANAGEMENT: PROJECT FAILURES Sydney Opera House University of Salford 2012 Frederico Costa @00255034 Business Studies with IT University of Salford | Project Management 1
  2. 2. [PROJECT MANAGEMENT:PROJECT FAILURES – SYDNEY OPERA HOUSE March 1, 2012CONTENTSIntroduction p.3History p.3 – 4Stakeholders p.4 – 7Stakeholder classification p.5Stakeholder Power/Interest Grid p.7Causes for project failure p.8-10Lack of risk management p.9Unrealistic timescale and Cost escalation p.10Recommendations p.10 – 14Risk Management p.11Forecasting p.11 – 12Stakeholder Engagement p.12 – 14Conclusion p.14References p.15 - 16 University of Salford | Project Management 2
  3. 3. [PROJECT MANAGEMENT:PROJECT FAILURES – SYDNEY OPERA HOUSE March 1, 2012IntroductionFor this assignment the project chosen to critically analyse its failure is the Sydney Opera House.Critically analysing its failure and its consequences and identifying bad project managementprocedures made me look into this project intensively and evaluate it as a project failure with a“happy end”.This assignment will be divided in three main parts which are History where it will be explained whatthe Sydney Opera house is and what was the purpose of the project, a Stakeholders section wherethe key stakeholders will be identified and discussed, a Project Failure section identifying what badmanagement procedures were taken and for last there will be a Recommendations sectionrecommending new procedures to avoid an over budget and over timed project, which this is partof.For the architect - Jorg Utzon – it is his “masterpiece”, to Australia as a country it is theirrepresentative monument as World Heritage (Design5 final report 2010). Although project managerand client are now “happy” with the final product it can still be considered as a project failure due toa huge overrun budget and over timed project with consequences that are still being repaired,almost 40 years later.HistoryIn 2003 Utzon is awarded with the Pritzker, the architecture’s “Nobel”. It was said of Sydney OperaHouse (from now on in this assignment also known as ‘SOH’) that it is one of the great iconicbuildings of the twentieth century (Murray, P. 2004). It all started in 1957 when Utzon were chosento be the architect for this project. Everything was going according with the project but two yearsafter the new elected government (not the one that agreed with Utzon’s project) was getting University of Salford | Project Management 3
  4. 4. [PROJECT MANAGEMENT:PROJECT FAILURES – SYDNEY OPERA HOUSE March 1, 2012impatient. More and more companies were being put into the project (in the final more than 165companies, suppliers included, contributed to this project) and the costs were being added and thenew government was pressing Utzon as much as the media trying to cut in costs and speed up theproject*. They also decided to change the previous project after its construction as started and nowinstead of 2 theatre rooms they wanted 4*.Utzon was losing control of the situation and had anundesirable pressure under him. The initial cost was (Aus) 7 million dollars and in the end it has cost(Aus) 102 million dollars and a total of 14 years to be constructed, 6 more than it should be*. TheArup, engineers contracted for the engineering part stayed until the end of the project but Utzonleft in the end , after designing the roof but not concluding. It was hard to keep two of the keystakeholders happy, the minister David Hughes and the SOHEC – Sydney Opera House ExecutiveCommittee so he decided to quit blaming the first of lack of cooperation but in fact even theacoustic consultants did not agree between each other (Murray, 2004 :66) and as a result of all thesechanges of plans and misunderstandings the Sydney Opera House – finished by three local architects– still did not had the proper acoustic, which was the first main factor that lead to a new operahouse*.Nowadays the Sydney Opera House is already seen as profitable since its cost was already coveredby the revenue made from customers (tourists mainly) but further improvements on accessingconditions were taken.StakeholdersBefore going back to the subject it is needed to take into account that a failed project is a projectthat is cancelled before completion, never implemented, or damaged in some way. Other reasonsthat why projects fail are an absence of commitment, a bad project organisation and planning, a badtime management, lack of managerial control, extra costs among other problems. Among all thesereasons the Stakeholders play a big part in the projects that they are involved and sometimes aproject can go wrong depending on decisions taken by these groups.To start this stage of the assignment it is essential to identify the stakeholders – all the users thatdirectly or indirectly affect positively or negatively – the project. (Polychronakis, 2011)The analysis will be assisted from the article “Toward a theory of a stakeholder identification andsalience: Defining the principle of whom and what really counts”, determining which of thestakeholders hold which of its three attributes, one can identify stakeholders. Then Stakeholders canbe analysed by its salience. Explaining briefly the three attributes power enables to act despiteresistance of others, legitimacy is being seen as acting appropriately within context norms andurgency relates to time sensitivity and importance of the stakeholder (Mitchell 1997). University of Salford | Project Management 4
  5. 5. [PROJECT MANAGEMENT:PROJECT FAILURES – SYDNEY OPERA HOUSE March 1, 2012Stakeholder Classification Power Legitimate Urgent TypeStakeholder ClassificationNSW Government Power Legitimate Urgent Type x x x DefinitivePublic Works, David Hughes x x DangerousUtzon x x DangerousArup x x DominantSOHEC x x DominantDesign Team x x DependentEngineer Team x x DependentConsultants x x DependentSuppliers x x DependentContractor x x DependentHall, Todd, Littlemore (Three architects hired) x x DependentConstruction Workers x x Dependent DiscretionarPublic/Customers x yMedia x x x Dangerous There are 14 main stakeholders: NSW Government – Can be considered the client so its type is definitive, has the power to over ask and the project manager has to show urgency on keeping him happy. David Hughes – Having the role of Public Works minister for the new NSW government he has dealt directly with the project having the power to influence it and as a client’s representative has the same urgency status. Is considered Dangerous because although is not definitive (could be replaced for example) he affects directly the project as client representative (pressuring Utzon till he resigned) University of Salford | Project Management 5
  6. 6. [PROJECT MANAGEMENT:PROJECT FAILURES – SYDNEY OPERA HOUSE March 1, 2012Utzon – Being the project manager and architect he presented the project and designed it so he haspower on the project itself and on the staff. He has an urgent characteristic because he continuouslyneeds to keep on track of the project’s milestones and delivery dates.Arup – as the engineers company they have some power on the project but no urgency at all sincethey work when it is told to but is legitimated to act within the norms but couldn’t deliberatelychange anything and was socially accepted. Is dominant because has a key role in the project.SOHEC – Although it has the power to demand certain characteristics and has legitimacy in theproject it doesn’t have big urgency since it isn’t a client but a client’s influencer. Good to keepinformed.Working staff (remaining stakeholders) – They don’t have great power but they are dependent onmilestones so also they have the urgency to meet expectations. They also have their legitimatenesssince they depend on each other and need to coordinate their designed areas. Hall, Todd andLittlemore, the three architects that replaced Utzon don’t have any power since everything wasplanned and they only needed to re-design the roof in a way that could match the foundations.Public/Customers – Since they are “watching” delays and over costs being paid from their taxes theyare on the legitimate attribute because they are on the “socially accepted and expected behaviours”side (Mitchell 1997).Media – Has the indirect power of showing a project as a project success or failure. Meets theparameters of the legitimate attribute expecting behaviours and has the urgency of being timesensitive (generating news with the project delay).The main stakeholder was the architect, but Utzon was much more concerned with the designaspect rather than time and costs objectives, which proved problematic. During the project, Utzoncollaborated with Ove Arup, who was in charge of the structure and the engineering whilesubcontractors were in charge of mechanics, electrics, heating and ventilating, lighting andacoustics. There was no real project manager, but rather collaboration between Utzon and Arup.The other main stakeholder was the client, the state of New South Wales (Australian government).Aexecutive committee was created to provide project supervision but the members had no realtechnical skills. The government eventually became an obstacle to the project team by inhibitingchanges during the progress of the operations and thus contributed to cost overrun and delays.Finally, the public and media was an indirect stakeholder because they were concerned with theproject’s success.Defining INTERNAL AND EXTERNAL STAKEHOLDERS.External stakeholdersThe external stakeholders can be considered as anyone outside the implementing organisations whocould be affected by the project’s results. University of Salford | Project Management 6
  7. 7. [PROJECT MANAGEMENT:PROJECT FAILURES – SYDNEY OPERA HOUSE March 1, 2012Internal StakeholdersInternal stakeholders are those associated with the process, typically members of the project teamor the governance structure.After describing what internal and external stakeholders are, it can be specified what stakeholdersneed more attention, or in other words, need to be ‘more’ satisfied.It is known that it’s impossible to keep all the stakeholders happy at the same time so the followingpicture will show that it was essential to keep NSW government and Mr. David Hughes happy (areminder to say that the relationship between Utzon and David Hughes wasn’t good). Therelationship with Arup should be stronger in order to have a better performance linking‘departments’. As a result (of not doing it) the roof couldn’t match the foundations created by Arup(the roof was too heavy for the foundation’s material) and the amount of resources would not be somany times recalculated, it would have minimized the time spent and the money wasted.The relation with the media should also be managed better. The relationship between stakeholderswas too ‘transparent’ and what was meant to be a huge partner advertising the project ended uppulling down the project in terms of future customer’s point of view (customers would be driven bythe media and associate the Sydney Opera House negatively).Also the relationship with the SOHEC could be better driven since it was the major beneficiatedwithin the project. They did not pay for it (the government did) and they were represented by theones that would use it the most but what was hope was turned into despair. University of Salford | Project Management 7