Successfully managing a complex, major project with a budget exceeding $1 billion – or even $5 billion – can be career-defining. But such projects are plagued by a track record of poor outcomes; the average one finishes a year behind schedule and runs 30 percent over budget.
So, what did it take to successfully build an ancient pyramid or, more recently, a liquefied natural gas facility involving complicated strategy, design, financing, procurement and execution?
Much research on capital project delivery has focused on the “science” of project management, related to processes, systems, tools and technical mastery. These elements are indeed critical to a project’s success.
However, in McKinsey’s “The art of project leadership: delivering the world’s largest projects,” we argue that leaders have not paid sufficient attention to the “soft” organizational and leadership elements of project delivery: the mindsets, practices, behaviours and culture needed for success.
As Jack Futcher, Bechtel’s president and chief operating officer, told us in that 2017 report: “Process does not deliver projects; leadership does, and has to trump process.” But the reality is that these factors can prove the most difficult to embed within an organization.
Any large project’s outcome depends mainly on how well a team works together. Constructive team mindsets trigger good decisions and strong trust-based relationships, which lead to high team morale and excellent performance. Our research identified four distinct mindsets that help determine an ultra-large project’s outcome – and corresponding “deadly sins” that can derail it.
- Lead as a business, not as a project. An ultra-large project is more akin to building a business than executing a construction project, requiring CEO-level leadership and judgment to address a broad range of organizational issues.
Deadly sin: Failing to inspire the team – e.g., “This is the way we have always run projects.” - Take full ownership of outcomes. The project owner must maintain full accountability for delivery, remaining well-informed throughout and ready to step in to make tough decisions in a timely manner.
Deadly sin: Believing you can delegate delivery – “It’s the contractor’s job to bring the project in on time and on budget.” - Make your contractor successful. Owners and contractors work best as a business partnership with a mindset of “We win together or lose together.” Productive contractor-owner relationships are based on mutual trust and joint problem solving.
Deadly sin: Blaming the contractor and not solving the problem – “The contractor is underperforming, so we need to ramp up pressure.” - Trust your processes but know that leadership is required. Processes alone won’t resolve every challenge on an ultra-large project. Leaders should trust and enforce the appropriate process, but also recognize their benefits and limitations.
Deadly sin: Blindly following processes – “I like your idea but I know the project manager won’t consider it, since it doesn’t follow process.”
These mindsets must be adopted—and sins avoided—across the project organization and the broader owners’ team. Owners and project directors should create an environment in which these mindsets shape the way the team approaches its day-to-day work and how members interact with one another, with contractors and with other stakeholders.
With the right mindsets in place, it is equally critical to implement the right leadership practices in project setup and delivery, which we will explore in a subsequent post.