Bent Flyvbjerg Quotes

We’re good at learning by tinkering—which is fortunate, because we’re terrible at getting things right the first time.

Infrastructure is the great space shrinker, and power, wealth and status increasingly belong to those who know how to shrink space, or know how to benefit from space being shrunk.

Communicative and deliberative approaches work well as ideals and evaluative yardsticks for decision making, but they are quite defenceless in the face of power.

Small is good. For one thing, small projects can be simple.

Megaproject development today is not a field of what has been called ‘honest numbers’.14 It is a field where you will see one group of professionals calling the work of another not only ‘biased’ and ‘seriously flawed’ but a ‘grave embarrassment’ to the profession.

Also, the technologically high-risk Apollo aerospace programme is considered a classic success story of megaproject planning and implementation. The cost overrun on this US$21 billion project was only 5 per cent. Few know, however, that the original budget estimate included US$8 billion of contingencies.18 By allowing for risk with foresight, the programme avoided ending up in the type of large cost overrun that destabilises many major projects during implementation. The Apollo approach, with its realistic view of risks, costs and contingencies, should be adopted in more major projects.

Abraham Lincoln is reputed to have said that if he had five minutes to chop down a tree, he’d spend the first three sharpening the ax.[29] That’s exactly the right approach for big projects: Put enormous care and effort into planning to ensure that delivery is smooth and swift. Think slow, act fast: That’s the secret of success.

Uncertainty in estimating viability is related in this way not only to the innate difficulty of predicting the future but also to power and interests.

I call such premature lock-in the “commitment fallacy.” It is a behavioral bias on a par with the other biases identified by behavioral science.

YOU WANT THE FLIGHT ATTENDANT, NOT THE PILOT, TO BE AN OPTIMIST

For want of a nail, the shoe was lost. For want of a shoe, the horse was lost. For want of a horse, the rider was lost. For want of a rider, the battle was lost. For want of a battle, the kingdom was lost.

Again, the more time that passes from decision to delivery, the greater the probability of one or more of these events happening. It’s even possible that trivial events, in just the wrong circumstances, can have devastating consequences.

But the cost of that haste was terrible, and not only in terms of cost overruns. Larsen was so appalled by the completed building that he wrote a whole book to clear his reputation and explain the confused structure, which he called a “mausoleum.” Haste makes waste.

Modularity is a clunky word for the elegant idea of big things made from small things. A block of Lego is a small thing, but by assembling more than nine thousand of them, you can build one of the biggest sets Lego makes, a scale model of the Colosseum in Rome. That’s modularity.

Cost underestimation and overrun have not decreased over the past seventy years. No learning seems to take place; • Cost underestimation and overrun cannot be explained by error and seem to be best explained by strategic misrepresentation, namely lying, with a view to getting projects started.

strong incentives and weak disincentives for cost underestimation and thus for cost overrun may have taught project promoters what there is to learn, namely that cost underestimation and overrun pay off. If this is the case, cost overrun must be expected and it must be expected to be intentional.

We have documented in this book that: • Cost overruns of 50 per cent to 100 per cent in real terms are common in megaprojects; overruns above 100 per cent are not uncommon; • Demand forecasts that are wrong by 20 per cent to 70 per cent compared with actual developments are common; • The extent and magnitude of actual environmental impacts of projects are often very different from forecast impacts. Post-auditing is neglected;

By now you know the solution to the puzzle I discussed at the end of the previous chapter: Only five project types—solar power, wind power, fossil thermal power, electricity transmission, and roads—are not fat-tailed, meaning that they, unlike all the rest, do not have a considerable risk of going disastrously wrong. So what sets the fortunate five apart? They are all modular to a considerable degree, some extremely so.

the scientist and philosopher Michael Polanyi showed, much of the most valuable knowledge we can possess and use isn’t like that; it is “tacit knowledge.” We feel tacit knowledge. And when we try to put it into words, the words never fully capture it. As Polanyi wrote, “We can know more than we can tell.

Projects are often started by jumping straight to a solution, even a specific technology. That’s the wrong place to begin. You want to start by asking questions and considering alternatives. At the outset, always assume that there is more to learn. Start with the most basic question of all: Why?

careful analysis like that done by David’s architect can be laborious and take ages, but if it is too narrowly focused, it won’t reveal fundamental flaws in the plan or gaps, much less correct them. And by its impressive detail, it may give the false idea that the overall plan is stronger than it is, like a beautiful facade with no structure behind it. Governments and bureaucratic corporations are good at churning out this sort of analysis.

In contrast, good planning explores, imagines, analyzes, tests, and iterates. That takes time. Thus, slow is a consequence of doing planning right, not a cause. The cause of good planning is the range and depth of the questions it asks and the imagination and the rigor of the answers it delivers. Notice that I put “questions” before “answers.” It’s self-evident that questions come before answers. Or rather, it should be self-evident. Unfortunately, it’s not. Projects routinely start with answers, not questions.

What Gehry means by questioning isn’t doubting or criticizing, much less attacking or tearing down. He means asking questions with an open-minded desire to learn. It is, in a word, exploration. “You’re being curious,” he says. That’s the opposite of the natural inclination to think that What You See Is All There Is (WYSIATI), the fallacy we saw in the previous chapter. In contrast, Gehry assumes that there must be more to learn. By making that assumption, he avoids the trap of the fallacy.

The officials told Gehry that they wanted a building that could do for Bilbao and the Basque Country what the Sydney Opera House had done for Sydney and Australia: put them on the map and bring back growth.

Projects are not goals in themselves. Projects are how goals are achieved. People don’t build skyscrapers, hold conferences, develop products, or write books for their own sakes. They do these things in order to accomplish other things.

At the beginning of a project, we need to disrupt the psychology-driven dash to a premature conclusion by disentangling means and ends and thinking carefully about what exactly we want to accomplish. Frank Gehry’s question, “Why are you doing this project?,” does that.

Developing a clear, informed understanding of what the goal is and why—and never losing sight of it from beginning to end—is the foundation of a successful project.

Silicon Valley is far removed from these worlds, yet the same basic idea is widely used in technology circles. “You’ve got to start with the customer experience and work backwards to the technology,” Steve Jobs told the audience at Apple’s 1997 Worldwide Developers Conference. “You can’t start with the technology and try to figure out how you’re going to try to sell it. I made this mistake probably more than anybody in this room, and I’ve got the scar tissue to prove it.”9 Today, “work backwards” is a mantra in Silicon Valley.

By carefully working through what must be done to get to their goal, the logic that surfaced midconstruction and convinced David and Deborah to make piecemeal expansions of the project will instead surface up front in a conversation about what other renovations they might consider. And if major work is under way and they would have to move out anyway, would it not make sense to also consider other work they might want to do in the future? To get it all over with at once. Plus it’s cheaper to have workers come on-site once and do many jobs rather than come back multiple times.

BEING FIRST The ambition to be the first with something is another way experience gets sidelined.

The only upside to the misery was that those who went second, third, and fourth could study our experience and do better. But did they? Probably not. Similar large-scale IT projects continue to be deeply troubled. Planners don’t value experience to the extent they should because they commonly suffer yet another behavioral bias, “uniqueness bias,” which means they tend to see their projects as unique, one-off ventures that have little or nothing to learn from earlier projects.5 And so they commonly don’t.

But the first-mover advantage is greatly overstated. In a watershed study, researchers compared the fates of “pioneer” companies that had been the first to exploit a market and “settlers” that had followed the pioneers into the market. Drawing on data from five hundred brands in fifty product categories, they found that almost half of pioneers failed, compared to 8 percent of settlers. The surviving pioneers took 10 percent of their market, on average, compared to 28 percent for settlers. Getting into the market early was indeed important—“early market leaders have much greater long-term success,” the researchers noted—but those “early” market leaders “enter an average of 13 years after pioneers.”7 The consensus of researchers today is that, yes, being first to market can confer advantages in certain specific circumstances, but it comes at the terrible cost of an inability to learn from the experience of others.

If we see technology this way, it is clear that, other things being equal, project planners should prefer highly experienced technology for the same reason house builders should prefer highly experienced carpenters. But we often don’t see technology this way. Too often, we assume that newer is better. Or worse, we assume the same of something that is custom designed, which we praise as “unique,”“bespoke,” or “original.” If decision makers valued experience properly, they would be wary of a technology that is new, because it is inexperienced technology

later. As previously mentioned, that practical wisdom is what Aristotle called “phronesis.” He held it in higher regard than any other virtue, “for the possession of the single virtue of phronesis will carry with it the possession of them all [i.e., all the relevant virtues],” as he emphasized.25 In short, if you have phronesis, you’ve got it all. Therefore, a project leader with abundant phronesis is the single greatest asset a project can have. If you have a project, hire a leader like that.

Planning is working on the project. Progress in planning is progress on the project, often the most cost-effective progress you can achieve.

As simple as it should be in theory to judge projects, in practice it’s anything but. In every big project, there are blizzards of numbers generated at different stages by different parties. Finding the right ones—those that are valid and reliable—takes skill and work. Even trained scholars get it wrong.[4] And it doesn’t help that big projects involve money, reputations, and politics. Those who have much to lose will spin the numbers, so you cannot trust them. That’s not fraud. Or rather, it’s not usually fraud; it’s human nature. And with so many numbers to choose from, spinning is a lot easier than finding the truth.

Drawing on data from five hundred brands in fifty product categories, they found that almost half of pioneers failed, compared to 8 percent of settlers. The surviving pioneers took 10 percent of their market, on average, compared to 28 percent for settlers. Getting into the market early was indeed important—“early market leaders have much greater long-term success,” the researchers noted—but those “early” market leaders “enter an average of 13 years after pioneers.

The consensus of researchers today is that, yes, being first to market can confer advantages in certain specific circumstances, but it comes at the terrible cost of an inability to learn from the experience of others. Better to be—like Apple following Blackberry into smartphones—a “fast follower” and learn from the first mover.

phronesis

We therefore conclude that cost overrun has not decreased over time. Cost overrun today is in the same order of magnitude as it was ten, thirty or seventy years ago. If techniques and skills for estimating costs and avoiding cost overrun in transport infrastructure projects have improved over time, this does not show in the data. No learning seems to take place in this important and highly costly sector of public and private decision making.

Nevertheless, with respect to cost development, there is a striking similarity between these and other major projects: there is a tendency towards a significant underestimation of costs during project appraisal. This is also the conclusion we draw when we review data from a large number of major transport infrastructure projects, and from other types of project as well.

We would add to this that regarding cost overruns there is no indication that the calamity identified by the Major Projects Association is limited to the public sector. Private sector cost overruns are also common.

The cost estimate of the prospectus turned out to be a best possible outcome based on the unlikely assumption that everything would go according to plan with no delays, no changes in performance specifications, no management problems, no problems with contractual arrangements or new technologies or geology, no major conflicts, no political promises not kept, and so on.

Marketers often make use of this phenomenon. When you encounter a “limit six per customer” sign at the grocery store, there’s a good chance that the sign is there to expose you to the number six, making it the anchor when you decide how many items to buy.

so realism was seen as pessimism and ignored. Such behavior is as common as bad anchoring and reinforces it.

Wealth, for example, is fat-tailed. At the time of writing, the wealthiest person in the world is 3,134,707 times wealthier than the average person. If human height followed the same distribution as human wealth, the tallest person in the world would not be 1.6 times taller than the average person; he would be 3,311 miles (5,329 kilometers) tall, meaning that his head would be thirteen times farther into outer space than the International Space Station.

However, for people such as CEOs and venture capitalists—and even governments—what matters isn’t the performance of any one project but how a whole portfolio of projects performs. For them, it may be fine to take big losses on 80 percent of projects as long as the gains from the 20 percent of projects that deliver Hirschman’s happy ending are so big that they more than compensate for the losses. So I checked the data and found that the results were equally clear: Losses far exceeded gains. Whether it’s the average project or a portfolio of projects, Hirschman’s argument just doesn’t hold up.

Heuristics are fast and frugal rules of thumb used to simplify complex decisions. The word has its origin in the ancient Greek word Eureka!, the cry of joy and satisfaction when one finds or discovers something.

HIRE A MASTERBUILDER I sometimes say that this is my only heuristic because the masterbuilder—named after the skilled masons who built Europe’s medieval cathedrals—possesses all the phronesis needed to make your project happen. You want someone with deep domain experience and a proven track record of success in whatever you’re doing,

GET YOUR TEAM RIGHT This is the only heuristic cited by every project leader I’ve ever met.

SAY NO AND WALK AWAY Staying focused is essential for getting projects done. Saying no is essential for staying focused. At the outset, will the project have the people and funds, including contingencies, needed to succeed? If not, walk away. Does an action contribute to achieving the goal in the box on the right? If not, skip it. Say no to monuments. No to untested technology. No to lawsuits. And so on. This can be difficult, particularly if your organization embraces a bias for action.

MAKE FRIENDS AND KEEP THEM FRIENDLY

Don’t assume you know all there is to know. If you’re a project leader and people on your team make this assumption—which is common—educate them or shift them out of the team. Don’t let yourself or them draw what appear to be obvious conclusions. That sort of premature commitment puts you at risk of missing not only glaring flaws but also opportunities that could make your project much better than what you have in mind now.

At first, commit to having an open mind; that is, commit to not committing.

You’re being curious,” he says. That’s the opposite of the natural inclination to think that What You See Is All There Is (WYSIATI), the fallacy we saw in the previous chapter. In contrast, Gehry assumes that there must be more to learn. By making that assumption, he avoids the trap of the fallacy.

I call this “thinking from right to left.” But many other people working in different fields have identified similar notions and used different language to describe what is fundamentally the same idea. “Backcasting” is used in urban and environmental planning. Originally developed by University of Toronto professor John B. Robinson to deal with energy problems, backcasting starts by developing a detailed description of a desirable future state; then you work backwards to tease out what needs to happen for that imagined future to become reality.[7] One backcasting exercise that looked at California’s water needs started by imagining an ideal California twenty-five years in the future, then asked what would have to happen—to supply, consumption rates, conservation, and so on—to make that happy outcome real.[8] “Theory of change” is a similar process often used by government agencies and nongovernmental organizations (NGOs) that seek social change, such as boosting literacy rates, improving sanitation, or better protecting human rights. Again, it starts by defining the goal and only then considers courses of action that could produce that outcome. Silicon Valley is far removed from these worlds, yet the same basic idea is widely used in technology circles. “You’ve got to start with the customer experience and work backwards to the technology,” Steve Jobs told the audience at Apple’s 1997 Worldwide Developers Conference. “You can’t start with the technology and try to figure out how you’re going to try to sell it. I made this mistake probably more than anybody in this room, and I’ve got the scar tissue to prove it.”[9] Today, “work backwards” is a mantra in Silicon Valley.

Projects are pitched in a one-hour meeting with top executives. Amazon forbids PowerPoint presentations and all the usual tools of the corporate world, so copies of the PR/FAQ are handed around the table and everyone reads it, slowly and carefully, in silence. Then they share their initial thoughts, with the most senior people speaking last to avoid prematurely influencing others. Finally, the writer goes through the documents line by line, with anyone free to speak up at any time. “This discussion of the details is the critical part of the meeting,” wrote Colin Bryar and Bill Carr, two former Amazon executives. “People ask hard questions. They engage in intense debate and discussion of the key ideas and the way they are expressed.

People are terrible at getting things right the first time. But we’re great at tinkering. Wise planners make the most of this basic insight into human nature. They try, learn, and do it again. They plan like Pixar and Frank Gehry do.

EXPERIRI “Planning” is a concept with baggage. For many, it calls to mind a passive activity: sitting, thinking, staring into space, abstracting what you’re going to do. In its more institutional form, planning is a bureaucratic exercise in which the planner writes reports, colors maps and charts, programs activities, and fills in boxes on flowcharts. Such plans often look like train schedules, but they’re even less interesting.

It is captured by a Latin verb, experiri. Experiri means “to try,” “to test,” or “to prove.” It is the origin of two wonderful words in English: experiment and experience.

A bad plan is one that applies neither experimentation nor experience.

It has haunted me,” he explained to a TV interviewer. “People who’ve seen The Simpsons believe it.”[17] Frank Gehry is indeed a genius, but everything else about that image of how he works is wrong. In fact, it’s the opposite of the truth.

First, iteration frees people to experiment, as Edison did with such success. “I need the freedom to just try a bunch of crap out. And a lot of times it doesn’t work,” Docter told me. With this process, that’s fine. He can try again. And again. Until he gets something that burns bright and clear, like Edison’s lightbulb. “If I knew I have to do this only once and get it right, I’d probably hew to the things that I know work.” And for a studio built on creativity, that would be a slow death. Second, the process ensures that literally every part of the plan, from the broad strokes to the fine details, is scrutinized and tested. Nothing is left to be figured out when the project goes into delivery. This is a basic difference between good and bad planning. In bad planning, it is routine to leave problems, challenges, and unknowns to be figured out later. That’s how the Sydney Opera House got into trouble. In that case, Jørn Utzon did eventually solve the problem, but it was too late. The budget had exploded, construction was years behind schedule, and Utzon was ousted with his reputation in tatters. In many projects, the problem is never solved.

Third, an iterative process such as Pixar’s corrects for a basic cognitive bias that psychologists call the “illusion of explanatory depth.” Do you know how a bicycle works? Most people are sure they do, yet they are unable to complete a simple line drawing that shows how a bicycle works. Even when much of the bicycle is already drawn for them, they can’t do it. “People feel they understand complex phenomena with far greater precision, coherence, and depth than they really do,” researchers concluded. For planners, the illusion of explanatory depth is obviously dangerous. But researchers also discovered that, unlike many other biases, there is a relatively easy fix: When people try and fail to explain what they mistakenly think they understand, the illusion dissolves. By requiring Pixar film directors to walk through every step from the big to the small and show exactly what they will do, Pixar’s process forces them to explain. Illusions evaporate long before production begins, which is when they would become dangerous and expensive.[24]

That brings us to the fourth reason why iterative processes work, which I touched on in chapter 1: Planning is cheap. Not in absolute terms, perhaps. The rough videos Pixar produces require a director leading a small team of writers and artists. Keeping them all working for years is a significant cost.

Semantics aside, the only real difference is the method of testing. If there were no other considerations involved, such as money, safety, and time, the ideal testing method would be to simply do whatever it is you are thinking of doing in the real world with real people, and see what happens.

How does experience make people better at their jobs? Ask someone that question, and you’ll likely hear that with experience people know more. That’s true as far as it goes. People who work with a tool learn how to use it, so they gain knowledge such as “The safety lock must be turned off before the tool can start.” You don’t actually need experience to get that sort of knowledge. Someone can just tell you, or you can find it in a manual; it is “explicit knowledge.” But as the scientist and philosopher Michael Polanyi showed, much of the most valuable knowledge we can possess and use isn’t like that; it is “tacit knowledge.” We feel tacit knowledge. And when we try to put it into words, the words never fully capture it. As Polanyi wrote, “We can know more than we can tell.”[21]

say why they felt the way they did.[22] This is “skilled intuition,” not garden-variety gut feelings, which are unreliable. It is a powerful tool available only to genuine experts—that is, people with long experience working in their domain of expertise.[23]

That should be obvious. But when things go wrong and people get desperate, the obvious is often overlooked, and it’s assumed that if delivery fails, the problem must lie with delivery, when in fact it lies with forecasting.

In psychology, the process Caro used to create his forecast is known as “anchoring and adjustment.”[6] Your estimate starts with some fixed point, twelve chapters of three weeks each in Caro’s case. That’s the “anchor.” Then you slide the figure up or down as seems reasonable, to one year for Caro. That’s “adjustment.” Caro was exactly right to call his thinking “naïve but perhaps not unnatural” because, as abundant research shows, anchoring and adjustment, particularly when immediate experience is used as the anchor, is a natural way of thinking. It’s likely that most people in Caro’s position, with his specific experience, would have made a forecast the same way and come up with a similar result. But basing forecasting on anchoring and adjustment is tricky. As psychologists have shown in countless experiments, final estimates made this way are biased toward the anchor, so a low anchor produces a lower estimate than a high anchor does. That means the quality of the anchor is critical. Use a good anchor, and you greatly improve your chance of making a good forecast; use a bad anchor, get a bad forecast.

This is all uniqueness bias talking, wanting to be reintroduced into your decisions when you’re trying to eliminate it. Don’t listen to it. Keep the process simple: Define the class broadly. Err on the side of inclusion. And adjust the average only when there are compelling reasons to do so, which means that data exist that support the adjustment. When in doubt, skip adjustment altogether. The class mean is the anchor, and the anchor is your forecast. That’s very simple, yes. But simple is good; it keeps out bias.

But when you work on a joint project with people from many companies, which squad are you playing for? Who are your teammates? Teams are identities. To truly be on one, people must know it. So BAA gave everyone working on T5, including its own employees, a clear and emphatic answer: Forget how things are usually done on big projects. Your team is not your company. Here, your team is T5. We are one team. Wolstenholme is an engineer with decades of experience in construction, but he started his career in the British military, where the squad you play for is literally on your forehead—in the form of your unit’s “cap badge.” When people came to T5, Wolstenholme says, they were told, “Take off your cap badge and throw it away, because you work for T5.” That message was explicit, blunt, and repeated. “We had posters on the walls of people with lightbulbs going on, and they were saying, you know, ‘I get it. I work for T5.’ ” MAKING HISTORY Identity was the first step.

To understand the right way to get a project done quickly, it’s useful to think of a project as being divided into two phases. This is a simplification, but it works: first, planning; second, delivery. The terminology varies by industry—in movies, it’s “development and production”; in architecture, “design and construction”—but the basic idea is the same everywhere: Think first, then do.

Think slow, act fast” may not be a new idea. It was on grand display back in 1931, after all, when the Empire State Building raced to the sky. You could even say that the idea goes at least as far back as Rome’s first emperor, the mighty Caesar Augustus, whose personal motto was “Festina lente,” or “Make haste slowly.

That is, sadly, typical. On project after project, rushed, superficial planning is followed by a quick start that makes everybody happy because shovels are in the ground. But inevitably, the project crashes into problems that were overlooked or not seriously analyzed and dealt with in planning. People run around trying to fix things. More stuff breaks. There is more running around. I call this the “break-fix cycle.” A project that enters it is like a mammoth stuck in a tar pit.

Except they did. Less than a mile south of the Arlington Farm site and just outside Arlington Cemetery’s spectacular vista lay the “Quartermaster Depot” site. It met all the technical requirements. Somervell’s critics identified the site and fought to move the project there. Eventually, they won. That’s where the Pentagon is today. Not only did that site leave the view from Arlington Cemetery unsullied; the size of the site allowed the architects to even up the sides of the building and make it symmetrical. That made the building more functional, cheaper to build, and a lot less ugly.

The closer a project is to that situation, the more individual psychology will dominate, which is what Kahneman, Amos Tversky, and other behavioral scientists have found. But as projects get bigger and decisions more consequential, the influence of money and power grows. Powerful individuals and organizations make the decisions, the number of stakeholders increases, they lobby for their specific interests, and the name of the game is politics. And the balance shifts from psychology to strategic misrepresentation.[8

This is typical of the planning of big projects. It’s just not suitable for the sort of quick-and-intuitive decision making that comes naturally to us. But all too often we apply it anyway—because it comes naturally to us. If we are routinely biased toward snap judgments and unrealistic optimism and these methods fail to deliver, we will suffer. Shouldn’t we learn from those painful experiences? We should indeed. But to do that, we must pay attention to experience. And unfortunately, too often we do not.

It is also inapplicable to many decisions on big projects because they are so difficult or expensive to reverse that they are effectively irreversible: You can’t build the Pentagon, then knock it down and build it elsewhere after you discover that it ruins the view. When this bias for action is generalized into the culture of an organization, the reversibility caveat is usually lost. What’s left is a slogan—“Just do it!”—that is seemingly applicable in all situations. “When we surveyed participants in our executive education classes, we found that managers feel more productive executing tasks than planning them,” observed business professors Francesca Gino and Bradley Staats. “Especially when under time pressure, they perceive planning to be wasted effort.

Get the work rolling, involve actors contractually, build sets, collect props and costumes, expose negative, and so get the studio in deep. Once money in some significant amount had been spent, it would be difficult for Harry [Cohn, president of Columbia Pictures] to do anything except scream and holler. If he suspended a film that had been shooting for weeks, he’d be in for an irretrievable loss, not only of money but of ‘face.’ The thing to do was to get the film going.

Somervell was little concerned with cost overruns,” as Steve Vogel noted.[36] And like Willie Brown, Somervell was determined to “start digging a hole,” knowing that the existence of a big enough hole would ensure his project’s future. Somervell was also steeped in a “can-do” army engineering culture that prized System One decisiveness and getting stuff done above all else.

Some tails are simple to cut. Tsunamis are fat-tailed, but if you build well inland or erect a high enough seawall, you eliminate the threat. Earthquakes are also fat-tailed, but build to an earthquake-proof standard, as we did with the schools in Nepal, and you are covered. Other tails require a combination of measures; for a pandemic, for instance, a blend of masks, tests, vaccines, quarantines, and lockdowns to prevent infections from running wild.[25] That’s black swan management. For

The later a delay comes, the less remaining work there is and the less the risk and impact of a chain reaction. President Franklin Roosevelt got it right when he said, “Lost ground can always be regained—lost time never.”[28] Knowing this, we advised measures that would cut the probability of early delays and chain reactions.

There’s a reason for that. The government here mismanaged the planning and construction of the Sydney Opera House so badly that the costs and schedule exploded. Little of that was Utzon’s fault. But he was the architect, so he was blamed and fired midconstruction. He left Australia in secret and in disgrace. His reputation was ruined. Instead of being showered with commissions to build more masterpieces, Utzon was marginalized and forgotten. He became what no masterbuilder wants to be or deserves to be. He became a one-building architect.[16] “What you call the costs are not the full costs,” I continued. “Yes, the Sydney Opera House cost a large amount of money, far more than it should have. But the full cost of that building includes all the other architectural treasures that Jørn Utzon never built. Sydney got its masterpiece, but cities around the world were robbed of theirs.” More silence. There are always other costs—costs that never appear on any spreadsheet—when a project spirals out of control. The simplest are what economists call “opportunity costs”: the money unnecessarily burned by bad planning that could have been used to fund something else, including other projects.

The word deadline comes from the American Civil War, when prison camps set boundaries and any prisoner who crossed a line was shot.[5] For BAA, the metaphor fit uncomfortably well.

But there’s a way around them. You just need to start over with a different perspective: See your project as one in a class of similar projects already done, as “one of those.” Use data from that class—about cost, time, benefits, or whatever else you want to forecast—as your anchor. Then adjust up or down, if necessary, to reflect how your specific project differs from the mean in the class. That’s it. It couldn’t be simpler.

Repetition also generates experience, making your performance better. This is called “positive learning,” as we saw earlier. Repetition rockets you up the learning curve, making each new iteration better, easier, cheaper, and faster. As the old Latin saying goes, “Repetitio est mater studiorum”—“Repetition is the mother of learning.” Yes, I wrote that in chapter 4. But repetition is the mother of learning.

Once the standards for finished work were agreed upon, skilled workers developed their own system of benchmarks to establish the quality of workmanship required for both themselves and everyone else to follow. Some 1,400 of these samples were photographed, cataloged, and put on display at the worksite. Because the benchmarks came from the workers, the workers took ownership of them, increasing the effectiveness of implementation.

What went wrong? Lasko and his team spent ages thinking about risk, but they never shifted their perspective from thinking of the Great Chicago Fire Festival as a unique project to seeing it as “one of those”; that is, part of a wider class of projects. If they had, they would have spent time thinking about live events. How do they fail? One common way is equipment failure. Mics don’t work. Computers crash. How is that risk mitigated? Simple: Identify essential equipment, get backups, and make contingency plans. That kind of analysis is dead easy—but only after you have shifted to the outside view. Notice that risk mitigation does not require predicting the exact circumstances that lead to disaster. Jim Lasko didn’t need to identify when and how the ignition system would fail, only recognize that it could. And have a Plan B if it did. Recall what Benjamin Franklin wrote in 1758: “A little neglect may breed great mischief.” This is why high safety standards are an excellent form of risk mitigation and a must on all projects. They’re not just good for workers; they prevent little things from combining in unpredictable ways into project-smashing black swans.

Growing complexity and interdependency may make such outcomes more likely in today’s world, but they are hardly a new phenomenon. A proverb that originated in the Middle Ages and comes in many forms tells us, “For want of a nail, the shoe was lost. For want of a shoe, the horse was lost. For want of a horse, the rider was lost. For want of a rider, the battle was lost. For want of a battle, the kingdom was lost.” This version was published by Benjamin Franklin in 1758, and he introduced it with the warning that “a little neglect may breed great mischief.

The Power Broker: Robert Moses and the Fall of New York

Scale and speed”; those are the key words. To win the fight against climate change, we must build at a scale and speed that put to shame the long, sorry record of the giant projects of the past. We can no longer afford bloated budgets and deadlines that keep sliding into the future. And we absolutely cannot have projects that never deliver what they promise.

In 2017, with oil and gas vanishing from its business, Ørsted took its new name in honor of the Danish physicist Hans Christian Ørsted, who discovered electromagnetism. Two years later, Anders Eldrup’s “impossible” 85/15 plan was achieved. It hadn’t taken a generation; it had taken ten years.[42] Again that was better than expected and a full fifteen years ahead of schedule, unheard of for conventional Big Energy projects. Over the same ten years, the percentage of Denmark’s electricity generated by fossil fuels fell from 72 percent to 24 percent, while the share contributed by wind power soared from 18 percent to 56 percent.[43] Some days, Danish wind turbines produce more electricity than the country can consume. The surplus is exported to neighboring nations.

Henrik Poulsen, who now advises an investment company, described how his firm recently bought a Danish company that makes control systems for wind farms: “Now we want to expand this company and we’re looking for companies that we could merge into this platform.” Naturally, they’re looking around the world. But the prospects they’ve found “are all located within a few hundred kilometers” of each other in Jutland. “Which is a bit crazy,” said Poulsen. Economic geographers like myself call this “clustering” or “economies of agglomeration.” It’s what happened for film in Hollywood in the 1920s and for tech in Silicon Valley in the mid–twentieth century. Jutland is now the Silicon Valley of wind energy—which is striking for a country whose population is just over half that of Los Angeles County.

Think of your project as “one of those,” gather data, and learn from all the experience those numbers represent by making reference-class forecasts. Use the same focus to spot and mitigate risks. Switching the focus from your project to the class your project belongs to will lead, paradoxically, to a more accurate understanding of your project.

WATCH YOUR DOWNSIDE It’s often said that opportunity is as important as risk. That’s false. Risk can kill you or your project. No upside can compensate for that. For fat-tailed risk, which is present in most projects, forget about forecasting risk; go directly to mitigation by spotting and eliminating dangers.

If something goes wrong, the project’s fate depends on the strength of those relationships. And when something goes wrong, it’s too late to start developing and cultivating them. Build your bridges before you need them.

Markets are complex systems. Energy production and distribution are complex systems. Manufacturing and transportation are complex systems. Debt is a complex system. So are viruses. And climate change. And globalization. On and on the list goes. If your project is ambitious and depends on other people and many parts, it is all but certain that your project is embedded in complex systems.

In the social sciences, “survivorship bias” is the common mistake of noting only those things that made it through some selection process while overlooking those that didn’t.

Good planning that sweeps away ignorance will indeed reveal difficulties ahead, but that is no reason to quit and walk away.