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If "clear strategic vision, total alignment, and adapting to complexity" makes megaprojects succeed, how does AY do?

This is the first of three posts reflecting on megaprojects and Atlantic Yards, responding to recent articles in Project Management Journal. Here are the second and third.

In the December 2017 issue of Project Management Journal, The Three Secrets of Megaproject Success: Clear Strategic Vision, Total Alignment, and Adapting to Complexity, by Aaron Shenhar and Vered Holzmann, has some indirect lessons for/about Atlantic Yards/Pacific Park.

The summary:
Past studies have often voiced concern that important megaprojects have repeatedly failed due to extensive overruns, misunderstanding of expectations, or both. In this article, we contend that this pattern may not be inevitable. In retrospect, despite painful delays, some megaprojects eventually achieved their longer-term objectives. In this study, rather than asking why megaprojects fail, we asked whether these notable (and rare) accomplishments have anything in common. We found that successful megaprojects are distinguished by three major elements: clear strategic vision, total alignment, and adapting to complexity.
What's a megaproject?

Does a real estate project, even colloquially referred to as a megaproject, really qualify? Well, the authors' list includes in the original World Trade Center, but focuses instead on areas including engineering, infrastructure, oil, aviation, information technology, shipping, and space. (Another article in the issue does include real estate projects like Hudson Yards and Atlantic Yards/Pacific Park.)

They cite academic Bent Flyvbjerg, who defined megaprojects as “large-scale, complex ventures that typically cost US$1 billion or more, take many years to develop and build, involve multiple public and private stakeholders, are transformational, and impact millions of people."

Does Atlantic Yards/Pacific Park qualify?
  • over $1 billion? Yes
  • take many years? Yes
  • involve multiple stakeholders? Yes
  • are transformational? Maybe
  • impact millions of people? Depends how you measure
Atlantic Yards/Pacific Park was long billed--and embraced/feared--as transformational, though for now it's too soon to fully grasp. The dramatic change in scale suggested by the 2003 project models has in many ways already arrived several blocks to the north along Flatbush Avenue.

Yes, the Barclays Center has helped (further) brand Brooklyn and stimulate some portion of the retail/hotels in and around Downtown Brooklyn, as former Deputy Mayor Dan Doctoroff believes. But it's also been part of a larger trend.

That said, if and when the project is built to its full density, the enormous population change in adjacent buildings along and over the Vanderbilt Yard, will be transformational to Prospect Heights and adjacent Fort Greene/Clinton Hill. If and when the two-tower Site 5 project is built, with Time Warner Center-like retail and much office/housing space, that surely will transform the intersection at Fourth and Flatbush/Atlantic Avenues.

Has Atlantic Yards/Pacific Park impacted millions of people? Will it? That's harder to say. Sure, if we count arenagoers, the tab exceeds a million. The improvements to the Atlantic Avenue-Barclays Center subway station, notably the exit on the arena plaza, have added capacity and helped many commuters, but otherwise the infrastructure changes have focused more on the project itself.

How measure success?

What are the dimensions of success? The authors analyze megaproject success on four dimensions:
  • Efficiency. To what extent did the megaproject fulfill its cost, time, and other productivity goals?
  • Impact on Customer/User. Are customers and users satisfied? Did it help?
  • Business/Financial Success. Did public and private entities reap investment success?
  • Impact on Society. Did it help the larger society/region, including "environment, quality of life, scientific or artistic achievement, entertainment, ecology, or symbolic impact on the history of humanity."
Is Atlantic Yards/Pacific Park a success? 

So far, in most dimensions, no.

It has not met its time, budget, and scope goals. It's well delayed, and the number of jobs, affordable housing, and tax revenues are fewer/smaller than expected. Flyvbjerg, the authors note, finds that nine out of ten megaprojects have cost overruns, and that delays are common.

It's been a money-loser for the original developer, despite tax breaks and subsidies, and the delayed buildout means it has underperformed in terms of tax revenue for the public.

Sure, some residents, workers, and especially arenagoers are satisfied, and the arena has racked up awards and some gaudy statistics (more so than profits).

The best argument for project defenders, such as Deputy Mayor Dan Doctoroff, is that it was worth it to be "transformative." But the broad transformation expected/hoped for hasn't come.

What makes megaprojects succeed?

The authors cite three different (and unrelated factors) in success:
  • Clear Strategic Vision, "a simple and exciting articulation of the project's outcome," not technical or profit-related
  • Total Alignment, with all stakeholders on board, sharing a vision, including alignment with "the community and environment in which it functions"
  • Adapting to Complexity, finding the "appropriate management style, resources, organizations, processes, skills, equipment, tools, and technology to meet these challenges"
How does Atlantic Yards/Pacific Park qualify?

The record suggests that Atlantic Yards/Pacific Park has strayed from this template for success.

Rather than a Clear Strategic Vision, the project has changed in configuration and timing, with four office towers flanking the arena turning into one (maybe), with a flagship tower now discarded, and with the original architect and landscape architect replaced. New owners now operate the arena and own the rest of the project. The state and city authorities/agencies overseeing/shepherding the project have seen much turnover, which means the developer's shifting vision--driven by the bottom-line needs of publicly traded companies--tends to prevail.

Rather than Total Alignment, there have been a series of negotiations to change the project in reaction to new circumstances, again driven more by the bottom line than by a consistent vision. It's hard to say there's been alignment with all elements of the community (though, as we know, there are different ways to define and set boundaries for community).

As for Adapting to Complexity, there certainly have been changes, even risk-taking, such as with the modular gambit or the decision to substitute a smaller, one-sport arena, and then to wrap it anew after public criticism. That doesn't mean the project has adapted to complexity particularly well--that's why the state gave extended time to finish, first 25 years to 2035 (rather than the long-promised ten years), and now 2025 (though question marks about that deadline remain).

The authors note that not all megaprojects they studied followed those three rules--the Sydney Opera House lacked "alignment between the city, the architect, and the political system around it, which led to extensive conflicts and unchecked spending," but it is now judged a success. So it's possible that, despite the troubled record, Atlantic Yards/Pacific Park will wind up somewhat more successful.

The example of Bilbao and an Atlantic Yards question

The authors choose one project as a sterling example:
The Guggenheim Museum in Bilbao, Spain, was designed and built by the American architect Frank Gehry. Gehry created his own project management organization, which included designers, planners, financial analysts, marketing managers, and builders. Before accepting any job, Gehry insisted that his organization have complete control of the project and that he will make all artistic, as well as financial and managerial decisions. Obviously, he set the vision, and at the same time, created a clear alignment of all parties. Gehry was also aware of the expected difficulties, challenges, and complexities, and he made sure nothing was missed. No wonder all his buildings, despite their uniqueness and complexities, were completed on time and within cost.
Given how Gehry was subordinated to his client, not just on Atlantic Yards but even the Manhattan residential tower 8 Spruce Street that was built, it's questionable that he would've had the clout for such control with Atlantic Yards. Perhaps it's good that he and we never found out.

Was the WTC a success?

It should be noted that the article's text and chart call the original World Trade Center a success on all dimensions:
Although the original World Trade Center (WTC) complex was destroyed in the September 11 attacks, it is still an example of project management at its best. The original World Trade Center was a large complex of seven buildings in New York City, which was built to revitalize lower Manhattan and serve as the first visible sign that the economy of New York City was transforming from manufacturing to service (Birch, 2006). In 1962, Yamasaki was selected as the lead architect, and the actual construction work began in 1968. At the time of their completion, the “Twin Towers” were the tallest buildings in the world. The project involved technical challenges, such as building to the Bathtub system, which was aimed to resolve the problem of reaching bedrock through the water table of the Hudson River; the elevator system, aimed to transport the 50,000 tenants working in the towers; and a revolutionary exterior structural column design. In addition, the project involved many political and logistical issues related to the selection of the site and implications for displacing existing businesses and residents. The project was well organized for its level of complexity and stakeholder involvement. In retrospect, throughout the entire project, management demonstrated the right approach with leadership, which created high energy and motivated the team, and a strategic, long-term perspective, which was focused on the economic, environmental, social, and political successes (Gillespie, 2002).
Not so sure about that, given that the office space would not have attracted tenants without government help.


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