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Industrial Megaprojects: Concepts, Strategies, and Practices for Success
Avoid common pitfalls in large-scale projects using these smart strategies Over half of large-scale engineering and construction projects―off-shore oil platforms, chemical plants, metals processing, dams, and similar projects―have miserably poor results. These include billions of dollars in overruns, long delays in design and construction, and poor operability once finally completed. Industrial Megaprojects gives you a clear, nontechnical understanding of why these major projects get into trouble, and how your company can prevent hazardous and costly errors when undertaking such large technical and management challenges. Companies worldwide are rethinking their large-scale projects. Industrial Megaprojects is your essential guide for this rethink, offering the tools and principles that are the true foundation of safe, cost-effective, successful megaprojects.
384 pages, Hardcover
First published March 29, 2011
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April 17, 2021
If you want to build a shed in your garden, you have a project. If you want to develop an offshore gas field and run a pipeline onshore to connect it to a new LNG plant, you have an industrial megaproject. Pretty much all the large-scale industrial developments in the private sector are born from megaprojects, which cost some 3 billion dollars on average with exceptional projects of more than eight times that amount (yes >24 bn$, you read that right). Megaprojects aren't just oil & gas projects either, but include chemical complexes, mining operations, and offshore wind farms.
So obviously the commercial companies and contractors that are building these giant complexes must be the most experienced and most capable in the world, and, unlike government-sponsored debacles, they must run a pretty tight ship in terms of their project's cost, schedule achievement, and production results. You would certainly think so, but you would be dead wrong.
Data collected from more than 300 megaprojects (up to 2011) shows that no fewer than 65% of them fail to meet business objectives, missing their targets (on average) by +30% on cost, +30% on schedule, and achieving only half of the first year the production target than they ought to.
Doesn't sound too bad?
Imagine that you are building an offshore wind farm, let's say you are responsible for building the 1,400 MW Sofia wind farm in the North Sea, which is under construction as I write this review. Imagine that this type of average megaproject failure would happen to you. This would mean that your brand new wind farm which was supposed to have cost 4.1 billion dollars and supposed to have started producing energy in 2026 (after 7 years of effort), would instead start operating in 2028, at half power, and still have cost you 5.5 billion dollars. Most wind farm projects are economically marginal to begin with, so you can imagine what this type of failure would do to your nice wind park project and what your shareholders will have to say about that.
So obviously, with risks this high and losses so great, megaproject management must be the focus of intense study and much must have been published about these fell beasts. You would certainly think so, but you would be wrong again. I am sure that every major industrial company has boxes full of "after action review" and "lessons learnt" reports in its vaults, but considering the parade of disastrous outcomes for companies that clearly should have known better, it appears that nobody is learning much from all those lost billions.
Enter Edward Merrow and the consulting firm he founded in 1987. I imagine he started by collecting megaproject data when he was still a research analyst at the RAND corporation, you know, the odd published snippet here and there. Then some more digging by following up with some of the people involved. Banging in data into a 1980s Lotus 1-2-3 spreadsheet and noticing patterns. With his initial data trove he found he could open more doors and get more information on the spectacular budget and schedule blowups of the day. Fast forward 30 years, and Ed runs the world's best stocked data warehouse of capital project information and not only has he been able to draw many statistically relevant conclusions on how not to do megaprojects, he is also been able to become a partner of choice to provide value assurance reviews for the capital projects of most major companies all over the world. For example, the majority of oil majors allow his company to pick their project data apart for benchmarking and make their project teams go through Ed's pacesetter reviews. And I am sure the same holds for many other industries. Quite a gig - and a wonderful consulting success story.
But none of that would have happened if Ed's data was not so darn hard to get, or if the lessons he draws from them were not so valuable to the managers of megaprojects. Regretfully, most of the value of this treasure trove of project information is carefully hidden behind thick paywalls, which only companies with billion dollar project budgets may penetrate.
Then there is this book, "Industrial Megaprojects - Concepts, Strategies, and Practices for Success" (2011), which gained instant bestseller status in the project management community (and often required reading in PM courses too).
This book is a very well-written analysis of the leading causes of megaproject failure, and not of the "once a man saw a chicken cross a river" anecdotal kind either. Ed presents his causes with statistical underpinnings and confidence intervals, and his arguments are always well supported - even if he doesn't put his entire dataset of over 300 mega project into a handy appendix for us.
Having worked as a PM on parts of megaprojects, I recognize many of the issues that Ed brings up. In fact, it is my experience that every capital project is a highly unique enterprise beset by remarkably similar problems. Problems that can be solved, preferably while we're still in our cozy offices and it's still cheap to take some extra time to do so.
This is a valuable book and I would love there to be a second edition that would refresh the dataset and sharpen some of Ed's observations. Not that I think many new project problems have cropped up from further analysis - but I would love to hear some more particular failure mechanisms in particular cases, war stories if you like, to further illustrate the points made. For all the great observations in Ed's book, it only comes to life because of the examples he (rather sparingly) provides and because of my own first hand experiences. So for the reader who comes to be entertained with amusing stories of human error: skip this book. For project practitioners everywhere: come and recognize some of your day-to-day; you are not alone!
Afterthought...
You don't need to be genius to realize that when you start building your garden shed while:
(1) some of the drawings are being reworked by the vendor to accommodate the extra door and reroute of the stove pipe your spouse requested two days ago,
(2) not being quite sure if you have all the necessary tools to hand,
(3) with only a vague promise from Larry and Sheila that they'd come help prop up the center beam with you 'somewhere in the afternoon', and
(4) without certainty you have all the materials you need for the shed already present and accounted for but
(5) with certainty that you don't have the extra door and stove pipe that you need,
...your garden shed building project might just overrun the time and budget you have for it and probably will stay without the extra door and working stove for a while yet before it is properly finished. But you know, you start anyway because you only took two days off and the clock is ticking.
It sounds silly, but this is exactly what happens in megaprojects the world over all the time. Promises have been made to stakeholders, contracts with definite start date (but indefinite end date) are in place, project economics are demanding satisfaction, we have lots of "can do" attitude and gumption, and of course "hey, we can't fail like *those* guys because we have learned all the lessons and have the best team in the industry"....
I wonder what the guy with who ran the Great Giza Pyramid project in 2560 BC had to deal with - his project headlines sure are impressive: "biggest yet! 147m tall! tallest construction in the world for the next 3,800 years! built of 2.3 million quarried and shaped stones weighting 6 million tons in total! inner chamber lining made out of 8,000 tons of Aswan granite with blocks of up to 80 tons each, transported 900 km by barge! copper chisels and wooden mallets only! just a little math available and must use a beastly number system without zeros! average workforce 13,000 (40,000 at peak)! 30 year project schedule!"
Just imagine that.
It was one for the Ages (literally).
So obviously the commercial companies and contractors that are building these giant complexes must be the most experienced and most capable in the world, and, unlike government-sponsored debacles, they must run a pretty tight ship in terms of their project's cost, schedule achievement, and production results. You would certainly think so, but you would be dead wrong.
Data collected from more than 300 megaprojects (up to 2011) shows that no fewer than 65% of them fail to meet business objectives, missing their targets (on average) by +30% on cost, +30% on schedule, and achieving only half of the first year the production target than they ought to.
Doesn't sound too bad?
Imagine that you are building an offshore wind farm, let's say you are responsible for building the 1,400 MW Sofia wind farm in the North Sea, which is under construction as I write this review. Imagine that this type of average megaproject failure would happen to you. This would mean that your brand new wind farm which was supposed to have cost 4.1 billion dollars and supposed to have started producing energy in 2026 (after 7 years of effort), would instead start operating in 2028, at half power, and still have cost you 5.5 billion dollars. Most wind farm projects are economically marginal to begin with, so you can imagine what this type of failure would do to your nice wind park project and what your shareholders will have to say about that.
So obviously, with risks this high and losses so great, megaproject management must be the focus of intense study and much must have been published about these fell beasts. You would certainly think so, but you would be wrong again. I am sure that every major industrial company has boxes full of "after action review" and "lessons learnt" reports in its vaults, but considering the parade of disastrous outcomes for companies that clearly should have known better, it appears that nobody is learning much from all those lost billions.
Enter Edward Merrow and the consulting firm he founded in 1987. I imagine he started by collecting megaproject data when he was still a research analyst at the RAND corporation, you know, the odd published snippet here and there. Then some more digging by following up with some of the people involved. Banging in data into a 1980s Lotus 1-2-3 spreadsheet and noticing patterns. With his initial data trove he found he could open more doors and get more information on the spectacular budget and schedule blowups of the day. Fast forward 30 years, and Ed runs the world's best stocked data warehouse of capital project information and not only has he been able to draw many statistically relevant conclusions on how not to do megaprojects, he is also been able to become a partner of choice to provide value assurance reviews for the capital projects of most major companies all over the world. For example, the majority of oil majors allow his company to pick their project data apart for benchmarking and make their project teams go through Ed's pacesetter reviews. And I am sure the same holds for many other industries. Quite a gig - and a wonderful consulting success story.
But none of that would have happened if Ed's data was not so darn hard to get, or if the lessons he draws from them were not so valuable to the managers of megaprojects. Regretfully, most of the value of this treasure trove of project information is carefully hidden behind thick paywalls, which only companies with billion dollar project budgets may penetrate.
Then there is this book, "Industrial Megaprojects - Concepts, Strategies, and Practices for Success" (2011), which gained instant bestseller status in the project management community (and often required reading in PM courses too).
This book is a very well-written analysis of the leading causes of megaproject failure, and not of the "once a man saw a chicken cross a river" anecdotal kind either. Ed presents his causes with statistical underpinnings and confidence intervals, and his arguments are always well supported - even if he doesn't put his entire dataset of over 300 mega project into a handy appendix for us.
Having worked as a PM on parts of megaprojects, I recognize many of the issues that Ed brings up. In fact, it is my experience that every capital project is a highly unique enterprise beset by remarkably similar problems. Problems that can be solved, preferably while we're still in our cozy offices and it's still cheap to take some extra time to do so.
This is a valuable book and I would love there to be a second edition that would refresh the dataset and sharpen some of Ed's observations. Not that I think many new project problems have cropped up from further analysis - but I would love to hear some more particular failure mechanisms in particular cases, war stories if you like, to further illustrate the points made. For all the great observations in Ed's book, it only comes to life because of the examples he (rather sparingly) provides and because of my own first hand experiences. So for the reader who comes to be entertained with amusing stories of human error: skip this book. For project practitioners everywhere: come and recognize some of your day-to-day; you are not alone!
Afterthought...
You don't need to be genius to realize that when you start building your garden shed while:
(1) some of the drawings are being reworked by the vendor to accommodate the extra door and reroute of the stove pipe your spouse requested two days ago,
(2) not being quite sure if you have all the necessary tools to hand,
(3) with only a vague promise from Larry and Sheila that they'd come help prop up the center beam with you 'somewhere in the afternoon', and
(4) without certainty you have all the materials you need for the shed already present and accounted for but
(5) with certainty that you don't have the extra door and stove pipe that you need,
...your garden shed building project might just overrun the time and budget you have for it and probably will stay without the extra door and working stove for a while yet before it is properly finished. But you know, you start anyway because you only took two days off and the clock is ticking.
It sounds silly, but this is exactly what happens in megaprojects the world over all the time. Promises have been made to stakeholders, contracts with definite start date (but indefinite end date) are in place, project economics are demanding satisfaction, we have lots of "can do" attitude and gumption, and of course "hey, we can't fail like *those* guys because we have learned all the lessons and have the best team in the industry"....
I wonder what the guy with who ran the Great Giza Pyramid project in 2560 BC had to deal with - his project headlines sure are impressive: "biggest yet! 147m tall! tallest construction in the world for the next 3,800 years! built of 2.3 million quarried and shaped stones weighting 6 million tons in total! inner chamber lining made out of 8,000 tons of Aswan granite with blocks of up to 80 tons each, transported 900 km by barge! copper chisels and wooden mallets only! just a little math available and must use a beastly number system without zeros! average workforce 13,000 (40,000 at peak)! 30 year project schedule!"
Just imagine that.
It was one for the Ages (literally).
November 1, 2024
I am pretty sure this book will be a 5 star for the target audience, and maybe a 3 star for me. It’s definitely targeted for industrial megaprojects and not your usual run of the mill projects, although there’s some carryover, but the author is smart enough to focus more on where the literature doesn’t exist, specifically the larger projects. Some chapters such as basic data are relevant, and having a sense of shaping is very important for any entrepreneur.
July 4, 2018
Not much is published by IPA so when one can get a book like this on their research, it is a must have. Have referenced this often over the years.
September 22, 2025
Second Edition
This entire review has been hidden because of spoilers.
March 2, 2013
Classic book about Megaproject. I was fortunate to attend his course in 2012 and his approach and objectiveness in this book is outstanding. If you need to understand more about huge projects, FEL process and shaping of this kind a project, this is the book for you.
Livro clássico sobre Megaprojetos. Eu fui felizardo ao participar do seu curso em 2012 e a sua abordagem e objetividade nesse livro são espetaculares. Se você precisa compreender mais sobre projetos gigantescos, processo FEL e modelamento, esse é o livro para você.
Livro clássico sobre Megaprojetos. Eu fui felizardo ao participar do seu curso em 2012 e a sua abordagem e objetividade nesse livro são espetaculares. Se você precisa compreender mais sobre projetos gigantescos, processo FEL e modelamento, esse é o livro para você.
February 3, 2017
Great book for any project manager, especially how to form a project team and ensure that focus is held during the project.
I would say it is a must for any project manager in the Oil and Gas industry.
I would say it is a must for any project manager in the Oil and Gas industry.
Displaying 1 - 6 of 6 reviews