Large-scale industrial projects require significant infrastructure and capital investments, but their implications can be equally expansive. Quite often, large project executions can have a global impact with a major influence on the economy, environment and other critical areas.
Naturally, with such substantial investments and wide-ranging complexities, successfully managing these ventures can be a challenge in and of itself. In fact, on projects requiring a budget of more than $10 million, it’s estimated that 38% fail, while an additional 52% are challenged — meaning they go over budget, don’t meet completion timelines or finish with fewer features and functions than originally required. Only 10% generally qualify as a “success.”
As Maksim Sonin, a Sloan Fellow at Stanford Graduate School of Business who has led capital energy developments as large as $14 billion explains, however, while success is never a guarantee, there are key practices stakeholders can use to increase the likelihood of achieving their goals.
- Remember: People Do Projects
“I always say that people do projects,” Sonin notes.
“People matter most for the success of any initiative, especially for large-scale endeavors. Assembling a dependable team with the right qualifications and a shared vision is ultimately the most important thing you can do to increase your likelihood of success. Making sure your collaborators meet the requirements for the task at hand will make or break your project.”
Sonin’s perspective draws from many of the benefits of teamwork as cited by Yale University: teams that work together effectively bring multiple perspectives and feedback that enhance the group’s learning, efficiency and productivity. Of course, to achieve these results, all key stakeholders must be integrated into one task force.
Groups with a unified vision but diverse skills and backgrounds can be particularly beneficial for large-scale developments. Putting the right people in place at the onset of the collaboration positions them to maximize their effectiveness and potential for innovation.
- Give Each Stakeholder the Attention They Deserve
Large-scale industrial projects typically involve many parties.
This can include multiple stakeholders within a single organization, as well as those from other organizations that act as collaborators or opponents. Many of the projects Sonin has led have included governments and multinational conglomerates, resulting in undertakings that require multi-faceted coordination. “Each stakeholder needs to be given the attention they deserve throughout each stage of the process,” Sonin advises.
“From inception to operation, continuous collaboration is essential to keep everyone on the same page and to ensure that the vision and goals remain consistent. If a stakeholder begins to feel like they are being neglected or ignored, their commitment could waver, which would weaken the growth potential for the entire venture.”
Close collaboration will ensure greater buy-in from all involved, which can lead to more robust solutions and improved resource sharing.
- Start Planning Early
Another key takeaway from Sonin’s experiences is the need to start planning early when undertaking a large-scale industrial project. “Large global developments can rarely be fast-tracked. They are just too complex, with too many variables and too many parties engaged. Quite often, the scope of the initiative means that preparation and execution will require years of work,” Sonin explains.
“You need to set realistic expectations, and this requires beginning planning as early as possible. This will allow you to better understand cost and scheduling needs from day one, so that everyone can have a sense of what will be required.”
- Proactively Manage Risks
Early planning also helps those involved in large-scale endeavors become better able to manage the associated risks. “Large industrial projects are very fragile creatures. They may be put on hold or discontinued entirely, even after years of work and hundreds of millions spent on development and execution,” Sonin says.
“Because of this, you cannot afford to leave anything to chance. You can’t avoid or completely eliminate every risk you might face, but you can manage them proactively. A continued emphasis on risk management is essential for the duration of the job.”
Many risks can be identified during the initial planning stages, though ongoing analysis is required to address challenges that can change over time. Consistent communication with all stakeholders is crucial to ensure that all parties stay involved in risk mitigation.
- Maintain a Long-Term Strategic View
Finally, Sonin advises that those engaged in large-scale industrial projects with global implications maintain a long-term strategic view to guide their decision making.
“Large-scale global developments often become legacy projects with impacts far beyond economic and social benefits,” he notes. “For example, with proper care, enterprises that spur an effective transition to a low-carbon economy can deliver outcomes that extend for decades. Everyone involved must focus on the long term to guide their actions and choices.”
In reality, many of these large-scale undertakings are never truly “done,” as they require sustained oversight even after the initial work is complete. Focusing on long-term objectives and needs can influence everything from personnel decisions to design and manufacturing.
Increasing the Odds For Success
As Sonin’s insights reveal, successfully managing large-scale industrial projects is a complex and challenging endeavor. However, by assembling a qualified team and ensuring that everyone proactively plans and executes while focusing on long-term goals, the likelihood of success will improve significantly.
