How to keep control of an R&D megaproject
14 February 2017
I have been following the progress of the Hyperloop project with interest and, to be honest, a little excitement. It is a bold, ambitious project, driven by an inspired vision, which promises to deliver on-demand intercity transport: airline speeds at bus fare prices via capsules zipping through low pressure tubes. If you want to know a little more about it, take a look here.
The realisation of a vision as revolutionary as Hyperloop is a once in a generation event.. or is it?
For many people, dramatic advances such as this are simply the preserve of the latest sci-fi programme and are unlikely to be borne out in their lifetime. But perhaps we shouldn’t be so hasty.
After all, it’s worth reconsidering this in the context of what was going on in the middle of the last century – and in particular, the big advances witnessed by the baby boomers. In the 1940s we had the jet engine. A decade later and we had the first nuclear power plants. In the 1960s we had not one but two space programmes. When looked at in this light, projects such as the Hyperloop suddenly seem more achievable.
Step forward a generation or two and today’s ‘big bets’ might include: nuclear fusion; driverless cars; electric flight; Magic Leap; or anything in big pharma or defence.
It seems to me that big bets on technological leaps into the unknown are more common than perhaps you might think. Passionate people, backed by very large institutions, continue to dream up and try to deliver these new innovations. And so they should: this is how the human race makes technological progress. After all, the motor car was hardly an incremental improvement on the horse.
Perhaps they just feel a little remote because not many of us are playing the game. Arguably, these innovative programmes have two core qualities that exclude all but a few players:
- They require eye wateringly large amounts of capital. The classic example is the Apollo Programme that put a man on the moon at a cost of the order of $180bn in today’s prices or double the entire 2016 federal budget for transport. Putting a price on today’s big bets is a more speculative exercise but we are talking about billions rather than millions of dollars.
- The outcome is so uncertainat the outset that no-one really knows how long they will take to develop, how much money will be required or if it is even possible to develop them at all.
If you have a few billion dollars to invest and you are tempted by a big bet, you might ask yourself how you can avoid wasting your money in the endeavour.
The bad news is that most of the conventional approaches to project control are reliant on having a reasonable plan in the first place and rendered largely impotent in the face of a big bet where such a plan only emerges in retrospect after many wrong turns and blind alleys. Earned value management is a classic approach of this type and still considered the gold standard by many professionals. While it was developed for the last generation of big bets by US Government agencies including NASA, it falls down when the plan cannot be properly set out from the start of a project.
The good news is that there are now other options for improving the odds. Big bets mean big teams, working on many different fronts. In a digital world, that means lots of data - and data can be your friend here.
The application of advanced data analytics techniques to project data is now emerging as a powerful tool. They provide insight without the straightjacket of systemisation required for most of the project control approaches that we are familiar with. For example, we can look at the organic design process of a big bet in terms of the flows and bottlenecks to progress, as the design evolves and adapts to overcome obstacles. We can start pressing hard on our successes and looking for alternatives where we are getting bogged down. A big step forward for those using agile approaches in particular.
Data analytics also offer insights that go beyond progress monitoring and into areas such as process and behaviours. This gives innovators the opportunity to turn their attention to improving the project environment in order to create the greatest chance of success. If we can understand where we are working well and where the tensions or gaps are, then we can adapt the team and the way it works to improve our performance.
I am not ready to write the “earned value is dead” headline just yet but if I was about to make a big bet and wanted to stay in control, I would be looking to this new generation of tools. They are being developed in the digital age for the projects that this generation wants to be remembered for.
If you have an appetite to think differently about using technology in your capital projects, visit www.pwc.co.uk/reimagining-capital-projects
