How Big Things Get Done: The Surprising Factors Behind Every Successful Project, from Home Renovations to Space Exploration

by Professor Bent Flyvbjerg

When The Power Broker: Robert Moses and the Fall of New York was finally published in 1974, it won the Pulitzer Prize and became an improbable bestseller. Not only is the book still in print, it is considered one of the greatest dissections of political power ever written.

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.”

Kahneman and Tversky dubbed these two perspectives the “inside view” (looking at the individual project in its singularity) and the “outside view” (looking at a project as part of a class of projects, as “one of those”).

came to call this process “reference-class forecasting” (RCF).11 After I developed it for Gordon Brown, the British government used it to forecast the time and cost of major projects and was so satisfied with the results that it made the process mandatory.

So reference-class forecasting is better on biases. It’s better on unknown unknowns. It’s simple and easily done. And it has a proven track record of delivering more accurate forecasts. I’m happy that it has been taken up to the extent that it has by different organizations around the world—much more than I thought would ever happen when I first developed the method for Gordon Brown—but I wouldn’t blame anyone for wondering why, given all its strengths, it isn’t used even more than it is, across the board.

shoddy forecasting is the bread and butter of countless corporations. They do not want the people who authorize projects and pay the bills to have a more accurate picture of what projects will cost and how long they will take. They’re going to stick with the status quo, at least until they’re forced to change—for instance, by assigning legal liability for blatantly biased forecasts, which is increasingly happening.

“This time is different” is the motto of uniqueness bias. The textbook was ultimately finished eight years later.19 If the greatest living student of cognitive bias can be suckered by uniqueness bias, it’s small wonder that the rest of us are vulnerable, too, or that avoiding the trap requires awareness and sustained mental effort.

The third reason RCF is still not as widely used as it should be is the simplest. It’s the data. Calculating an average is easy, but only once you have the numbers in hand. That is the hard part.

Think about the young Robert Caro, contemplating writing his first book. He could easily have used RCF to forecast how long his project would take: Make a list of books he considers broadly similar to what he plans to write, call their authors, and ask how long it took them to write those books. If he gets twenty responses, he adds them up, divides by twenty, and has his anchor.

But Bergendahl had an idea for a replacement. Why not use our data on transportation infrastructure costs as a “floor”—a minimum—and assume that the real cost of nuclear decommissioning and storage would be somewhere above that? That would be far from a perfect estimate. But it made a lot more sense than the one the consultants had put together. And

was impressed. It was such a commonsense approach—phronesis, again. We worked to develop it, and it became Swedish policy.21

If you’re a professional at a large organization, you should do better than this rough-and-ready approach. You need to get serious about gathering enough data to allow you to statistically analyze the distribution and determine if it’s normal or fat-tailed. If it’s normal or near normal, do a reference-class forecast using the mean. This would still give you an approximately 50 percent risk of a small cost overrun. If you want to reduce this risk further, add a 10 to 15 percent contingency (reserve), and you’re done.24

I started this book with one: “Think slow, act fast.” We saw that delivery is when things can go horribly and expensively wrong. Exhaustive planning that enables swift delivery, narrowing the time window that black swans can crash through, is an effective means of mitigating this risk. Finishing is the ultimate form of black swan prevention; after a project is done, it can’t blow up, at least not as regards delivery.

Planning ruins projects, some say. Just get going! Trust your ingenuity! It’s a wonderful sentiment backed by superb stories. But is it true?

When we ponder a big project, Hirschman observed, we routinely fail to see the number and severity of the challenges the project will pose. This ignorance makes us too optimistic. And that’s a good thing, according to Hirschman. “Since we necessarily underestimate our creativity,” he wrote, “it is desirable that we underestimate to a roughly similar extent the difficulties of the tasks we face, so as to be tricked by these two offsetting underestimates into undertaking tasks which we can, but otherwise would not dare, tackle.”

“Since we are apparently on the trail here of some sort of Invisible or Hidden Hand that beneficially hides difficulties from us, I propose ‘the Hiding Hand.’”

So how did Jaws become one of the most successful movies of all time? The terrible script compelled the actors and director to invent scenes and dialogue together, including moments that gave the characters real depth. And the deficiencies of the mechanical sharks forced Spielberg to shift the focus to the people and only hint at the terror in the water for most of the movie, which turned out to be a lot scarier than any image of a shark.

Projects that run into trouble and end in miserable failure are soon forgotten because most people aren’t interested in miserable failures; projects that run into trouble but persevere and become smash successes are remembered and celebrated.

Someone could note, for example, that Steve Jobs, Bill Gates, and Mark Zuckerberg all dropped out of university and conclude that a key to success in information technology is to leave school. What’s missing, and what makes that odd conclusion possible, are the dropouts who went nowhere in information technology and are ignored. That’s survivorship bias.

So what did the data show? Not that. The benefit overrun of the average project does not exceed the cost overrun. In fact, there is no benefit overrun.13 Put simply, the typical project is one in which costs are underestimated and benefits are overestimated.

An optimistic benefit estimate is clearly an overestimate, which is the prediction of Kahneman and behavioral science for project planning. But Hirschman and the Hiding Hand predict the exact opposite, as we saw earlier: underestimated benefits. So it’s a clear-cut case of which of the two opposite predictions is supported by the data. And the verdict comes down overwhelmingly in favor of Kahneman and behavioral science and against Hirschman and the Hiding Hand.

The rare exceptions Hirschman incorrectly thought are typical are, almost by definition, fantastic projects that make irresistible stories. They follow the perfect Hero’s Journey, with a narrative arc from great promise to near ruin to an even greater accomplishment and celebration.15 We seem hardwired to love such stories.

My disagreement with Hirschman—and with my interlocuter in Sydney—isn’t just about dollars and cents and statistics. There is so much else at stake, including people’s lives and life’s work.

My data put the odds of having a benefit overrun that exceeds the cost overrun, even if by only a little, at 20 percent. Contrast that with the 80 percent probability of failure. It’s a dangerous bet—and an unnecessary one.

We do not have to be desperate to be creative. Indeed, there’s reason to think that desperation may actually hinder the imaginative moments that elevate a project to glory. Psychologists have studied the effects of stress on creativity for decades, and there is now a substantial literature showing that it has a largely—though not entirely—negative effect.

Imaginative leaps belong in planning, not delivery. When stakes and stress are low, we are freer to wonder, try, and experiment. Planning is creativity’s natural habitat.

So yes, all that slow thinking and the thoroughly detailed and tested plan it produces is a good idea. But not even a superb plan delivers itself. To take the final, critical step, you need a team—a single, determined organism—to act fast and deliver on time. In the next chapter, I’ll show you how to forge one.

As important as it is to do the slow thinking that produces excellent planning and forecasting, acting fast in delivery takes more than a strong plan; you need an equally strong team. How are diverse people and organizations with different identities and interests turned into a single “us”—a team—with everyone rowing in the same direction: toward delivery?

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.

This process, called “design for manufacture and assembly,” is how the hyperefficient car industry operates. Sir John Egan, the CEO of BAA and a former head of Jaguar, had argued in an influential report to the UK government that this approach would produce major efficiency gains in construction.7 With T5, he put his thinking into practice.

Contracts such as that between BAA and Harper’s company became a hallmark of the project, meaning that BAA assumed far more risk than it would have under ordinary contracts. But by giving companies only positive incentives to perform well—including bonuses for meeting and beating benchmarks—it ensured that the interests of the many different companies working on the project were not pitted against one another. Instead, everyone had the same interest: completing T5 on time.

Harvard professor Amy Edmondson dubbed this sense of being free to speak your mind “psychological safety.” It’s hard to overstate its value. Psychological safety boosts morale, fosters improvements, and ensures that, in Andrew Wolstenholme’s words, “bad news travels fast”—so problems can be tackled quickly.11

Get a small thing, a basic building block. Combine it with another and another until you have what you need. That’s how a single solar cell becomes a solar panel, which becomes a solar array, which becomes a massive megawatt-churning solar farm. Modularity delivers faster, cheaper, and better, making it valuable for all project types and sizes. But for building at a truly huge scale—the scale that transforms cities, countries, even the world—modularity is not just valuable, it’s indispensable.

If you build like this, you build only one thing. By definition, that thing is one of a kind. To put that in the language of tailors, it is bespoke: no standard parts, no commercial off-the-shelf products, no simple repetition of what was done last time. And that translates into slow and complex. Nuclear power plants, for one, are the products of a staggering number of bespoke parts and systems that must all work, and work together, for the plant as a whole to work.

That means that experimentation—one-half of the experiri I discussed in chapter 4—is out. You have no choice but to get it right the first time. Second, there’s a problem with experience—the other half of experiri. If you are building a nuclear power plant, chances are that you haven’t done much of that before for the simple reason that few have been built and each takes many years to complete, so opportunities to develop experience are scarce.

Manufacturing in a factory and assembling on-site is far more efficient than traditional construction because a factory is a controlled environment designed to be as efficient, linear, and predictable as possible. To take an obvious example, bad weather routinely wreaks havoc on outdoor construction, while production in a factory proceeds regardless of the elements.

Subways would seem to be an even harder case for modularization, but when Madrid Metro carried out one of the world’s largest subway expansions between 1995 and 2003, it leaned on modularity in two ways. First, the seventy-six stations required for the expansion were treated like Lego, with all sharing the same simple, clean, functional design. Costs plunged, and speed of delivery soared. To amplify those effects, Madrid Metro shunned new technologies. Only proven technologies—those with a high degree of “frozen experience”—were used.

In total, Madrid Metro produced 131 kilometers (81 miles) of rail and seventy-six stations in just two stages of four years each. That’s twice the speed of the industry average. And it did so at half the cost. We need more behavior like this in megaproject management.

Marc Levinson argued compellingly that the humble shipping container was nothing less than a major cause of globalization.24

Solar power is the king of modularity. It is also the lowest-risk project type of any I’ve tested in terms of cost and schedule. That’s no coincidence.

The pattern is clear: Modular projects are in much less danger of turning into fat-tailed disasters. So modular is faster, cheaper, and less risky. That is a fact of immense importance.

They have come to accept the limitations of the “one huge thing” model and are trying to take nuclear power in a radically different direction. They call for scaled-down reactors to be built in factories, shipped to where they are needed, and assembled on-site, again transforming the construction site into an assembly site, which is rightly seen as the key to success. These reactors would each produce only 10 to 20 percent of the electricity generated by a conventional nuclear reactor. But if more electricity is needed, a second reactor could be added. Or a third. Or however many are required.29 The name of this new model for nuclear power says it all: They are “small modular reactors,” or SMRs.

Consider what the scientific panel that advises the United Nations said about a heat wave severe enough that, in the past, before humanity started changing the atmosphere, could be expected to happen once every fifty years. Today, the globe is 1.2 degrees Celsius warmer than it was then. As a result, that same heat wave can be expected to happen 4.8 times over fifty years, or once every ten years. If the temperature increase gets to 2 degrees, it will happen 8.6 times over fifty years, or once every six years. With a 5.3-degree increase, it will strike 39.2 times over fifty years—once every fifteen months—turning a rare and dangerous event into a new normal.34

But the more fundamental lesson is the power of modularity. It was modularity that enabled learning so rapid and growth so explosive that Denmark was able to revolutionize both wind power technology and its own electricity supply faster than anyone expected, including the innovators themselves, and in less time than it takes many countries to deliver a single “one huge thing” project. That’s huge and fast. That’s the model we need: “many small things” manufactured at scale and assembled like Lego, click, click, click.

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, whether it’s a home renovation, a wedding, an IT system, or a skyscraper. But masterbuilders aren’t always available or affordable, in which case you need to think further and consider some of the following.

GET YOUR TEAM RIGHT This is the only heuristic cited by every project leader I’ve ever met. Ed Catmull explained why: “Give a good idea to a mediocre team, and they will screw it up. Give a mediocre idea to a great team, and they will either fix it or come up with something better. If you get the team right, chances are they will get the ideas right.”5 But who should pick the team? Ideally, that’s the job of a masterbuilder. In fact, it’s the masterbuilder’s main job. This is why the role of masterbuilder is not as solitary as it sounds; projects are delivered by teams. So to amend my advice above: When possible, hire a masterbuilder. And the masterbuilder’s team.

ASK “WHY?” Asking why you’re doing your project will focus you on what matters, your ultimate purpose, and your result. This goes into the box on the right of your project chart. As the project sails into a storm of events and details, good leaders never lose sight of the ultimate result. “No matter where I am and what I’m doing in the delivery process,” noted Andrew Wolstenholme, the leader who delivered Heathrow’s Terminal 5 in chapter 8, “I check myse...

BUILD WITH LEGO Big is best built from small. Bake one small cake. Bake another. And another. Then stack them. Decoration aside, that’s all there really is to even the most towering wedding cake. As with wedding cakes, so with solar and wind farms, server farms, batteries, container shipping, pipelines, roads. They’re all profoundly modular, built with a basic building block. They can scale up like crazy, getting better, faster, bigger, and cheaper as they do. The small cake is the Lego brick—the basic building block—of the wedding cake. The solar panel is the Lego of the solar farm. The server is the Lego of the server farm. This potent little idea has been applied to software, subways, hardware, hotel...

THINK SLOW, ACT FAST What’s the worst that can happen during planning? Maybe your whiteboard is accidentally erased. What’s the worst that can happen during delivery? Your drill breaks through the ocean floor, flooding the tunnel. Just before you release your movie, a pandemic closes theaters. You ruin the most beautiful vista in Washington, DC. You have to dynamite months of work on the opera house, clear away the rubble, and start over. Your overpass collapses, killing dozens of people. And so much more. Almost any nightmare you can imagine can happen—and has happened—during delivery. You want to limit your exposure to this. You do it by taking all the time necessary to create a detailed, tested plan. Planning is relatively cheap and s...

TAKE THE OUTSIDE VIEW Your project is special, but unless you are doing what has literally never been done before—building a time machine, engineering a black hole—it is not unique; it is part of a larger class of projects. 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 c...