Bent Flyvbjerg shares his insights on the key principles that distinguish successful big projects from the failed ones.
Bent Flyvbjerg shares his insights on the key principles that distinguish successful big projects from the failed ones. Through his research and experience, he identifies important factors such as understanding the odds, planning slow and acting fast, and starting with the end goal in mind. Join us as we explore how to master the unknowns and achieve wild ambitions with Flyvbjerg's guidance.
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Srini: All right, Ben, welcome to Unmistakable Creative. Thanks so much for taking the time to join us.
Bent Fjvberg: Thank you very much. Thank you for having me.
Srini: Yeah, you have a new book out called How Big Things Get Done, which is all about making huge mega projects happen, which I absolutely loved. But before we get into all of that, I want to start by asking you what did your parents do for work and how did that end up shaping the choices that you've made with your life and career?
Bent Fjvberg: My father was a construction site manager. So I grew up on construction sites, and I think that has a lot to do with my professional interest and my academic interests. And my mother was a social worker.
Srini: And how did that shape the choices you made, and what did you learn from their experiences and the work that you ended up doing?
Bent Fjvberg: I think the first thing that I learned is that I really liked construction. So my parents would take me along to the places where my father worked, and that could be buildings or bridges and tunnels and so on. And I don't remember not going to construction sites ever.
So this must have been from when I was a baby. And I remember the smell of construction sites. I remember the people who worked there, they looked like big, strong people and doing very interesting things. There'd be noise, there'd be smoke and stuff, and dust and like something that appeals to a kid. Later on, when I became a teenager, I actually got to work on construction sites. So my father got me jobs on construction sites, and it just means that I've been interested in how to build things and how to build big things from a very early age.
Srini: And then, what about your mother in terms of the social work side? What did she teach you about people, human relationships, and making your way in the world?
Bent Fjvberg: Yes. So my mother would teach me exactly about that. It's not only about things. It's also about people. And I actually think that's a really important insight. It turns out now, when I study these things as a scholar, and we dig really deep, it's more about people than it's about things. It's always the people. And that's actually something that comes out in our book. Right up front, we make it clear there are two root causes of why things go bad or well, and those two root causes are psychology and power. So we are not talking about anything that's got to do with buildings or artifacts or bridges or anything, or even systems. This is actually about people, right? Psychology is all people. Power is all people.
Srini: Totally. We'll get into that. One thing I wonder about is being an educator, I assume you were educated in Denmark, and this is something I always wonder about educators. Two things. One, I don't know how much time you've spent looking at the American educational system. Still, I'm curious about what the differences are in the way that you were educated versus probably somebody like I was educated.
And if you were given the task of redesigning the global education system from the ground up, speaking of a mega project, what would you change about it right now?
Bent Fjvberg: First of all, I was actually also educated in the American educational system, so I was educated in Denmark and the United States, specifically UCLA, University of California, Los Angeles.
Srini: Okay, so we have background then because I was a Berkeley undergrad.
Bent Fjvberg: Alright. Yeah, and I spent a lot of time at Berkeley too. I had mentors at Berkeley, and so I know both systems well, both the Danish-Scandinavian system and the American system, and yeah, they're very different.
The main difference is that you get actually, get paid to go to university in Denmark. People just fall off their chairs when I mention that. So my daughter recently graduated from university, and at this stage, she was paid about $800-900 a month to attend university, so to cover her living expenses.
And that's on top of getting to live in heavily subsidized student housing, with your own bathroom, your own bedroom, shared kitchen, and so on. So that's the main difference: education is considered a public good that people should get for free. And not only for free, you actually pay young people to go to school because you want to incentivize them to get educated.
And that's how you have this very high level of education in Scandinavia because the kids are actually paid to go to school, and everybody's encouraged to do that and say that's the future.
Srini: So what I wonder then, as somebody who has an economics background, let's talk about incentives, right? Because every Indian kid has the story of going home and telling their parents that some kid at school gets paid for good grades, and their parents look at them and say, you're outta your damn mind. You get a roof over your head and a meal on the table. Get back to work. But it makes me think about the sort of intrinsic and extrinsic motivation issues when you're paying people to school because I wonder how that aligns with incentives when you're paying people to go to school. From the perspective of somebody with your background, how do you resolve that?
Bent Fjvberg: The incentives are not so strong that people will actually choose to go to school just because of the money. You'll actually make more money if you get a regular job than by being a student. I think the level of incentives is set just right. But you need to live if you go to school, so you actually want the kids to study instead of running around, working at a McDonald's, or something like that.
That's not a good use of your time. If you are in this really high-level institution that a good university is, you want the kids to spend their time in the university, not flipping burgers at a hot burger joint.
Srini: Yeah, to me, what the curriculum is, and obviously this is a huge issue here in the United States, the fact that we've riddled practically an entire generation with student loan debt. And what I wonder about is how you could actually bring some of that to the United States.
Because I think there's one argument that people always come back to, and that is that, oh, Scandinavian countries are small; therefore, it's possible there, but it's not possible here, which I don't entirely agree with because we're not accounting for every variable. But I also don't know because I'm not a person who makes educational policies.
I'm just somebody who's interested in this as somebody who has student loan debt.
Bent Fjvberg: Student loans are common in Scandinavia, and subsidies are not enough to live by. And so you need more. And many students take loans. It's not necessary. You can go through university without loans. My daughter didn't want to take loans, so she didn't do it. She worked on the side instead.
I took loans when I was a student. I thought that my time was better spent on studying than going out and working at a low-paid job. So I took loans, and it took me about ten years to pay them off after I'd graduated. It wasn't a huge amount. It's not like what you hear in horror stories from the United States, but it's there.
It's there, and it means something. So I think loans to a degree can be okay. As for your other observation and question, whether this is only something for small countries. I don't see why; why would it be something only for small countries? I actually don't see what the size of the country has to do with it.
You could always subdivide a big country into smaller units if that's your problem and then say, okay, we
Srini: Yeah. So why do you think it hasn't happened in the United States? What do you think the barriers to this are in the United States?
Bent Fjvberg: I think it's culture, and one of the strongest things we see when we study things around the world is that this thing about, this is the way we do things around here. And that's reason enough to do it around there because this is the way we did it in the past. That's why we do it now, and that's why we'll do it in the future.
Bent Fjvberg: So it is culture. It's culture and habits, and it's very hard to change the culture. Do you know how they say in corporations that "culture eats strategy for breakfast"? So you can have all the strategies you want to change something like this, but if the culture is that we don't do it like this, we don't do it like that, then the strategy will not get implemented.
Srini: Yeah. How is the curriculum different in Denmark versus the United States? Because you went to UCLA, I went to Berkeley. You and I both know this. You sit in these large lecture halls where you're literally just a number, and when you take an exam, you don't even have a name. They just give you a student ID number.
Bent Fjvberg: Yeah. Yeah. There's a bit of that in Scandinavian universities. It varies a bit. There's a new pedagogical model that is being increasingly implemented, which is called problem-based learning. PBL is called, for sure, problem-based learning. And the universities that subscribe to that model typically use much smaller groups of students.
And actually, the students work at the most micro level. They work in groups of five to seven students in each group. And they get projects that they have to solve each term or each semester, whatever the unit is. And then they have some classes to support that.
So 50% of the work is spent on their project, which they do in a group of five or seven people. And 50% of their time is spent in classes, which are typically much smaller than the several hundred students you might see in traditional big lectures. And it turns out actually that the students that are going through that model and the universities that are using that model are performing better than the traditional model, which is the large lecture halls.
So there's a movement away from huge lecture halls toward smaller groups of students because it appears.
Srini: Yeah. Speaking of problem-based learning, what has been the trajectory of your career that led you to write this book?
Bent Fjvberg: I'm an economic geographer by training, so both my bachelor's, my master's, and my Ph.D. are all in economic geography. What a lack of imagination, but that's actually part of the data system that is common. You don't make the same changes as you do in the American system, where you can shift completely from philosophy to economics and then to law, whatever.
So I did it all in economic geography, and that means that I got trained in urban geography and urban economics. So I've been trained at looking at cities, understanding cities, and designing cities, as a matter of fact, to make them work better. At one stage, not long after I graduated with my Ph.D., I observed that cities got built-in bigger and bigger chunks, so everything was getting projected as its own now. So before, you talked a lot about plans, and you had land use planning, and you needed to have a good land use plan for a city, and then you developed the city according to that. That whole conversation changed a while ago into talking more about projects, specific projects.
So we need an urban rail project here. We need a
Srini: Yeah, as a resident of Southern California, I can tell you that public transportation in LA is terrible. It's probably the worst in the country. You opened the book by saying, "Over budget, over time, over and over again." The pattern was so clear that I started calling it the "Iron Law of Megaprojects," and the Iron Law is not a law like Newtonian physics, meaning something that invariably produces the same outcome.
And it got me thinking about a building in India that was across the street from my grandmother's house, and I remember looking at that building when I was there in seventh grade. And it was under construction. Then I went back two years later, in ninth grade, and it was still under construction. Then I went back after my first year of business school. It was still under construction. And then in 2018, keep in mind, this was, I think, 1991 was the first time I saw this building — in 2018, when I went back, I looked across the street, and I was like, "Holy shit, somebody finished this building!"
I remember asking a girl that one of my roommates was dating about the difference between China and India, and she said, "You guys.
Bent Fjvberg: Right? Yeah. So that is a difference between China and we've started that. So we've done a regular scholarly study of how things are going in China. It is a significant result that China is delivering projects much faster than we are in the West, not as people also thought on budget. They actually don't deliver on budget, even though everybody thought so until we did our studies. They go over budget as we do, but they do deliver. So the iron law still applies in China. They just get to it faster, in the sense that they deliver their projects faster. And the iron law is as, as you said, it's a statistical law, but it actually applies with a very high likelihood and a very high level of statistical significance.
Srini: Oh, hey, Brent. I lost you there. Go ahead. Hold on. Just go ahead and press refresh on your browser window. And then we'll pick it up here. I'll have my editor pick this up. Edit it out here, and then I'll tell you where to pick it up. Yeah, just reload the brow. Just, yeah, just reload the browser window. Okay, perfect. Just yeah, if you can turn off your camera and then pick it up where you said, most projects are likely to go over budget. As I said, I'll have my editor edit this out, so don't worry about that.
Ben Fjvberg: Why can't I see where to turn off my camera now? There we go.
Srini: There should be a little more attention paid to detail.
Bent Fjvberg: Yep, got it. Okay.
Srini: All right. So go ahead and then just pick it up from these projects going over budget.
Bent Fjvberg: Yeah. So did you get the thing about China?
Srini: Yeah, I did. And then just talk about why most big projects end up going over budget and all that stuff.
Bent Fjvberg: All right. Did you get the thing about the iron law? So I was in the process of explaining the iron law. Okay. So it's over budgets, over time, under benefits, over and over again; that's the iron law. And, of course, the question is, why is this the case? And it's actually very strong, the case with very high likelihood, with very high statistical significance. So it's really written in stone, that law, even though it is probabilistic and not deterministic, your likelihood is very high. The thing will go wrong for you. It's like going to the casino and having a prediction - you are going to lose, those are your odds, really, that's what it's like. That's behavioral economics, it's called base rates, and we have uncovered the base rates for building big projects, and the base rates don't look good. So the base rates are like the odds if you go and play roulette or go and play blackjack in the casino. And one of the big mistakes that are made in projects is not getting the base rates, so when you ask why this happens, that's one fundamental answer is that people don't get the base.
Srini: Yeah. One thing you say is that most big projects are not merely at risk of not delivering as promised, nor are they only at risk of going seriously wrong. They're at risk of going disastrously wrong because the risk is fat-tailed. Can you explain what you mean?
Bent Fjvberg: Yes. This is actually a statistical expression, fat tails, and it's also called Black Swans. Naim Nicholas Taleb wrote a book called The Black Swan, where he made this term popular and very widespread in use. That these are extreme events, with extreme values on some kind of probability distribution so that it could be a probability distribution of cost, then the fat tail will contain very high costs or very high-cost overruns. Same if you're talking schedule, it'll be very big or very long schedules would be in the fat tail. And it actually turns out, and again, this is something we uncover in the book that hasn't been systematically uncovered before for a large number of project types.
So this is brand new and published in the book, that we look at how fat are the tails for different types of projects. We look at 25 different types of projects, and it turns out that for the vast majority of project types, fat tails are incredibly important because it means that it means that basically, you can't predict the outcomes of these projects, so everybody is acting pretending that you can predict project outcomes mathematically and statistically, and this is science. This is not just something we think you know, or
Srini: Yeah, one of the things you go on to say about this is to think of the duration of a project as an open window. The longer the duration, the more open the window. The more open the window, the more opportunity for something to crash through and cause trouble, including a big, bad black swan. But then you go on to say not only is it safer for planning to be slow, it is good for planning to be slow, as the directors of Pixar well know, after all, cultivating ideas and innovation takes time. Spotting the implications of different options and approaches takes more time and puzzling through complex problems. Coming up with solutions and putting them to the test takes still more time. Planning requires thinking, and creative, critical, and careful thinking is slow, which, you basically say that we want to think slowly and act fast, and yet the duration of the project is also an issue here. So how do you resolve the tension between those two things?
Bent Fjvberg: Yeah. So we distinguish sharply between planning and delivery, or as it's called in architecture, design, and construction, or as it's called in movies, development, and shooting, so this is like a division in two parts of the whole process where the first is characterized by thinking, so you're not doing things yet, you're thinking about and planning what you're going to do, and the second is actually doing it. So actually shooting the movie, if we talk about Pixar. Whereas the first part is thinking about how you're going to shoot the movie and designing the story and casting and everything. It's really important to have that distinction. And the slow part is the thinking part.
When you deliver, you actually want to be fast, and that's the most expensive phase; therefore, you can lose the most in that phase. So that's in the delivery phase, and that's why it's so important to be fast there. And that's where the window of doom applies. It's not so bad if you're hit by something during the planning phase, the damage will be limited, but if it happens during delivery, then you can be in real trouble. And we use, actually, specifically, we illustrate this.
Srini: I haven't, unfortunately.
Bent Fjvberg: Okay, I strongly recommend it. And also to all listeners, if you haven't been to Bilbao in Spain and seen the Guggenheim, Bilbao, you've got a really good thing. You've got a treat waiting for you. You've got to go. It's an amazing experience. And when you see it, you go, "Wow. That must have gone way over budget." But I found out that it was built slightly below budget. The budget was a hundred million dollars, and it was built slightly below, and it was built a few days before the end of the schedule. So it was built on budget and schedule, and it generated ten times the revenues and benefits, both for the museum individually, but also for the city of Bilbao and for the whole region of the Basque region Bilbao is located in.
This project has overachieved on every point, which is like 0.5% of projects. So we calculated this. That's what the iron law says that you have a 0.5% likelihood of delivering on budget, on time, and the benefits that you promised. So here we have
So one other thing that you talk about is how people make decisions during projects. And you say that when people are asked to make a best-guess scenario, the scenario most likely to occur, what they come up with is generally indistinguishable from what they settle on when asked for the best-case scenario.
And you talk about how we typically do make intuitive, instinctive decisions, but this can be disastrous for big projects. So how do you mitigate that?
Bent Fjvberg: You made an indicator by getting the right base rates. So you want to know what the likely thing is? So we have an example in the book about Carol writing his book about Moses in New York. It's called the book is called The Power Broker. And it's probably about the American who has built the most mega projects in history, and Carol was a journalist at a newspaper, so he figured out how difficult it can be to write a book.
And he said, if I have three weeks for a big feature article, that's like a chapter for a book, and if I have ten chapters in my book, then I need ten times three weeks. That's 30 weeks. And or whatever the numbers were that he used. And he actually came in, like it'll take me about ten months to write a book based on his experience as a journalist at the newspaper.
So why don't I say a year, and then I already have some cushion, two months, and I'll be pretty safe that I can write the book with him. That, and then he started, and he realized that writing a book has nothing to do with writing even big articles for a newspaper.
Srini: Yeah. I think that struck me in particular because I remember when I got my book deal, I had this habit of writing a thousand words a day, and it was really easy to publish blog posts. And my editor said, "Can you have it done in six months?" And I said, "Yeah, that sounds reasonable." 45,000-word manuscript, a thousand words a day. I'm thinking to myself, "I'm gonna knock this thing out in 45 days," not realizing that writing a book is very different than free writing or publishing blog posts. Amazingly, I, despite a very wildly inaccurate anchor, did get the manuscript done.
But when I wrote my second book, I realized that I wasn't gonna be able to pull that off. It ended up taking almost 16 months to do it. And I was like, "Okay. Now, to your point, I basically used the wrong anchor," which takes us to this idea of what you call reference class forecasting. I, I assume that's what you mean by looking at finding the right anchor, looking at what other people have done before on a similar project.
Srini: So one thing you talk about in the Pixar process is this concept of the illusion of explanatory depth. How does that apply to projects?
Bent Fjvberg: Exactly. Yeah, we've developed a method for this called reference task forecasting. And Robert Carroll could easily have done a reference task forecast if he had thought about it. And so can all of us. When we do things, he just didn't think about it. And that's also completely common sense when you hear it. So, listen to this. What Robert could have done he would find, let's say, five or ten books that were similar to the one that he was planning to write. He would contact the other authors and ask them, how long did it take you to write this book?
He would get different answers. Somebody would say, uh, 16 months, like you, which would probably be on the fair side. And somebody would say, ten years, which would be on the long side. And then there'd be in the middle. There'd be a bunch of 2, 3, 4, 5. And he could take more than five or ten if he wanted, but five or ten, and you're already in business. If he'd done 20 or 25, and that's pretty easy, when it's about books, and he got the answer from the authors.
Bent Fjvberg: Yeah, so people often think they understand things better than they do. We give an example that is used in psychology. If you ask somebody to actually explain to you how a bicycle works, if you ask somebody, do you know how a bicycle works? Most people will say, yeah, of course. And then you ask them to actually illustrate it by making a drawing about what it is that makes the bicycle work; many people can't do it. They actually don't know the specific mechanics of, of how a bicycle works. So that's the illusion of explanatory depth. They think they have a depth of explanation regarding the bicycle that they don't, so that's just a bicycle. But this applies to everything we do, and it's very important when you do a big project.
So these projects that we talk about, even writing a book, is a pretty big and complex projects, and there's much more opportunity for this illusion of explanatory depth in those big and complex projects. So it's very important to get rid of it. Cause otherwise people think that they know what they're talking about and what they're doing, and they don't, and it's going to be extremely costly because they
Srini: No, one thing you talk about is this sort of idea of the first mover advantage not being such an advantage. Talk to me about that. I have an understanding of it because you look at a company like Google, right? They were actually the sixth or seventh search engine, I don't remember exactly, but I get that if you're not first, you actually get to learn from all the people that have gone before you.
But I think there is this sort of mindset that being first is the biggest advantage, particularly when you're talking about things like Silicon Valley.
Bent Fjvberg: Yeah, this is something I learned the hard way. I moved to Oxford, and I was on the board of the Danish court system, so the Danish National Court System from the Supreme Court all the way down to the city courts. And I was one of 11 board members, and we decided to digitize the Danish court system. And we decided to digitize the Danish CATA system. So that's the system where all property is registered. So all physical property is registered. And we were the first movers. Nobody had done this in the world before. There was no digital court system at that stage, meaning everything was done digitally, nothing on paper unless you printed it out from the digital system.
And there was no CATA system. No property register. There was a hundred percent, unlike anywhere in the world. It was a big mistake that we did this, and it became a huge disaster that was, for years and years, on the front pages of the Danish newspapers with cost overruns and delays. People have nervous breakdowns because it didn't work.
And how can you run a court system if you start a case and then suddenly it disappears, huh? And people stayed at
Srini: It's funny you say that because one of my friends likes to say, he said: "Apple doesn't invent things; they perfect them."
Bent Fjvberg: Yes, absolutely true. And that's insightful.
Bent Fjvberg: And that's what I that's what I recommend. There's you hear this over and over, and there are so many people in project management and project leadership who are so excited about being first with something. This is a lot of this that comes out of engineering. There's nothing that an engineer loves better than to be the first, and who wouldn't? I'm not blaming them. I'm just saying that it's costly. Who wouldn't want to be the first with something, and who doesn't want to be? You know they build the tallest skyscraper; who doesn't want to build the fastest plane, the longest undersea tunnel, etcetera, etcetera? It goes on and on, right? I'm saying that you really have to stop yourself when you get into that kind of thinking and decide whether you are willing to pay the cost that entails and the pain.
Srini: Yeah, let's wrap this up by talking about two things: modularity and let's use a concrete example of applying these principles. Let's use a wedding as an example. Not that I've had one yet, but I figure if I have you here, I could potentially avoid the hell that comes with wedding planning. From what I've seen from everybody who's ever had one, it looks to be quite a hassle.
Bent Fjvberg: Yes. Modularity means subdividing things into smaller parts. So I'm Danish, and I always use Lego, which is a Danish toy, a Danish product that most people know. I use Legos as a metaphor to show what you need to know. And at weddings, the most obvious thing, which we mentioned in the book, is the wedding cake.
It turns out that even the most flamboyant and biggest wedding cake is built from small modules of cake, small modular cakes, that you can just keep piling, and then build a cake, whatever size you want from that. And that's one of the secrets to these fancy wedding cakes.
We generalize that, and it's all the way from the wedding cakes to the climate crisis. Modularity is extremely important regarding the climate crisis, and it's actually our luck that the energy sources, the renewables that are going to solve this problem for us, are hugely modular.
Solar cells are inherently modular. It's called a solar cell, and you put it on a panel. Then you have mini panels, and you have array an array of cells, and you can put in many arrays. You have
Srini: Yeah. Let's wrap this up. Talking about planning a wedding. Let's say, and for the sake of making this a mega project, it's an Indian wedding. I don't know if you've ever been to one, but Indian weddings are definitely mega projects. For example, my sister and brother-in-law, because they're both from different parts of India his family had their community for 40 years in Chicago. We had ours for 30 years in Southern California. And I remember when my sister initially started looking for a venue and said, I want somewhere cool and unique. And then I told her, I was like, unless you're planning on excavating the Titanic from the ocean, I don't know where you're gonna fit 900 people without spending a fortune. So they ended up having two wedding receptions, funny enough. But let's use that as an example. Where would we begin to avoid it from turning into a disaster? Keeping in mind that politics and power will play a role because Indian people all have to invite their parents and friends have to guess at the wedding are people you've met once in your life, but they're close friends of your parents. So they feel entitled to an invite. And
Bent Fjvberg: At the end of the book, we have a quote. It's called 11 Heuristics for better project leadership. Heuristics are rules of thumb that simplify the world for you. And so these are my 11 heuristics for how I would do projects if at actually how I do projects when I do projects, which I do quite a lot.
The first one is called Hire a Master Builder. This would be my top number one recommendation to people who are planning a wedding like that. Get somebody who knows how to do this, who's a master at doing this, and who has a track record of having done it before. Don't hire anybody that doesn't have a track record.
That's important. So hire a master builder. That's the first thing you need to do. And then, of course, you need to do the thinking fast and slow thing. No, thinking slow and fast. Sorry. That you need to think it through before you start. You need to do the Pixar and Frank Gary. You actually need to simulate the wedding, and the more you can chop it into modules, where you say
Srini: Let me, you know, much to my Indian mother's dismay, I'm still single, but it's good to know that I have a heuristic to make it go off without a hitch. This has been absolutely fascinating. I have one final question for you, which is: what do you think it is that makes somebody or something unmistakable?
Ben Fjvberg: Say again? Someone makes something what?
Bent Fjvberg: Unmistakable.
Bent Fjvberg: What does that context?
Bent Fjvberg: Ah, okay.
Srini: In this context, I wrote a book called Unmistakable. The way I defined it was something that is so distinctive that nobody else could have done it but you. It's immediately recognizable.
Bent Fjvberg: That's a really good question. I gotta tell you a bit. So I think that you need to have a very special fingerprint. So I would say a Frank Gehry building is unmistakable. I would say a Pixar movie is unmistakable. I would even say the Empire State Building is unmistakably a building by the architect who did that building.
Srini: Amazing. I can't thank you enough for taking the time to join us and share your wisdom, your story, and your insights with our listeners. Where can people find out more about you, your work, the book, and everything they're up to?
Excellent and excellent, and we'll include those in the show notes. And for everybody listening, we will wrap the show with that. Thank you. That was great.
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