What the Olympics can teach us about project initiation

Getting a region ready to host the Olympics is a monumental undertaking and one that brings a lot of risks. If managed right, these risks can provide significant benefits; if not, they can cost a region or country dearly.

Over the past couple of decades, experience and research have revealed that, without an effective initiation, programmes fail to achieve their goals, often devolving into chaos, leading to budget and schedule overruns.

Megaprojects as production systems

An article published in the Project Management Journal, written by Juliano Denicol, Andrew Davies and Ilias Krystallis, revealed 18 causes of poor performance across six themes: decision-making behaviour; strategy, governance and procurement; risk and uncertainty; leadership and capable teams; stakeholder engagement and management; and supply chain integration and coordination.

The study found that no single, isolated factor was responsible for failure in megaprojects, with a number of interrelated factors contributing equally to poor performance. It suggested that megaprojects should be understood and explored as production systems, encompassing all stages of the life cycle, from planning to operations.

Five critical areas for improved delivery success were identified as: designing the system architecture; bridging the gap with manufacturing; building and leading collaborations; engaging institutions and communities; and decomposing and integrating the supply chain.

The International Olympic Committee (IOC) warns hosts that the number-one cause of cost overruns, excluding inflation, is over-engineering the venues, i.e. allowing architects to design their idea of an iconic stadium. In my experience, the second is contractor claims. Both are controllable if the organisation is set up to make and enforce hard decisions.

The most important outcome is trust

I’ve initiated four Summer Olympic and Paralympic Games programmes since London 2012 and have realised that the single most important outcome for a Games programme initiation is building trust. Client organisations that are responsible for Games programmes are often led and staffed by people who know the local construction market or have produced entertainment or sporting events, but very few have been through the process of getting a region ready for an event of this magnitude, to the standards required by the IOC.

Games programmes need to build trust quickly so that people will work together to:

establish the governance to lead the programme
build teams that collaboratively define what they need to do and how they’re going to do it
develop delivery strategies and define the projects
engage stakeholders and the supply chain in ways that reduce or eliminate the ‘Games surcharge’ and downstream claims.

The other key outcomes for successful initiation

I’ve seen the pitfalls of neglecting to formally initiate a Games programme and the amazing results that come from a well-executed initiation. However, initiation isn’t a solution in and of itself. Initiation must achieve specific outcomes that are different for every Games programme. Some of the key outcomes needed from a Games initiation, and indicators that it has been a success, include:

Strategic alignment: a palpable sense of direction toward a vision that describes the benefits the region will receive in exchange for hosting the Games.
Clear governance structure: a transparent and easy-to-manoeuvre governance and decision-making structure adhered to by all parties that assures outcomes and benefits are being delivered.
Comprehensive programme controls: secure, proven and usable systems that support timely, defensible decisions with schedule, cost, risk and change information.
Effective stakeholder engagement: stakeholder needs and influences are used to create partnerships, reducing friction and easing delivery.
Team cohesion and culture: a work environment where high-performing teams thrive, demonstrated by enthusiasm, trust, clear communication channels and a sense of collective purpose.
Risk management and assurance strategies: programme-level strategic risks with active management plans and project-level risk used to incentivise the supply chain to reduce costs and claims.

A well-initiated programme stands on a solid foundation of strategic alignment, operational readiness and stakeholder consensus. It’s marked by a culture of transparency, collaboration and resilience. When you see a programme that progresses with minimal disruptions, meets its milestones, adapts to challenges and maintains the support of its stakeholders, you know its initiation was done right.

Find out more about megaproject success by listening to the APM Podcast episode ‘The hidden side of projects: Why they fail and what you can do about it’ wherever you get your podcasts