Complex projects and public-private partnerships (P3s) are easy to define but hard to execute as they involve collaborations between public entities and private sector firms to finance, build, maintain and operate infrastructure projects. Sometimes they involve more than one public entity involved within the project. P3s allow governments to tap into private sector expertise, efficiency, and capital, all while sharing risks and responsibilities based upon the respective parties’ expertise and positioning. This arrangement is particularly useful for large-scale, long-term projects in sectors such as transportation, utilities, healthcare, and education; but have also been utilized in social infrastructure.
I say they’re hard to execute because of my own experience and research in large scale projects but also as per a great book I read recently: “How Big Things Get Done” by Flyvbjerg and Gardner. The authors provide a startling statistic: only 8.5% of large projects meet their budget and timeline. Further, only 0.5% of them hit their budget, timeline, and accomplished the goal as outlined by the purpose of the project.
Simply put, large-scale infrastructure projects are prone to severe underestimation of costs, delays, and failure to meet original expectations. The authors primarily analyzed mega projects, but even thematically, there is a lot to glean and consider as per this startling statistic.
So, why do these projects perform so miserably when analyzed? Pssst, it’s poor planning.
The Perils of Poor Planning
Overall, the projects we are talking about involve considerable resources, long timelines, multiple stakeholders, and substantial economic, social, or environmental impacts. They often require a balance of diverse expertise and face high levels of uncertainty and risk.
“Think fast, act slow” is the norm in complex projects. Decision-making is often rushed due to political pressures, resulting in poor planning and unrealistic expectations.
I argue that “think slow, act fast” is a far better path, as corroborated in the book as well. That is, deliberate and thoughtful planning followed by swift and decisive execution is key.
How can counsel play a role? Be curious. Ask questions. Seek clarification. Challenge conventional thought. Fight the urge to groupthink. Seek to be in several planning meetings and question assumptions. As their counsel during this project, explain to your client the role you envision as being one of a trusted advisor who will actively participate and provide inquiries or challenge perspectives when needed—there’s a tactful way to be curious without coming off as a downer or a contrarian.
Planning is so very important; it’s natural to want to act first, but focused deliberative planning is what truly impacts the overall goal. Help your client gain realistic expectations on the project overall, as well as about discrete items. Have the team research other similar projects out there to identify as much as possible about those projects and their challenges in order to obtain a reference class forecasting group which can help align strategy with goals and expectations by relying upon data and evidence. Delivery is also very important, but for different reasons. We should strive for swift delivery because time is an enemy once action commences.
Political pressures often distort decision-making and the messaging surrounding a project. Political agendas can lead to projects being launched without proper analysis. Politicians often want to show progress and visible outcomes, which leads to strategic misrepresentation, which involves underreporting costs and risks to gain support. Politics play a role and likely will always play a role. Irrespective of reason, it’s a part of this overall mixture.
For example, perhaps it’s the client who is viewing things too optimistically and inadvertently misrepresenting a facet of the project—approving a schedule which is too tight for the project because it aligns with some sort of election cycle or term in office. Or ignoring downstream maintenance costs due to an expansion when discussing the overall cost of the project.
I used to say that the biggest P in P3 is partnership; but I now believe it might be the silent “p” of “planning.” Planning is not a passive task. It can and should be very active and involve several stakeholders and myriad experiences. Of course, there is an inclination to act and get going on a project, but there are very strong arguments for being tenacious in your dedication to planning and creating an active plan which can be easier to execute. This is true particularly in the public sphere, but occurring in the private sector too is the reluctance to change course because of a sunk cost fallacy, or commitment fallacy.
Potential Biases
Decision-makers, once committed to a project, are often reluctant to admit mistakes or course-correct due to sunk costs or political stakes. The sunk cost fallacy is that past investments (both time and money) should not influence future decisions on whether a project should continue, but they often do. This bias leads to a situation where projects continue despite evidence suggesting they should be reevaluated or abandoned altogether.
Or maybe there is a sense of optimism bias within the dynamic where people often have an inherent belief that their project will succeed despite evidence of the contrary. Or perhaps it’s a case of uniqueness bias, wherein decision-makers believe their specific project is unique and exempt from the common pitfalls that have affected other similar projects. This leads to overconfidence and subsequent underestimation of risks.
Within the public sector, there is political bias at play, as well as a self-preservation bias. The self-preservation bias manifests in choosing to not provide a full report on the progress (or the lack thereof) of a project to the respective bosses; this act results from a self-preservation mentality and an optimism bias, while attaching to the sunk cost fallacy like a life raft.
So, politics, both the big P that manifests in political parties, as well as the small P, that manifests within your very team, both play major roles, and we should be mindful of their influence.
Clarity of purpose for the project/goal and a commitment to realism, transparency, and communication within the project is key. Projects don’t go wrong, they start wrong. When goals aren’t locked in or alternatives aren’t fully considered, the foundation for failure is laid early. It’s crucial to clarify the purpose and end goals early on and continuously remind the team of the larger mission throughout the project. Again, planning is slow, but delivery must be fast.
High-quality plans are based on careful analysis and consultation. Rushed decisions often lead to poor outcomes. Planning should focus on long-term success, not just immediate action. Proper preparation ensures swift execution when the project is underway.
Further, deliberative decision-making trumps quick action. Intuitive decisions often lead to long-term failures for projects. Projects can suffer from a desire to get going, as this urgency can undermine planning efforts. Planning is a dynamic, ongoing process, not a one-off task.
How to Execute a Successful Project
So, taking into stock the above perils of poor planning, what can one do? First, define clear objectives and strategic goals—what does your client want to accomplish? What’s the mission? What’s the problem to be resolved? This insight might take a while to arrive at as the goal needs to be clearly identified and articulated first. Next, conducting a community needs assessment: understand the public need and how the P3 can address infrastructure gaps or service delivery challenges. This involves both outreach and receiving feedback and helps with overall communication and transparency.
Next, set a clear vision. Clearly articulate the project’s long-term goals. A shared vision across public and private sectors helps maintain focus and aligns all parties around common objectives. Early alignment of goals ensures that stakeholders stay engaged and motivated throughout the project’s lifecycle.
Furthermore, develop a blueprint for cost, budget, timeline, and resource allocation. Identify both capital and operational expenditures, determine the financing structure (whether through tolls, availability payments, or other mechanisms), and set a realistic budget. Appreciate and consider lifecycle costs (both capital and ongoing maintenance/operations). Understanding the public sector’s funding constraints and the private partner’s financial expectations is of utmost importance. Moreover, establishing a realistic timeline is critical. Factor in construction schedules, permitting, stakeholder engagement, and political timelines. This may require some challenging conversations internally, but iron sharpens iron. Additionally, identify both human and material resources required at each stage of the project. The success of large-scale projects depends heavily on the expertise and capacity of both public and private partners. Building an experienced team will lead to better results. It is imperative to align cost and timeline projections early and involve both financial and operational experts from both the public and private sides to ensure a balanced and feasible project plan.
Know Your Audience and Delivery Method
Next, engage the identified stakeholders to secure political support. P3 projects are generally long-term, spanning multiple political cycles. Securing bipartisan political support ensures continuity in leadership and commitment to project goals. To devise a public and private sector buy-in, engage with key stakeholders, such as local communities, government agencies, and the private sector, to better understand their concerns and align their interests. This may manifest in the form of host industry days to garner private bidding interest; open houses to hear from citizens; and committing to a sense of openness. Transparent communication about project goals, impacts, and progress helps garner support and manage resistance, particularly from the public or interest groups. Engage resistance from a curiosity posture. While maintaining the realism commitment and being transparent, recognize that different messages from the same overall vison/goal posture may work well for different audiences.
The delivery method, whether design-build (DB), design-build-finance-operate (DBFO), or another model, will thus vary depending on the project’s needs, risks, and financial structure. The choice of model determines the level of control, risk, and responsibility that each party assumes. Much has already been written about various options but here’s a key: Ensure the project delivery model fits the project's scope, funding mechanisms, risk allocation preferences, and capability of the client.
Can it Even Be Done?
Analyzing the capabilities of both the client and the partner is another component for success. Introspection sessions with the client is a critical step to undertake. Who will be primarily responsible on the client’s side for the work required under the contract? Is it a group of individuals? A singular person? What reporting mechanisms are to be in place? What is the decision-making framework? Do the people identified have experience within the realms contemplated?
You do not want a first-time pilot flying you across the ocean. It is not only critical, but also necessary to ensure that the legal, financial, technical teams are all coordinated and communicating, and not siloed within their own respective spheres. Siloing leads to miscommunication and a delay in the distribution of critical information, subsequently leading to decisions being delayed.
Bespoke is great for a nice suit, but not for large projects. Do not reinvent the wheel if someone, somewhere has already built a perfectly capable and acceptable method.
You also want the flight attendant, and not the pilot, to be the optimist. The pilot, or the project manager or leader of the project must be a realist. This person must ask hard questions, must see the entire field, have a command of the overall project, and be decisive.
Further, when considering a project or capability, be very mindful of uniqueness bias. This refers to the cognitive tendency where people believe that their own situation, project, or experience is unique and will not follow the patterns or risks that apply to others. In the context of large-scale projects or planning, this bias manifests when decision-makers or stakeholders assume that their project is exempt from the common pitfalls, errors, or failures that have occurred in similar cases. This bias leads to overly optimistic predictions and unrealistic expectations, often resulting in unforeseen problems or cost overruns. We underestimate risks and overestimate benefits, partly because of the belief that our specific project will be the exception to the rule. This can lead to miscalculations and significant project failures or delays.
The uniqueness bias is a form of optimism bias, but it is particularly dangerous in complex projects where past lessons and data from similar endeavors could be crucial for accurate forecasting and planning. This bias can distort decision-making, making it harder to anticipate potential challenges, thus leading to more ambitious but less realistic project expectations.
Scope it Out
Scope is an easy word to use but challenging to control. Continue to ask: what is our goal? What is our mission? Write it on a sign on the wall in the office. Remind yourself. You want to clearly define what is expected from both parties. This includes design specifications, environmental considerations, construction timelines, operational standards, and performance metrics. Technical specifications are very important, and it is vital to incorporate proper checks and balances to ensure accuracy. The better the planning upfront, the better the chance that scope is maintained throughout the project.
Utilize reference class forecasting to best understand how projects like one you are contemplating occurred and educate yourself on the challenges they confronted. Be mindful of strategic misrepresentation of items to sell the project (e.g., number of jobs created; election timeline; total investment; lessening of congestion; and rider rate, among others).
The Timeliness of it All
Time is the enemy once you begin a project and move earth. Projects that drag on too long tend to involve more challenges, like escalating costs and delays. You’re increasing the risk of unknown liabilities percolating if the delivery schedule is not realistically aggressive. Again, fast execution after slow, thoughtful planning is crucial for ensuring that projects meet their objectives within reasonable timelines.
Planning Breeds Innovation
Planning is where creativity and innovation can flourish. Project innovation during the delivery phase is limited by the pressure to meet timelines and the rigidity of the scope. Consider advocating for a transparent process in planning, forecasting, and execution. Disputes can often be minimized if stakeholders understand how decisions are made and what the criteria for those decisions are. Transparency further helps in building trust and ensures that all parties have a clear understanding of the project’s goals, risks, and constraints. Effective communication is crucial in resolving conflicts. Project leaders must ensure that all stakeholders are kept informed of changes, risks, and potential issues. Open and honest communication can prevent misunderstandings that may escalate into disputes.
Building the Greatest Team
Remember the whole thing is a partnership—with sister public entities and with the private sector. As someone who has played sports my entire life and football in college, I deeply understand the value of teamwork; there are few sights more beautiful than watching a football game where the offense is methodically moving down the field because all eleven players are executing as one and not as individuals.
Then, it goes without saying that you want to build the best team you can. Traditionally, that means identifying those who have worked on something similar in the past. We learn through experience—I for one know that my direct experience has brought forth a level of certainty on project dynamics. But while I appreciate experience, I also appreciate knowing that there is always more to learn. Effective leadership is a quality which cannot be understated. There are qualities we would all probably point to when thinking about what makes a good leader. One quality perhaps less present is the quality of tacit knowledge.
Tacit knowledge refers to the experience-based understanding that is hard to articulate but supremely valuable for decision-making. Experience provides insights into risks and challenges that cannot be easily quantified but are vital for successful project management. I have witnessed this in my own practice, in working with more senior partners and learning something through nuance or educating our younger lawyers via my own experience. You can also educate your clients (and they, you). Again, maintain your sense of curiosity and continue to ask yourself and your team “what is the goal?” Paying consistent attention to the purpose with clarity will help you and your team maintain focus.
The Benefits of Modular Thinking in Project Execution
Modular thinking allows teams to break down projects into manageable components that can be executed concurrently, helping speed up delivery while ensuring that planning doesn’t suffer. Modularity is a great way to mitigate risks and provides for economic scaling. If many items can be created and fabricated at one time and fit within the larger project goals, modularity can help with both time and cost certainty.
Moreover, the day after the contract or project is completed and the asset is turned back over to the public entity, what is the plan? Think of answering these types of questions while you are in the active planning phase of a project. You will not be able to predict them all, but having a composed mindset with the goal in mind allows for such downstream topics to swim to the surface.
Concluding Thoughts
Be mindful of short-term vision/gains for political wins. They generally do not provide for sustainable project success. However, also be a realist. You know your client and the dynamics they face to deliver. At the closing of the book, one of the takeaways is that you are the biggest risk. That especially hit me, because I know it’s true.
This underlying truth further emphasizes the importance of factoring in human behavior—specifically, the biases, decisions, and actions of individuals—as a critical influence in the success or failure of large-scale projects. We are human. We are imperfect. Humans are inherently the biggest risk factor in projects, particularly when emotions, ego, or political interests are involved. This is why careful attention must be paid to ensuring that decisions are made based on evidence, critical evaluation, and realistic assumptions, rather than being driven by groupthink, overconfidence, or strategic misrepresentation.
My goal at the outset was to share some lessons I learned in my experience steering and managing projects and to identify these aforementioned items in the hopes of elevating the collective consciousness of those who work on, or seek to work on, transformational projects. Thank you for your time.
