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International Journal of Project Management 19 (2001) 433–435

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Editorial

Towards a holistic approach to strategic project management

Large projects can have large consequences, not only The history of each project was reconstructed in
for those who use them, but also for the organisations depth. Key actors and stakeholders were interviewed,
and institutions that build and finance them. When both for their recollections and their views. Every effort
successful, large projects generate revenues and benefit was made to enter into the frame-of-reference of these
society, but when they go wrong society suffers and the actors; to understand how they approached and dealt
organisations and institutions that are in the business of with large projects. The intent, however, was not to
large projects confront financial difficulties and poten- privilege the point of view of specific actors, but to
tial damage to their reputation. Interest in improving understand how their calculations and actions meshed
the planing, design, and delivery of large projects is with the evolution of the projects. Such evolution is a
therefore long-standing. It has generated a considerable combination of the deliberate and emergent. It is delib-
number of case studies and prescriptions that focus on erate in as much as projects do not get built without
internal management issues such as engineering esti- formal commitment on the part of project participants
mates, scheduling, systems, control, and contractual to agreements and to specific goals. And it is emergent
design. What is patently lacking is a ‘‘holistic’’ approach in as much as conflict and unforeseen events create new
that gives managers an understanding of how to tackle problems and require strategic adaptation.
the complexity of large projects as evolving systems that What balance between the deliberate and emergent
are strongly influenced by their real world context. This must be struck in order to improve the probability of
Special Issue brings together a group of papers that map project success? Past literature on large projects has on
out many of the key issues facing a holistic study of the whole been based on the assumption that emergence
large projects. and strategic adaptation are at best necessary evils.
The papers in this Special Issue are varied in content, Thus, every attempt should be made to make project
but with the exception of the paper by Rodney Turner planning and execution as deliberate as possible, by
and Stephen Simister, they share a common research developing frameworks that identify all contingent
context: They all emerged from the ‘‘International Pro- risks, and by designing projects in such a way as to
gram on the Management of Engineering and Con- maximise the ability of managers to exert control.
struction’’, or IMEC1. This research program which was The first paper by Roger Miller and Don Lessard
conceived and championed by Roger Miller from the suggests that making prediction and control the touch-
Université du Québec à Montréal, Montreal, Canada, stones of large-project planning is myopic and counter-
was expressly designed to study large projects as evolu- productive. Projects are admittedly risky, but beyond a
tionary systems, with as few preconceptions as possible. certain point reducing risks by exhaustive analysis and
The program identified sixty large projects world wide. projection prior to commitment can breed conservatism
Most of the projects were in the energy and infra- and inflexibility. It is better to begin with a realistic
structure areas. They included thermal, hydro, and picture of the risks and then structure an approach that
nuclear power plants, oil platforms, mass transit sys- improves readiness to deals with unexpected risks when
tems, and toll roads. Twenty of the projects were built they emerge. Miller and Lessard base their approach on
in North America, 20 in Europe, eight in Latin Amer- a four-fold distinction between risks that are within the
ica, and the remaining 12 were built in Asia. control of key project actors and those that are not; and
risks that are specific to the project as opposed to risks
that are broader in origins. Each of these categories of
1
risk should be handled differently if and when they
Results of the IMEC study are presented in The Stategic Man-
arise. Miller and Lessard call their approach ‘‘layering’’
agement of Large Infrastructure Projects, Roger Miller and Donald L.
Lessard (Eds), MIT Press, Boston, 2001. The paper by Miller and because it entails managing and dealing with risks as
Lessard, Floricel and Miller, and Hobbs and Andersen, are adapted project evolution exposes new ‘‘layers’’ of risks that
from chapters in that book. could not have been foreseen initially.
0263-7863/01/$20.00 # 2001 Published by Elsevier Science Ltd and IPMA. All rights reserved.
PII: S0263-7863(01)00050-3
434 Editorial / International Journal of Project Management 19 (2001) 433–435

Building on these insights, Serghei Floricel and Roger particular product uncertainty, can undermine goal
Miller develop a perspective on the management of alignment. Contractual design is therefore a reflection of
large projects as strategic systems. They argue that the the need to maintain and if necessary regain this goal
strategy and organisational design of large-scale pro- alignment, rather than an attempt to economise on the
jects must be based on the awareness that some risks costs of setting up and administering contracts.
can be anticipated while others cannot. The organisa- The paper by Brian Hobbs and Bjørn Andersen which
tional and strategic properties that deal with anticipated follows the one by Turner and Simister, also begins by
risks is termed ‘‘robustness’’, while instilling organisa- exploring the disjunction between contractual design
tional and strategic properties that deal with the second which is based on normative economics, and project
is termed ‘‘governability’’. Robustness is generally a governance that is relational in nature. Hobbs and
product of deliberate prior strategizing. Governability, Andersen criticise the tendency to polarise these per-
by contrast, is the unintended consequences of strate- spectives; to argue that projects should be either one or
gizing. It is emergent rather than deliberate. the other. They suggest that it is possible to mix these
Floricel and Miller suggest that managers are not options. Front-end processes can be internalised
generally able to customise robustness and governability (usually within the owner’s organisation), or they can be
according to the specific requirements of each project— jointly enacted by owner, contractor, and other relevant
the sheer complexity of large projects precludes this players. Execution can likewise take place on an arm’s
possibility. Instead, managers select from a limited length basis, i.e. the contractor is left to execute without
number of coherent and stable project configurations involvement of others, or it can be a relational process
which they term strategic systems. They discuss three where many of the parties involved work to solve pro-
such strategic systems: rational-adaptive, entrepreneur- blems and explore new opportunities. These two
ial, and relational. The selection of these types depends dimensions define four configurations of project devel-
on the type of sponsoring organisation, context, and opment and execution. Hobbs and Andersen explore in
basic technological characteristics. Rational-adaptive length the two types that have relational execution in
strategic systems are usually selected by government common: projects in which owners drive the front-end
agencies and large regulated firms that operate or are process with little input from contractors prior to
embedded in power or transportation networks. Entre- execution, and projects in which owners, contractors,
preneurial strategic systems, by contrast, occur under and other involved actors work together throughout the
deregulation and privatisation—often with projects that life of the project.
are lower in size and complexity. Relational strategic Hobbs and Andersen show that each of these config-
systems also occur in the context of deregulation and urations contain considerable variations. In other
privatisation, but they are favoured by sponsors and words, there are no pure governance types. Projects are
firms intent on building and owning a portfolio of pro- sensitive to industry and national contexts. They incor-
jects with low technological and market risks. porate practices that are not explained by abstract pro-
The next two papers in this issue examine the crucial ject categories. This leads Hobbs and Andersen to reject
issue of the relationship between project participants. the pervasive tendency in project management to iden-
The first, by Rodney Turner and Stephen Simister, tify and transfer ‘‘best practices’’ as a way of improving
while not a product of the IMEC research program, project effectiveness. Most projects follow practices that
contains important insights that reinforce IMEC’s per- have been fine-tuned over many decades, not because
spective and key findings. managers are hidebound conservatives, but because
Turner and Simister examine the relationship between they are acutely aware of critical nuances in their con-
client and contractor, in particular the issue of contract text. Innovation in project management practices there-
design that governs this relationship. Current practices fore occurs when established practices can no longer
in this area are largely the product of past experi- deal with new problems. It is at this point, that man-
mentation legitimised by conventional wisdom. Inevi- agers explore new possibilities within the ‘‘pregnant
tably, there is a desire to put the foundations of contract complexity’’ implicit in the large number of permuta-
design on more solid theoretical footings. Transaction tions and combinations of existing project practices.
costs theory is an obvious candidate, but as Turner and For the most part, IMEC focused on individual pro-
Simister show, in spite of its appeal and undeniable ele- jects, or more precisely on the strategies, organisation,
gance, this theory does not predict current contractual and practices that enhance the planning and execution
practices. These practices, they suggest, are shaped by of individual projects. This project-centric perspective is
uncertainty about process, product, and purpose. The consistent with the dominant comparative approach of
choice of governance structure is not driven by ex ante project management research where projects are seen in
demand to reduce risk, as transaction cost theory would isolation. Projects, however, are part of a larger ecology
predict, but by the need to achieve goal alignment of projects; an ecology in which certain types of firms
between the client and the contractor. Uncertainty, in and institutions play a pivotal role as repositories of
Editorial / International Journal of Project Management 19 (2001) 433–435 435

knowledge and expertise. This knowledge and expertise and the urgency of the need to manage them more
is essential for the functioning of the large-project sec- effectively is therefore not in dispute. Yet in spite of
tor, and for this reason IMEC also gave attention to the decades of experience it is difficult to say that sub-
strategies and organisation of these players. The paper stantial progress has been made towards improving
by Joseph Lampel examines the strategy and core com- performance, in part because the scale and complexity
petencies of one key type of large-project players: engi- of large projects keeps increasing, but also because dis-
neering–procurement–construction, or EPC firms. An tilling this experience into prescriptions and ‘‘best prac-
important challenge facing EPC firms is how to balance tices’’ has its limits. This Special Issue attempts a
efficiency and flexibility under conditions of project and holistic approach to the study of large projects. Such
market diversity. Striking this balance takes place at the an approach holds the promise of a strategic theory of
operating and strategic levels. At the operating level project management. Achieving this goal, however, is
EPC firms build core competencies that contain the tacit not without conceptual and methodological problems:
and codified knowledge needed to effectively execute large-scale projects are difficult to study in their totality.
projects. Based on field work in the USA, Canada, the Yet as the papers in this Special Issue show, in spite of
UK, France, Malaysia, and Japan, Lampel identifies such difficulties a holistic approach holds promise.
four kinds of EPC core competencies: entrepreneurial, What is needed now is more research and more work
technical, evaluative, and relational. These core compe- that explicitly aims at developing theory and practice
tencies are the product of learning and experience, but that was a comprehensive and strategic perspective in
they are constantly challenged by new market opportu- mind.
nities. Thus, at the strategic level, EPC firms face funda-
mental tradeoffs when it comes to developing and
managing their project portfolio. Based on these tradeoffs, Joseph Lampel
Lampel identifies three types of generic EPC strategies: University of Nottingham Business School
focusing strategy which is competency driven, switching Jubilee Campus
strategy which is market driven, and combining strategy Wollaton Road
which attempts to balance these two imperatives. Nottingham NG8 1BB
Large projects have always exercised fascination and UK
bred controversy. Their impact on society is undeniable, E-mail address: Joseph.lampel@nottingham.ac.uk