Global spending on capital projects and infrastructure is expected to hit US$29 trillion by 2020 but more than 70% of projects fail. New research by University of Technology Sydney and BI Norwegian Business School provides a tool to ensure success.

By Gita Sankaran

Posted on December 10, 2018

70% of all projects fail to meet the triple constraints of the ‘iron triangle’ of being on time, on budget and on scope, a figure that rises to over 90% for medium-sized and large projects. This is particularly concerning as PwC reported that global spending on capital projects and infrastructure between 2014 and 2020 could reach US$29 trillion. But there is help at hand.

Two project management scholars presented a new tool for leading projects to success on 6 December at the University of Technology Sydney (UTS).

Ralf Müller from the BI Norwegian Business School in Oslo, Norway and Shankar Sankaran from the UTS School of the Built Environment presented the findings of their research based on more than 50 case studies in nine countries. They investigated projects ranging in size from 50 to 10,000 people in 10 different industry sectors from 2015–17.

The topic of leadership has gained importance in project management research since the 1990s as it was realised that effective leadership can contribute to a project’s success.

Traditionally, projects were led by a formally appointed project manager who employed a vertical leadership approach or ‘was the hero’. With the publication of the Agile Manifesto in 2001, the concept of self-organising teams became popular, especially in the IT sector, where ‘every team member was a hero’.

However, as projects increased in scale and complexity, both these leadership styles were found wanting.

The researchers suggest the best project management approach is a combination of the two earlier approaches, or ‘balanced leadership’. They propose that a project’s chances for success are maximised when leadership authority dynamically shifts, at any given time, to the person best suited to lead for the issue at hand.

They came up with a framework, which identified the five events in the balanced leadership approach: nomination (or selection of a suitable team for the project); identification (of possible horizontal leaders); selection (empowering one or more horizontal leaders for a particular task); horizontal leadership and governance (completion of the task, led by the horizontal leader and overseen by the project manager); and transition (or termination of the horizontal leadership).

The scholars admit that balanced leadership can only work if the project manager and horizontal leader occupy the same ‘socio-cognitive space’, that is, they have a common understanding of the three elements of empowerment, self-management and shared mental models, and the horizontal leaders are accepted by the rest of the team. As Professor Müller noted, “While you may have technical expertise, you also need political expertise to succeed.”

The study results showed that 83% of the decisions delegated to horizontal leaders were technical decisions, where the project managers relied on the specific expertise of the horizontal leader.

As one Swedish project manager put it: “In the technical part … [the horizontal leaders] take more or less all the decisions … it’s sometimes quite hard for me to understand … Sometimes I have to trust [them].” A vertical leader in Australia, added: “It’s a democratic model, so the decision is made as close as possible to the person who is implementing the change.” However, vertical leaders are less likely to relinquish their authority over the time, cost and scope of the project.

Another finding was that cultural differences in leadership styles of vertical leaders can impact on the success of the model. For instance, countries like Australia and Canada prefer more autocratic and transactional styles of leadership, while Scandinavian countries prefer democratic and transformational styles.

Professor Müller, who had 30 years of experience as a practitioner before he became an academic, reflected: “I have personally experienced this. As a German I was used to a project manager telling the team what to do. But when I moved to Scandinavia, there was no ‘hero’ in the room, and the team didn’t want a ‘hero’.

While balanced leadership may not be a panacea, it can certainly help improve the current shocking project failure rates.