24 Sep White Elephant Projects – How to Avoid Them and Deliver Successful Projects
A “white elephant project” is a phrase which is used in reference to a financial endeavor which fails to live up to its expectations. A “white elephant project” can be used in reference to a completed project or one whose undertaking is still ongoing. The phrase has its origins in Southeast Asia which is home to Asian elephants known as white elephants due to their unusual pigmentation, which instead of being grey, have a pink pigmentation.
Black Swan vs. White Elephant in Project Management
In the realm of uncertainty and risk management, two intriguing concepts, Black Swans and White Elephants, provide valuable insights into unforeseen events and misguided endeavours.
Nassim Nicholas Taleb, a Lebanese-American essayist renowned for his work on randomness, probability, and uncertainty, introduce the term “Black Swan” in his 2007 book. Taleb’s seminal book, “The Black Swan,” hailed by The Sunday Times as one of the twelve most influential books post-World War II, delves into these phenomena, emphasizing their extreme rarity, unpredictability, and retrospective clarity.
In the context of project management, a Black Swan event occurs when a project experiences a staggering cost overrun averaging 200% and a schedule overrun of nearly 70%. This concept was introduced by professors Bent Flyvbjerg and Alexander Budzier of the University of Oxford in their 2011 research. A classic illustration of a Black Swan event in project management is the case of Levi Strauss, where a modest $5 million IT migration project in 2003 spiralled into a colossal $192.5 million loss and the resignation of the chief information officer in 2008.
Unlike Black Swan events, which are often unforeseeable, White Elephants are typically identifiable in advance but are pursued for reasons such as political agendas, organizational inertia, or flawed decision-making processes.
In project management, White Elephants denote initiatives or projects marked by high resource investment but minimal returns. Examples of White Elephant projects abound, encompassing extravagant technology implementations, unnecessary infrastructure ventures, or endeavours influenced by personal agendas rather than strategic imperatives (IMT-PM 2024).
How to recognize a white elephant by its footprints
White elephants are especially dangerous in the current context of constant technological change, heightened customer expectations, and new challengers with digital business models.
They emerge as ambitious digital transformation projects destined to overhaul a core part of the business. Then a few things happen along the way, causing them to balloon and overload the organization:
Unclear goals that change all the time distort the project because the more people get involved, the more the project strays from its original objective
The project’s scale spawns unrealistic expectations whose optimism is rarely moderated through independent evaluation
Changing specifications during implementation cause budgets to blow up and delays to accumulate
Project management focuses on big long-term outcomes with no intermediary testing and little or no consultation with end consumers.
If you look closely, you’ll find this manner of operating that leads to white elephants in almost every industry.
A white elephant adds pressure to an organization in many ways, but some consequences are more damaging than others.
Organizations that breed white elephants:
- Miss out on revenue opportunities because they ship costly projects with long time-to-value
- Dilute their competitive edge because they can’t keep up with market demands
- Deprive themselves of network effects by building products destined solely for the organization’s use
- Cause long-term stress for the entire company. (additiv 2023)
10 of the World’s Greatest White Elephants
£10bn – NHS Connecting for Health programme
From its inception in 2003 it was realised that this was a large and significant technology programme, quoted as “the world’s biggest civil information technology programme”. In such a large and complex IT programme run over several years, it is impossible to isolate a single point of failure. Reservations were being raised as early as August 2005, and the programme was not cancelled until July 2011. However, two points are uncontestable:
1.Scope of the programme was huge – too large to be readily managed by even the most experienced tea
2.End-user buy-in was not managed, and support among stakeholders was consequently very low: in 2008 two-thirds of doctors said they would refuse to have their own medical records stored on the system! (citi 2024)
£500m – e-Borders programme
This failure is rather well summarised in a recent Daily Telegraph article headlined Government IT projects fail because of politicians, not programmers where the author identified a host of reasons why this Home Office programme failed. Chief among them were that the requirements were not captured, and the project was planned on the basis of poor assumptions. For example:
1.When the system was ordered in 2007, no one in government realised that the objectives were illegal under EU law.
2.The pilot was only tried at airports and it was assumed the system would work at ports and the Channel Tunnel and It didn’t. (citi 2024)
The National Centre For Popular Music United Kingdom
Opened with lashings of Millennium celebrations money in the northern city of Sheffield, this weird-looking museum completely bombed – largely because it was pretty terrible. It managed to stay open for 15 months, with barely a soul bothering to visit, before the four silver curling stone-shaped “drums” were left empty.
The Sheraton Hotel, Cook Islands
If the Sheraton had ever opened, it would have been the largest resort in the Cook Islands. But it got to 90 per cent completion before the project collapsed amid plenty of rumours about the Italian investors behind it.
Olympic Stadium, Montreal
The Olympic movement is a world class generator of white elephants, with the stadium built for the 1976 Olympics in Montreal being perhaps the most notorious. Initially nicknamed “the Big O” due to its doughnut-esque shape, this soon changed to “the Big Owe” due to the extravagant construction costs. It cost just under CA$1.5 billion (NZ$1.66 billion), and despite repeated attempts to find a permanent tenant, the stadium is just too big for Montreal’s sports teams.
The Maginot Line France
Between 1929 and 1938, in a bid to repel a would-be German attack, France built a series of expensive fortifications along its borders with Italy, Switzerland, Germany and Italy. And, after 3 billion francs had been spent on the project, Germany just went through Belgium instead before exploiting one of Maginot Line’s weak spots in the Ardennes. Some sections are still standing as museum pieces.
Ciudad Real Airport Spain
In classic Don Quixote country, the attempts to open an airport at the cost of €1.1 billion (NZ$1.8 billion) went about as well as the hapless knight’s escapades. It struggled along for three years, until the last of the low-cost carriers pulled out in 2012. Alas, no-one really wanted to fly to Ciudad Real. Now, the airport sits empty, waiting for someone to buy it.
Berlin Brandenburg Airport
Originally designed to replace Berlin’s somewhat shoddy Tegel and Schonefeld airports, this new airport has been plagued by delays and cost overruns. Originally planned to open in 2011, it keeps getting pushed back. The original €2 billion cost has now ballooned to a projected €7.3 billion and, due to rising demand, the existing terminals of Schonefeld Airport will have to be incorporated into the project.
Naypyidaw, Burma/Myanmar
It’s one thing making a white elephant building, but quite another to make a white elephant city. The capital of Myanmar got its status in 2005, and since then the government has spent lavish sums on stadiums, temples, government buildings and hotels. The official population is estimated at just over 900,000, but this is highly optimistic. More to the point, the city is four times the size of London, meaning population density is staggeringly low, and the multi-lane highways and shopping centres are largely empty.
New South China Mall, Dongguan
In terms of gross leasable area, this is the largest shopping mall in the world. But it isn’t half in the wrong place. Dongguan is an industrial city, largely inhabited by migrant workers who haven’t got the cash to splash on regular shopping sprees. Since opening in 2005, the New South China Mall has struggled to attract tenants, with whole floors left vacant for the majority of its lifespan. (David Whitley 2019)
What Can be Done to Improve Benefits Realisation and Project Success?
Return on investment and understanding the costs of your available opportunities — of time and money — is the key to assessing the opportunity costs of your portfolio project choices. You’ll have a better chance of creating business value that’s higher than your opportunity costs, which means higher returns and fewer losses.
Cleaerly defining project success goals as the realisation of the intended benefits will help frame the desicion-making process and actions of stakeholders throughout the project lifecycle. Project sponsors and mangers must foster an environment that evalates the delivery of benefits over the short-term budget and timelines. The CARE appraoch is applied throughout the project lifecycle phases:
Communication across all levels
Assessing across all levels
Reviewing across all levels
Executing across all levels
PLAN THE PROJECT
1.Establish the Project Goal
2.Make a list of All Jobs
3.There must be One Leader
4.Resources – Assign People to Jobs
5. (a) Have a Safety Margin – Risk Management & Contingency
5. (b) Set the Stakeholders Expectations
EXECUTE THE PLAN
6.Use Appropriate Leadership Style
7.Know What’s Going On – Tracking the Project
8.Tell People What’s Going On – Reporting
9.Repeat Steps 1 to 8
10.Do A Post Mortem – Lessons Learnt
(Padraig Friel PM360 Consulting 2024)
Refercences
Article written by Padraig Friel MPM MBA IPMA-C® CMC® PM360 Consulting
www.pm360consulting.ie
www.imt-pm.com
www.additiv.com/insights
www.stuff.co.nz/travel – David Whitley
www.citi.co.uk /white-elephant-projects – D.Adams