Defining Complexity in the Context of Megaprojects

Megaprojects have been broadly described as “large‐scale, complex investments that typically cost a billion dollars and up, take many years to develop and build, involve multiple public and private stakeholders, are transformational, and impact millions of people” (Flyvbjerg 2014). Importantly, as noted by scholars in the field of project management, it is, not the cost but the complexity that marks out a megaproject (Pitsis et al. 2018).

The concept of complexity from the perspective of megaprojects has been described in three characteristics: (i) interrelatedness, (ii) nonlinearity, and (iii) emergence, in terms of both structural and social elements (Damayanti et al. 2021a). The complexity arises from the interdependency of thousands of moving parts associated with funding, managing, and governing complex social and organizational relations. Involvement ranges from committed stakeholders amongst the contractors and civic authorities to those that are resistant, embedded in existing communities, social movements, and advocacy organizations (Pitsis et al. 2018).

Contributing to complexity is the existence of significant numbers of different, ambiguous, and interconnected tasks and activities to complete the project which are often hard to define due to the uncertainty that lingers over complex projects throughout their long life. It is difficult to determine the behaviors of complex systems. You can look at the system now, and make a guess where it might be next, but saying what it will be doing over a longer time period, sometimes decades, is much more difficult.

The more complex the system, the more likely emergent events will disrupt the continuity. The more complex the project the more difficult it is to predict the chain of events that any emergent event will produce. Relatively small disturbances can provoke chain reactions that can cause substantial damage and even cause the system to collapse (Miller and Hobbs 2005). For example, some megaprojects are more complex than others. Specifically, complexity in water megaprojects is embodied in structural complexity and cognitive complexity, including complex engineering schemes, limited awareness of innovative technology and objectives, strong uncertainty from the external environment, and the participation of numerous stakeholders (Mai et al. 2018). Leadership and experience will come and go throughout the project life cycle leaving a void that may not be filled for some time.

Differences in economic, social, and cultural motives can lead to chaos and conflict. Evidence shows that new developments and changes in technology increase uncertainty (Shenhar 2001). In addition, since the technology used in megaprojects is often new, developmental, or cutting‐edge, its behavior and functionality are often hard to predict. In the case of an already complex product such as the F‐35 Joint Strike Fighter – a very sophisticated and technical fighter aircraft – the design phase (which took almost an entire decade) witnessed countless adjustments as the underlying technologies constantly evolved.

Megaprojects are often characterized as complex without defining the underlying causes of complexity and how it impacts a project’s outcome (van Marrewijk et al. 2008). Moreover, complexity remains ambiguous and ill‐defined in much of the project management literature (Geraldi 2008) and there has been insufficient attention paid to early studies of systems analysis, contingency theory, and complex projects (Brady and Davies 2014).

As a comparison, we also need to look at complexity from the perspective of developing countries. Research has confirmed that it is more difficult to manage complexity in developing countries, as these nations often lack economic, political, and social stability, have unique cultural backgrounds, unstable regulatory systems and rule of law, low skilled labor and an absence of managerial skills requiring temporary leadership imported from a foreign culture (Damayanti et al. 2021b). Significantly, megaprojects are run on budgets ranging between 0.01 and 0.02% of a country’s gross domestic product (GDP). Differences in economic motives, cultural perspectives, and political affiliations of stake holders are also a source of complexity.

Megaprojects have also been defined in terms of structural and dynamic complexity (Brady and Davies 2014; Maylor et al. 2008), and some scholars add to this framework one additional type, socio‐political complexity (Sheard and Mostashari 2010). Project management science has borrowed greatly from systems theory to analyze and describe the functioning of projects, and it has long been accepted by the community that projects operate as complex systems (Baccarini 1996; Williams 2002). Structural complexity is characterized by the interdependence and diversity of components and results from organizational and environmental aspects (Chapman 2016). Dynamic complexity in projects highlights the question of changes and evolutions over time and focuses on the dynamic relations between the internal components of the project and between the project components and the environmental components (Geraldi 2008). Socio‐political complexity has been defined as multiple stakeholders, views, human interactions, and dynamic governance.

Characterizing complexity is not easy, nor can it be easily contained or mitigated. In Table 4.1, five types of complexity commonly found in megaprojects are described: (i) structural, (ii) dynamic, (iii) technological, (iv) governance, and (v) socio‐political. Each of these types of complexity have been analyzed in the literature with sometimes different meanings and characteristics.

Characteristics of Complex Projects

Megaprojects are challenging to manage and difficult to predict or foresee, possible outcomes due to the competing elements of:

• Complexity – Interdependent units, [systems], processes, and actors
• Uncertainty – Information inadequacy when too many variables interact – unknowable, unmeasurable, and uncontrollable
• Ambiguity – More than one interpretation – increases uncertainty and creates conflicts
• Conflict – Competing interests and cultural divides – increases uncertainty and impacts trust

How are Complexity, Uncertainty, and Risk Alike or Different?

Though risk is often grouped with complexity and uncertainty they have very distinct meanings. With risk, you can predict the probability of a future outcome as a risk is knowable, measurable, and controllable. Whereas complexity and uncertainty create environments where the interaction of many variables can lead to unpredictable results. Yes, we cannot stop or prevent a hurricane from occurring, but we can control the impact of hurricanes through emergency planning, food, and water supplies, accelerated escape plans, safe shelter, storm barriers, cyber security precautions, and alternative communication sources. With uncertainty we are not able to identify the risks because they are unknowable so, therefore, we cannot mitigate or prevent the risk (Table 4.2).

Miller and Lessard (2007) define risk as the possibility that events will turn out differently than anticipated. While risk can be described in statistical terms, uncertainty represents situations which are not fully understood in terms of causal forces and potential outcomes. So, odds are known for risks but not for uncertainty. Megaprojects involve both high risk and uncertainty; yet some refer to all such cases as risk (Kardes et al. 2013).

Uncertainty

Uncertainty like complexity creates management challenges for megaprojects that go beyond the traditional project management concerns of cost, scope, and schedule though they are likely to have an impact on all three. Uncertainty may mean that there is insufficient information to even decide which alternative may be viable and whether proceeding with a particular alternative makes sense without the evidence needed to evaluate such a major decision.

Though uncertainty is a distinct concept from complexity, one can feed off the other as uncertainty can create complexity and complex projects often have a lot that is unknown at least initially. This relationship between complexity and uncertainty was demonstrated in the Crossrail Project in London:

It is important to note that at an early stage, any cost estimate can only be an approximation based on the information that is known at the time. Given the complexity of Crossrail there were aspects in which the areas of uncertainty exceeded the elements that could be determined and measured. The areas of uncertainty were evaluated in a risk model to produce a probability‐based forecast of overall cost.

(Buck 2017)

Lenfle and Loch (2017) found that the first of the three major causes of megaproject failure is: “Underestimation of or refusal to acknowledge uncertainty.” Projects suffer from unforeseen uncertainty that cannot be identified during planning. Because they have information gaps, they cannot create the necessary contingencies. Uncertainty can arise from large events or from the interaction among stakeholders through complexity. Uncertainty requires more flexible and emergent approaches to managing megaprojects.

Experience has found that uncertainty that is unforeseen can be diagnosed through discovery‐driven planning or by systemically probing for knowledge gaps (Lenfle and Loch 2017; McGrath and McMillan 2000).

Uncertainty refers to the possibility of emergent indeterminate events. Under conditions of low uncertainty, approximate forecasts still can be made. High uncertainty entails conditions of indeterminacy where future events are neither identifiable nor amenable to calculation.

How should one cope with complexity and uncertainty in mega infrastructure projects? Several solutions have been offered by scholars in the project management field: (i) The development of an institutional environment with more formal process and procedure to address the challenges brought on by complexity; (ii) the shaping of a learning environment in order to deal with uncertainty and emergent properties; and (iii) balancing the generation and the reduction of a variety of policy options in order to select a limited number of feasible options and to bridge the strategic exploration and the operational processes of decision making (Salet 2021).

Thus, an increase in complexity often means that it is more difficult to comprehend the effect of influencing one element; hence there is increased uncertainty. Put differently, uncertainty refers to the components, relationships, and interactions we do not fully comprehend or of which we may not even be aware. Complexity and uncertainty are thus strongly related (Salet 2021).

The Sources and Impact of Megaproject Complexity

As shown in Figure 4.2 megaprojects have characteristics such as uncertainty, interdependence on process and people, unpredictability, volatility, and emergent events that lead to effects on the project that may not be controllable. Projects have become more complex because of the increasing factors that are considered sources of complexity. Complexity comes from:

• The need for technological innovation,
• Large numbers of project participants from multiple employers, representing distinct cultures and companies, and
• a volatile environment subject to rapid change

All three of these factors affect project outcome. This complex environment influences all aspects of a megaproject’s long‐life cycle from project selection to project planning, coordination, and control; it can also affect the selection of an appropriate project governance structure and the strategic alignment of the megaproject’s goals with the vision and goals of the sponsoring organizations. A different strategy is required for complex projects. Complexity also impacts decision making, the ability to build resilience, trust, and to stabilize a project with much uncertainty, ambiguity, and conflict.

The origins of complexity theory applied to project management leads to early research by Baccarini (1996), Gidado (1993), and Morris (2002). The importance of complexity to the project management process is widely acknowledged and can have influence on many aspects of project selection, planning and development, and control. Importantly, complexity can have an impact on governance, and governance can make a project more complex. As recognized by Miller and Hobbs (2005) in their study of large capital projects, there is a sharp contrast between the binary, hierarchical, and static nature of corporate principal‐agent governance relations, and the time dependent co‐determination found in the network relations typical of the governance of megaprojects. The governance regimes must adapt to the specific project and context, deal with emergent complexity, and change as the project development process unfolds (p. 42, 48).

As described by San Cristóbal et al. (2019) complexity can affect the selection of an appropriate project organization form and experience requirements of management personnel; and it can affect different project outcomes (time, cost, quality, safety, and risk). As projects have become more complex, there has been an increasing concern about the concept of project complexity and the application of traditional tools and techniques developed for simple projects that have been found to be inappropriate for complex projects. Identifying and characterizing distinct aspects of project complexity to understand more efficiently the stakes of project management complexity can be of great support in assisting the global project management community (San Cristóbal et al. 2019).

1. Managing Complexity through Systems Integration

Surely, we are being presented with one of the greatest triumphs of science and engineering, destined deeply to influence the future of the world.

— Niels Bohr

As described by Niels Bohr, recipient of the Noble Prize in Physics in 1922, the Manhattan Project was a research and engineering project to harness the energy of the atom. Named for its first sites in New York City, it had profound and far‐reaching consequences. It accelerated changes in science and set off a continuum of reactions outside the laboratory that have been felt in international power politics, agriculture, protest movements, medicine, the presidency, photography, ecology, warfare, economics, popular culture, research ethics, attitude toward science, government, and the future. It impacted aspects of our world and lives both foreseeable and unanticipated. The Manhattan project provides an excellent example of managing complexity through trial and error and exploring parallel options until sufficient information becomes available (Lenfle 2011). The Manhattan project had no parallels in history.

In large engineering projects, systems integration first emerged in the 1950s and the 1960s to deal with the design and integration of weapons systems projects such as Atlas, Titan, and Polaris Ballistic Missiles (Hughes 1998). In the Polaris case the problem was to coordinate and integrate multiple branches of government and the dozens of firms involved (Sapolsky 2003). Systems engineering (SE) has been defined as “the science of designing complex systems in their totality to ensure that the component subsystems making up the system are designed, fitted together, checked and operated in the most efficient way” (Jenkins 1996). Since Jenkins first set forth his definition of SE, systems engineers seem to have been busy creating more complex models and processes. This observation can be mapped into the holistic approach to problem solving where the undesirable situation is the failure of systems engineering to manage the complexity of the systems development environment (Kasser and Zhao 2014). Nevertheless, systems engineering has been a major tool used for solving complex projects for decades and is essential to build airports, tunnels, roadways, bridges, defense systems, and much more. Systems engineering is the art and science of developing an operable system capable of meeting requirements within often opposed constraints to produce a coherent whole that is not dominated by the perspective of a single discipline (Rebentisch et al. 2017).

2. Parallel Approaches to Project Complexity

Addressing complex and uncertain projects particularly megaprojects require exploration and learning throughout the long life of the project. No one approach will offer an ideal solution. Recent work demonstrates that, when confronted with unforeseeable uncertainties, managers can adopt either a learning, trial‐and‐error‐based strategy, or a parallel approach. As an example, studying the case of the Manhattan Project, demonstrates that managers must not necessarily choose between solutions, but can also combine them or add new ones during the project life. (Lenfle 2011). Megaprojects often raise situations of uncertainty for which the project cannot plan or prepare. One way of confronting unforeseeable uncertainties consists of trying different approaches in parallel to find out which one works best (Lenfle 2011).

3. Uncovering the Unknown Unknowns

Unknown unknowns is a common term in strategic planning and project management. A major challenge in project management is dealing with the uncertainties within and surrounding a project that give rise to outcomes that are unknown. The project management literature provides little insight and frameworks to deal with these unexpected events that can cause serious damage or catastrophic loss.

Ramasesh and Browning (2014) in their analysis of unknowns‐unknowns referred to in the literature as (unk‐unks), created a conceptual framework for tackling knowable unknown unknowns in project management. They broke unknown unknowns into two categories:

1. Unknowable unk unks: These are unexpected surprises that cannot be anticipated. No amount of action by a project manager will be able to convert unknowable unk unks to known unknowns. For example, COVID‐19, the tsunami in the Indian Ocean in 2004, that disrupted many projects or Hurricane Katrina that caused over 1800 fatalities and $125B in damage in late August 2005 could not have been predicted. Not even the world’s greatest underwriters at Lloyds of London and Munich Re saw them coming at least not to the extent of the impact.
2. Knowable unk unks: These unk unks could be foreseen by the project manager but for some reason (e.g. barriers to cognition) are not (yet) seen. Many studies of project failures suggest that a large amount of unk unks could have been anticipated given due diligence by the project manager.

Ramasesh and Browning (2014) fill a gap in the project management literature by presenting a framework for recognizing and reducing specific areas in a project likely to contain these unknown unknowns. This framework conceptualizes six main factors – relating to both project design and behavioral issues that can increase the likelihood of unk unks in a project. These are: (i) complexity, (ii) complicatedness, (iii) dynamism, (iv) equivocality, (v) mindlessness, and (vi) project pathologies. From this analysis they develop eight propositions, each of which covers five important subsystems (product, process, organization, tools, and goals) through which unknown unknowns can emerge in a project. They propose five concepts for increasing awareness of these situations: (i) develop system thinking; (ii) build experiential expertise; (iii) become a high‐reliability organization (HRO) and embrace preoccupation with failure and learn from surprising outcomes. Because megaprojects are surrounded with complexity developing tools to manage the complexity and uncertainty is a strategic necessity.

4. Using the Front End of Projects to Reduce Complexity

Recognition in the Early Conception Phase that Complex Projects will cost more and take longer than originally budgeted due to all the missing parts being essential to ensure success during implementation. Essentially, due to complexity, decisions are often made before the project is ready and during a time when there is generally still much uncertainty. The literature is clear that megaprojects are often over budget and behind schedule because the budget was produced early in the up‐front planning phases when there was still much uncertainty in the project and the data was not available to assess a realistic outcome. Since megaprojects have long durations, 10–20 years is not unusual, by the time the project is shovel‐ready inflation and unknowns may have caused the project to double in price.

Scholars have determined that the front‐end of the project has the highest potential for reducing uncertainty and complexity by shrinking the number of alternatives, but often the focus is on deriving detailed information (Samset and Volden 2016). A common notion for reducing uncertainty at the front‐end is defining clear goals and objectives for projects (Samset and Volden 2016). However, Giezen et al. (2015) mention that, to some extent, ambiguity in goals and objectives opens space for applying different views to decisions according to future changes.

Following a systematic literature review (SLR), Babaei et al. (2021) found five essential characteristics emerged from analyzing front‐end definitions: (i) Exploratory nature, (ii) Generating managerial information, (iii) Shaping a feasible concept, (iv) Terminating with a decision, and (v) Uncertainty. Through their research, they then investigated the remedies for managing the issues at the front‐end of infrastructure projects and derived six remedies for managing the front‐end issues, namely: (i) Using more qualitative data and less detailed quantitative analysis for decision‐making, (ii) Involving external stakeholders’ views in decision‐making, (iii) Generating reliable estimations and controlling the quality of the results, (iv) Applying lessons learned, (v) Increasing the skills and competencies of the front‐end actors, and (vi) Promoting transparency and accountability and defining clear roles and responsibilities in project governance.

5. Organizational and Social Complexity

Complexity requires more elaborate forms of organization and formal processes and governance structures. Megaprojects should focus not just on intraorganizational structure but more importantly on interorganizational relationships and trust building among the multiple organizations involved in planning, designing, engineering, and constructing the project. Megaprojects are known for their vast size, political challenges, high costs, long duration, technical and procedural complexity, and millions of diverse and changing stakeholders. Coordination and understanding between the actors of these mega projects is essential to their success. However, this is particularly difficult to achieve in this context, as these stakeholders are extremely diverse and generally have few opportunities to work together. To achieve this cohesion, a major, yet often invisible, element is trust. The delivery of a megaproject requires bringing together multiple interdependent organizations that must collaborate and cooperate to achieve successful outcomes (Winch 2014). This distinction is important when seeking to understand the uncertainty associated with complex projects (Chapman 2016).

Organizational complexity arises from the participation of key project delivery partners coming from different national frameworks who must find a way to resolve their differences so they can work effectively together to resolve multiple challenging technical, contractual, and political issues (Levitt and Scott 2017). Empirical research has shown that firms can build trust and develop a shared project identity by defining early on the conceptual design of the project collectively using teams made up of representatives from the client and multiple delivery organizations (p. 113).

6. Focus on Decision Making at the Strategic and Operational Level

Because of the very long‐time span of the process of a mega infrastructure project, changes in social and political conditions are inevitable (Altshuler and Luberoff 2003). One of the most frequent findings in empirical studies on decision making in mega infrastructure projects is that decision‐making processes are organized in a manner that is far too reduced to enable adequate decision making on complex issues (Priemus et al. 2008). Highly complex mega infrastructure projects are frequently treated as simple processes of decision making, risking not only the occurrence of errors but also the neglect of the strategic potential of alternative options and the potential offered by recombination and enrichment with other trajectories of policymaking (Priemus et al. 2008).

Acceptance of complexity and uncertainty would require preserving flexibility in the decision‐making and implementation process – in other words, the possibility to take decisions and implement actions later when more is known about the relevant project conditions. In the case of LGV Méditerranée, this would have meant postponing final decisions regarding the route as far as possible so that better alternatives could emerge from debate.

Within such a long timeframe it is not unusual to have recurring rounds of decision making, each involving different actors. During building the Big Dig from conception to substantial completion there were eight Governors which meant that the administration and the federal and state government infrastructure was constantly changing (Greiman 2013). If there is a lot of consensuses across government as to the purpose and goals of the megaproject change will be expected, if there is resistance and opposition change may not be possible.

7. Community Consultation and Participation

Involvement of powerful Indigenous and interest groups and individuals is not only essential in complex projects with multiple options, but it is sometimes required particularly in highly regulated industries such as nuclear power and other energy projects that have environmental and health impacts and complex procedures and technology. Continuous scrutiny and oversight of the project to manage emergent events is critical in complex projects.

Experience has found that unforeseeable uncertainty can be diagnosed through discovery‐driven planning or by systemically probing for knowledge gaps (Lenfle and Loch 2017; Loch et al. 2006; McGrath and McMillan 2000). Bottom‐up approaches to decision making can also help in managing complex projects in volatile environments.

For example, The Kecamatan Development Project (KDP) in Indonesia highlighted in Table 4.3, focused on a model of participatory development projects designed on social rather than economic theory (Adler et al. 2009). As the world’s fourth largest country, Indonesia was recovering from widespread corruption and social unrest in the mid‐1990s, the Asian financial crisis, and the 2004 Tsunami. The goal was to deliver development resources to rural communities “using local representative community forums … wherein villagers, not government officials or external experts, determine the form and location of small‐scale development projects via a competitive bidding process” (p. 11). The major mission of KDP was to provide “a more efficient and effective mechanism of getting valued development resources to a designated target group (in this case, the rural poor)” (p. 12). Using the local villagers most familiar with the environmental needs of the local population, and the political and economic landscape, was a strategy which made sense from economic and cultural perspectives (p. 12). A major study suggests that such processes have been effective in this regard with respect to enhancing the capacity of KDP participants, specifically participants in other development projects, to constructively manage everyday disputes (Barron et al. 2007). The key challenge is the changing of the mindset of both government and World Bank officials from a focus on the necessities of agency supply to one in which projects respond to community demand (Guggenheim 2006). Projects that have explicit and accessible procedures for managing disputes arising from the development process are less likely to cause conflict (Barron et al. 2007, pp. 21–22). Developing a framework for dispute resolution from the outset of the project is critical to community involvement and acceptance (Greiman 2011).

8. Managing Change, Conflicts, and Resistance

One of the key factors in complex megaprojects is recognizing that change is inevitable and that when and how that change will occur is often unpredictable. For instance, what was originally thought of as a transportation project may become an urban‐development or a landscape‐preservation project too, as was the case with the HSL South (Salat et al. 2013). Or an interstate highway project may develop into a transportation and environmental improvement project within an inner city as reflected in the Big Dig (Greiman and Sclar 2019).

A megaproject can take many twists and turns throughout its long life before settling on an option. Researchers have expressed concern that conflicting preferences in project selection may be avoided and screened off from the “relevant options” of decision making, rather than using conflicts to improve deliberation about alternatives (Salet et al. 2013). It is not easy to deal with conflicts; they may be irreconcilable, but they also can lead to better decisions in challenging and turbulent situations.

In the face of complexity, strategic decision making should focus on the organizational mission and alignment of the project with that mission with the goal of developing multiple options that can be explored by those who will benefit most from a rationale decision‐making process.

Discussion Questions

1. Why is it important that complexity, uncertainty, and risk be managed with different strategies?
2. What are the key considerations in the reduction of complexity?
3. Why is getting to the simple so difficult and why do Weick and Sutcliffe recognize that it is not always the best solution?
4. Why is preoccupation with failure an important attribute for High Reliability Organizations?
5. Provide an example of a project from real life that chose the wrong strategy culminating in project failure. Explain what went wrong in the project selection process.
6. Why is strategic alignment important in project selection?
7. Explain the statement by (Miller and Hobbs 2005), “The longer the development time, the higher is the likelihood that projects will be affected by turbulence.”
8. Why is community involvement so important at the early stages of the project?
9. How can participatory governance be encouraged?
10. Why do scholars suggest that megaprojects should be anchored into its institutional environment?