The tendency of projects to keep increasing in size and complexity—"scope creep"—is a threat whenever a bias toward optimism leads people to think that adding a bit more won't be too difficult or expensive. But in the public sector, with its large number of stakeholders pushing different agendas, the threat becomes truly serious.
A road-improvement or utility-upgrade program, for example, may involve a national transportation or energy ministry, a provincial or state-level agency, local and municipal authorities, specialized utility or land-use bodies, and an entire address book of other entities involved in the planning process. Each of those stakeholders will have an influence on project scope and funding decisions, and that can lead to lengthy planning processes and a tendency for project scope to grow over time.
Poor scope discipline can be exacerbated during the engineering phase. Without a clear understanding of the underlying business case for the project, engineering teams will attempt to find the best technical solution that addresses all the requirements identified by stakeholders. Nice-to-haves get mixed up with "must-haves", and cost, complexity, and delivery time continue to rise.
At one large U.S. public-sector agency, poor scope discipline wasn't just adding extra cost. Some important projects were spending so long in planning, and becoming so expensive, that they were eventually deprioritized or abandoned. By aiming to address all the needs of stakeholders, the process ultimately addressed none of them.
Getting scope right
To address this challenge, the agency set about redesigning its project-delivery process from scratch. Its aim was a new way of working, one which kept the fundamental business case for every project in focus at all times, while also allowing stakeholders to have effective, fact-based conversations about the costs and benefits of different options and changes in scope.
To run the new process, the agency gave project managers a playbook—a collection of tools to improve project-scope management and quantify the costs and benefits of scope changes. Large projects would be divided into smaller chunks, for example, so the most urgent needs could be addressed first. Planners could then evaluate a range of options for each segment, including low-capex options or postponement of activity altogether if the need wasn't clear.
Crucially, the playbook addressed human factors as well as technical ones, providing guidance on how to plan and manage meetings with stakeholders, for example. Agency personnel were given training on the new methods, along with coaching and support as they applied them to real projects for the first time. As a result, the culture among managers changed from focusing on "solving an engineering problem" to "solving a transportation problem" (exhibit).
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McKinsey_Website_Accessibility@mckinsey.com Keeping stakeholders aligned
One key objective of the new project-delivery process was improved stakeholder management. The aim was to get all stakeholders involved early, and ensure they all understood the end-user need, the range of options available to fulfil that need, and the costs and benefits of each option.
In the early stages of five new projects, for example, the agency led workshops whose 20+ participants included mayors, county personnel, and state and national officials. Together, they clarified the objectives of all five projects; in doing so, they identified engineering and other savings of $32 million. One relatively small project, for example, had been cancelled twice before, but the participants agreed to prioritize work at a few critical chokepoints. Focusing construction improvements on breaking through those bottlenecks cut costs by $10 million, and design and construction time by 30 percent—while achieving the same benefits.
From plan to delivery
With scope agreed, the playbook approach also brought new efficiency and rigor to subsequent planning and procurement activities—ensuring that project requirements were addressed in full and that parallel activities, like right-of-way purchases or utility relocation, were properly coordinated.
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Applying its new delivery approach in several pilot efforts has saved the agency between 15 to 20 percent in total project costs, through a combination of shorter development and construction schedules, scope control, and improved engineering. More important for the future, the playbook has given project managers new skills and tools that they can apply in subsequent projects, both new and ongoing
About the authors: Steffen Fuchs is a partner in McKinsey’s Dallas office and Rafat Shehadeh is an associate partner in the Washington, D.C. office.