PROJECT MANAGEMENT CASE STUDIES

Poor Risk Management - Sydney Opera House

The Sydney Opera House is one of the best-known iconic buildings, recognized around the world
as a global symbol of Australia. The Danish architect Jørn Utzon won the architecture competition
set out by the New South Wales government for the new building in 1957, and the construction
started in 1959. The project was originally scheduled for 4 years, with a budget of AUS $7
million. It ended up taking 14 years to be completed and cost AUS $102 million.

The Sydney Opera House could probably be seen as one of the most disastrous construction
projects in history not only from the financial point of view but also for the whole management
plan.

Lessons Learned -

a) There was no plan, only an aspiration. When construction started there was no clear concept
of how the roof might be constructed. It’s not that the estimates were wrong, it’s that there was
nothing to base the estimates on in the first place.

b) The Sydney Opera House project had no project manager, and it was assumed that Utzon would
take the initiative for all decisions regarding design, construction, or development. There were no
project evaluation measures or officially in place, and for that reason, goalposts and
implementation methods kept on changing. Some sections of the opera house were even built
then later demolished, re-designed and built again.

But later this architecture considered as Successful boondoggles - the cost of construction of
the Sydney Opera House ballooned over 1,400 percent, but the building has since become an icon
for the city and for Australia.

Bank of America Changes Its Mind

If you think a little research into what could go wrong on a project is a waste of time, just look at
Bank of America (BofA). When this big bank decided it would begin to charge customers $5 per
month in 2012 just to gain access to their funds via their debit cards, the opposition was far greater
than they ever imagined.

Sure, this financial conglomerate may have thought it would easily overcome some initial angry
customers and that most wouldn’t take the time to change banks—who has the time, who wants
the hassle so to speak? This proved to be a horrible mistake on the part of BofA.

BofA couldn’t deny two major dates in November of 2011—Dump Your Bank Day and Bank
Transfer Day, both started by ordinary citizens protesting the debit card charge.
Back in October of 2011, after BofA announced the new fee, a poll by TheStreet showed a
whopping 83 percent of BofA customers said they would indeed take the time out of their busy
schedules and dump BofA.

Opposition from customers was widely from Bank Transfer Day (November 5, 2011) started by
Kristen Christian, who created the “Day" via a Facebook venue. Dump Your Bank Day
(November 8, 2011) followed thereafter from Occupy Wall Street protesters.

Credit unions shouted with glee as thousands of folks did indeed “dump" BofA, even though the
conglomerate tried to sway this from happening by announcing on November 1, 2011 they had
rethought the plan and would not be charging its customers the $5 debit card fee. A little too late,
BofA!

In a time when every American looks at each and every dollar and how these dollars are being
spent, this was a poor idea by BofA. Five dollars to be allowed to use your own money angered
too many and the announcement to drop the charge coming too late, did cause people to bail on
BofA.

What if BofA would have considered what the average customer would do? Would they have
seen the negativity and dumped the idea? Or, would they have surged ahead with the idea? BofA
won’t say, but it does seem a little risk management planning here would have saved BofA some
real bad press and a lot of customer loss.

Risky Business

Risk management is something all project leaders, teams and stakeholders need to delve into
during project initiation. As seen with these three examples, when risk management is not used,
things don’t turn out well and often fail with companies and governments losing face.

Don’t let this happen to your projects. Instead, review the Bright Hub series on implementing a
good plan with examples and templates to aid you. There is a reason for good risk planning and
it’s evident these projects and BofA could have benefited by exploring their options (and risks)
ahead of time.