Podcast Summary: 3 Takeaways with Lynn Thoman

Episode: Why 199 of 200 Projects Fail: The Iron Law That Dooms Even the Smartest Ideas (#268)
Guest: Bent Flyvbjerg
Date: September 23, 2025

Episode Overview

In this episode, Lynn Thoman explores why the overwhelming majority of ambitious projects—be it home renovations, space exploration, or infrastructure megaprojects—fail to deliver as promised. Joined by Bent Flyvbjerg, a renowned expert in project management and co-author of How Big Things Get Done, the discussion unveils persistent pitfalls that doom projects and shares actionable strategies for increasing project success. The episode concludes with three practical takeaways for anyone aiming to get projects right.

Key Discussion Points & Insights

1. The Iron Law of Megaprojects

• Definition: Projects consistently go over budget, over schedule, and under-deliver on promised benefits.

• Statistics:

  • Only 8.5% of projects are delivered both on budget and on time.
  • Just 0.5% (1 in 200) deliver on budget, on schedule, and on benefits.
    • “That's 1 in 200 projects.” — Bent Flyvbjerg [02:36]

• Classic Failures:

  • California Rail Project: Billions over budget, years late, now only connects minor cities. [02:49]
  • US Nuclear Reactors: Billions squandered, projects abandoned mid-way or finished with huge overruns. [03:10]
  • Sydney Opera House:
    • 1,400% cost overrun
    • 10 years late
    • “Those are not even the worst things about the project, even though they are really terrible.” — Bent Flyvbjerg [03:40]

2. Data on Failure & Project Risk

• Based on a private database of over 16,000 projects, average cost overrun is 30–35% (after adjusting for inflation and finalized business cases).
• Many projects have much higher cost overruns. [04:19]

3. Red Flags in Failing Projects

• Lack of Realistic Risk Assessment: Most teams ignore or misjudge the probability of overruns and unexpected delays.
  • Analogy: Not knowing the odds in poker means you’ll lose. [05:22]
• Lack of Competent People: Inexperienced teams are easy to spot and often a bad sign. [05:54]

4. Skin in the Game: Incentives & Accountability

• Problem: Often, those who manage or initiate large public projects are not meaningfully affected by overruns (“no skin in the game”). [06:21]
• Montreal Olympics Case:
  • Worst historical Olympic cost overrun
  • Taxpayers saddled with debt for 30 years
  • “It’s just unimaginable that they were paying it off for 30 years.” — Lynn Thoman [07:38]

5. The 'Uniqueness Trap'

• Most project managers claim their project is unique—this is a well-documented uniqueness bias.
• Research Findings:
  • The more unique a manager believes their project to be, the worse their performance.
  • “So uniqueness and performance are inversely related ... the more unique you think your project is, the worse you perform.” — Bent Flyvbjerg [08:55]
• Dangerous Mindset: Refusing to learn from similar projects increases risk and failure.
• “If you hear somebody saying about a project they work on that the project is unique, either get rid of them or retrain them ... these people are dangerous to have on your project.” — Bent Flyvbjerg [10:24]

6. Think Slow, Act Fast

• Inspired by Daniel Kahneman’s research: Fast decisions result in bad outcomes; slow, deliberate thinking yields success.
• Pixar Example:
  • Spends two years planning and simulating films before shooting.
  • Extensive inexpensive experimentation preempts expensive mistakes.
    • “Once they think they have that, that’s when they start shooting ... and be fairly frugal.” — Bent Flyvbjerg [11:57]
• Empire State Building:
  • Finished ahead of schedule, under budget, high quality—achieved by careful planning and modular, standardized construction. [12:35]
• Guggenheim Bilbao vs. Sydney Opera House:
  • Bilbao: 3% under budget, on schedule—used full-scale computer simulation (think slow, act fast approach).
  • Sydney: 1,400% over budget, 10 years late—began construction before designs were complete, mistakes materialized in concrete. [13:33]

7. Recommendations for Project Success

• Preparation is Key:
  • Realistic business plans (accurate budgeting, scheduling).
  • Hire competent teams with proven track records.
  • Establish strong incentive structures: reward success, penalize failure. [15:10]
• The Growing Importance of Project Management:
  • Society and business increasingly operate through projects—excellence in project management is now mission-critical. [15:58]

Notable Quotes & Memorable Moments

• “If it's not their own money, they don't take it as seriously. It's called skin in the game.”
  — Bent Flyvbjerg [06:33]

• “The more unique you think your project is, the worse you perform. And that's why we call it a trap.”
  — Bent Flyvbjerg [09:18]

• “You can only get to X fast if you have first thought slow, because you will not know what you're doing unless you've thought it through.”
  — Bent Flyvbjerg [10:51]

• “We didn't build a skyscraper with 123 stories. We just built the same story 103 times.”
  — Bent Flyvbjerg on Empire State Building [12:53]

Timestamps for Key Segments

• [02:14] — Introduction of the Iron Law of Megaprojects
• [03:10] — Examples: Nuclear power, Sydney Opera House
• [04:19] — Data on average project cost overruns
• [05:22] — Risk assessment and signs of a doomed project
• [06:21] — Skin in the game and public project accountability
• [06:59] — Montreal Olympics as a cautionary tale
• [07:56] — The Uniqueness Trap and evidence from research
• [10:49] — “Think slow, act fast” and the Pixar example
• [12:35] — Empire State Building and modular construction
• [13:33] — Guggenheim Bilbao vs. Sydney Opera House
• [15:10] — Best practices for project preparation and execution
• [16:31] — The three takeaways

The Three Takeaways (from Bent Flyvbjerg) [16:38]

1. Build with Legos:
   Use modularity and build big things from small, manageable components.

2. Think from Right to Left:
   Begin with the end goal and ensure every step aligns with that destination—work backwards from success.

3. Know Your Odds:
   Base your decisions on rigorous reference to past projects; understand the probability of on-time, on-budget, on-benefit delivery by learning from empirical data.

This episode provides a deep dive into the persistent causes of project failure and offers clear, research-backed solutions for beating the odds—applicable to both everyday projects and the world's largest ventures.