Avoiding the Successful Failure - Case Study Example

Analysis report of Millennium Dome Project Prepared by: Executive Summary The aim of the report was to assess how Millennium Dome Project in London was planned and performed. The report established that the project was not adequately planned. The realisation was that the project did not adhere to timelines especially completion of construction that continued during the opening period; the extended cost in terms of grant that spiralled to 628 million pounds beyond the estimated 399 million pound; and it was equally found out that the project was not well managed in terms of adhering to specifications especially construction materials. For instance, the initial plan was to roof using PVC-coated polyester, but this was changed to polytetrafluoroethylene coated glass fibre (PTFE). The report equally established that in terms of performance, the outcome was not satisfactory. The targeted 12 million visitors were not attained as it was only able to attract 6.5 million visitors by December 2000 and this impacted on the income. Secondly, it was projected that sponsorship income would amount to 125.5 million pounds yet the realised target was74.1 pounds implying 41% shortfall. Thirdly, it was found out that out of the 18.9 projected ticket income, only 3.9 million was realised. Finally, the Dome was not able to find appropriate use that is sustainable after December 2000. The report recommends that expected income should be pegged on modest figures to avoid distortion of expected income in any project that is expected to derive income. Apart from this, marketing should be core; the whole process should be rationalised and not marred with political interferences that can greatly alter the cause, cost and publicity. Finally, the whole processes should be well argued out for sustainability reasons beyond the immediate effect so that investment pumped in can be realised. Table of Contents Executive Summary i Table of Contents ii 1.0 Introduction 1 2.0 Stakeholder Analysis 1 3.0 Description of how the Project was managed 2 4.0 Outcomes 3 5.0 Conclusion 4 6.0 Recommendations 4 Appendices 7 Appendix 1: Stakeholders Interest Analysis 7 Appendix 2: Pillars of Project Success 8 Appendix 3: Project Cost Behaviour 8 Appendix 4: the project budget approved by the Millennium Commission 9 Appendix 5: comparative movement of overall costs, income and grant for the millennium dome 10 Appendix 6: cashflow position showing monthly cash outflow for the operating year against income before grant 11 Appendix 7: sponsorship income, compared with the Company’s forecast, for the period from August 1998 up to the opening of the Dome 11 Appendix 8: ticket sales income, compared with the company’s forecast for the period from July 1999 up to the opening of the Dome 12 1.0 Introduction Located at the expansive 130 acres Greenwich Peninsula which was formerly gasworks field, the Millennium Dome Project was initiated as one of the landmark projects to usher 2000 millennium in London. Bourne (2007, p.3) observes that the building in a unique way emerges as architectural masterpiece in the world since it boasts of the largest single roof globally made of Teflon-coated glass fibre. Structurally, the dome has twelve 100 metres support steel masts that stand for 12 months of a year. Moreover, the dome spans 365 meters which is a representation of the number of days in a year. As such the dome offers a total enclosed space of 100, 000m2. The scope of the project was to deliver a built structure that would host a yearlong ‘millennium experience’ of theme park cum scientific exhibition. In this regard, the structure would host interactive exhibits, shows and other forms of entertainment so as to symbolise three themes which are ‘who we are’, ‘what we do’ and ‘where we live’. The underpinning rationale was that this would constitute a mega-event that would attract tourist to London in the millennium year as they celebrate achievements attained so far by humanity (Carling & Seely, 1998). Bourne (2007, p.31) indicates that with the extension of scope, size & funding in 1997 under the then British Prime Minister Tony Blair, the ultimate premise was to symbolise ‘triumph of confidence over cynicism’. As such, this report critically analyses how the project was planned and performed. In this regard, the report outlines four critical issues. First, it outlines, it outlines albeit brief the overview, scope and objectives of the project; secondly, the report conducts a stakeholder analysis; thirdly, the report asses how the project was managed; finally, the report examines the project outcomes and presents a reflection on lessons learnt. 2.0 Stakeholder Analysis Stakeholder can be conceptualised as interested parties or actors with vested interest in regard to a given programme or policy. They may include, but not limited to national, public, international, political, NGOs/ civil society, commercial/ private labour and consumers. Analysing stakeholders is integral in informing project owners and management on those whose interest should be put into consideration (Schmeer, 1999, p.3).The stakeholders in dome project can be categorised into two groups. The first are those who were engaged in the project before it was closed by the end of 31 December, 2000 and post 2000 stakeholders. One of the stakeholders in the project is the executive branch of government through the Ministry of Culture Media and Sports. This was the parent ministry with a mandate for policy issues under leadership of the Secretary of the State in the ministry by then and the Permanent Secretary as the accounting officer for the whole department and National Lottery Distribution Fund. The second is the Millennium Central Ltd which was to disburse the National Lottery Fund. The subsequent one is the New Millennium Experience Company Ltd. The main mandate was New Millennium Experience Company Ltd was to steer the project so as to ensure deliverable are done within specified time as per the outlined budget, time limits and expected quality. The third is the legislature through the House of Commons which provide oversight role to government projects (see appendix 1). The fourth stakeholder is the public since most of the funds used to develop the project were derived from National Lottery as it failed to garner private sector backing. Moreover, the Millennium Company was treated as non-departmental public body. This implies that public had a greater interest owing to the fact that public money was being utilised and they were treated as shareholders with every lottery bought. The next stakeholder is the prospective consumers such as local and international tourists who were expected to utilise the facility during the ‘millennium experience’. It is these consumers who would be used to generate the expected return on investment. In the post 2000, the change in stakeholder interest was only experienced with introduction of English Partnership after liquidation of New Millennium Experience Company Ltd in 2001. Since the New Millennium Company was treated as non-departmental public body, the final stakeholder that is integral to the whole process in the National Audit Office as it has mandate to check utilisation of finances, 3.0 Description of how the Project was managed Implementation and execution stage of a project is critical phase as it is the actualisation stage where project plan is executed. Bourne (2007, p.32) notes that while actualising the plan, it is cognisant that this is done to meet stakeholders expectations by adhering to timelines, quality and budget (see appendix 2). The core of this description of how the project was managed in terms of how it ran as per the plan will be limited to budgetary cost and timeline of the project and adherence to the specifications of deliverables (see appendix 3). The project was not well managed since it deviated from plan based on budget estimates. This is a critical concern since a project that is not able to adhere to budget provision is likely to run into stagnation if not well take care of. For instance, in the initial may 1997 budget, the net grant awarded after the expected payment of 50 million pounds to the Millenium Commission was 399 million pounds (see appendix 4). However, since the company did not manage to attract private players, the New Millennium Company become dependent on grant and thus, the cost rose to 628 million pounds in September 2000 thereby representing a 57% increase in cost or in absolute terms an increase of 229 million pounds (see appendix 5). This implies that whole processes were tainted by budgetary pressure. The second failure on how the project was managed is premised on the facts that overally it failed to meet the completion date. The rationale for stating the above is premised on the fact that while the dome was opened as scheduled on 1 January 2000, the completion of construction did not adhere to the timeline before the scheduled opening date. In the earlier plan the expectation was that the construction of the dome was to end by October 199 9 yet this continued up to the opening day. This implied that the management could have time to conduct tests of possible weakness areas. For instance, it is observed that construction of the ramps for the disabled individuals were not in place during the opening session in January 2000 (Source: Comptroller and Auditor General, 2000, p.20). The third outcome relates to change of construction materials in the course of the project. This shows inadequate effort in futuristic thinking on the appropriateness of materials and deliverables. For instance, in the initial plan, the proposed roofing material was PVC-coated polyester. However, on 22 August 1997, this was changed by the New Millenium Experience Company to polytetrafluoroethylene coated glass fibre (PTFE). This change elicited environmental concern even though it was mooted as most durable option as compared to the first proposition as it was expected to last more than 24 years (Carling & Seely, 1998, p.41-42). 4.0 Outcomes Parkes (2011, p.23) observes that the failure of the project can be as a result of the "perceptions of expectations not met, or promises not delivered, or the belief that the support resources (from sponsorship and lottery funding) could be applied elsewhere". The problem/ failure with millennium Dome project is inability to meet the promises as per the business plan. For instance, in 2000, the promise was that the visitors expected to visit the facility as 12 million individuals. However, it was only able to attract 6.5 during that year (Meek, 2007, p.246). This turned out to be “at the upper end of expectations” (Comptroller and Auditor General, 2000, p.16). This ensured shortfall in income. For instance, the cash flow statement up to September 2000 indicates that expenditure went way beyond commercial income (see appendix 6). For instance, by the end of December 1999, the amount of sponsorship income received every month was way below the forecast. Overall, it was estimated that by the end of 1999 the sponsorship income was to be 125.5 million pounds yet the realised target was74.1 pounds implying 41% shortfall (see appendix 7). During the same time, the ticket income realised was 3.9 million pounds yet the projected was 18.9 million pounds thus signifying 79% shortfall (see appendix 8). Finally, the inability to find appropriate buyer and use equally points to failure of outcome (Great Britain: Parliament: House of Commons Committee of Public Accounts, 2005, p. 29). 5.0 Conclusion The aim of the report was to conduct critical analysis of how Millennium Dome Project was planned and performed. The report realised that the project was not effectively managed as a result of the fact that it did not meet cost expectations, timelines in construction and change of material outlined earlier in deliverables. Equally the performance in terms of outcome is wanting owing to the fact that it failed to attract estimated visitors, estimated ticket income, estimated sponsorship and post use after the end of Millennium celebrations in December 2000. 6.0 Recommendations The first realisation was that the expected visitors was pegged on the higher end and thus distorted the projected income. The recommendation is that while pursuing next projects that are expected to generate revenue and create return on investment, the estimated source should be set at modest numbers to avoid failed expectations. The whole project was marred by negative publicity, political interference in 1997 leading to adjusted scope. Thus, future projects should be done professionally and adjustments done on rational basis so as to curtail runaway costs that were not budgeted for. The below par performance is an indication of poor marketing strategies. This is as result of the expectation that dome would sell itself. This was a wrong approach and thus, future projects should be pegged on effective marketing strategies that can attract numbers and sponsors. The Dome was unable to attract buyers and users after the end of the celebrations. Thus, planning stage should be rational and long term so as to avoid such negative experiences. References Bourne, L. (2007, January). Avoiding the successful failure. In PMI Global Congress, Asia Pacific, Hong Kong (pp. 29-31). Carling, P. & Seely, A. (1998). The Millennium Dome. House of Commons Business and Transport Section. Research Paper 98/32. Comptroller and Auditor General (2000). The Millennium Dome. National Audit Office. HC 936 Session 1999-2000: 9 November 2000. Great Britain: Parliament: House of Commons Committee of Public Accounts (2005). The Regeneration of the Millennium Dome and Associated Land: Second Report of Session 2005-06; Report, Together with Formal Minutes, Oral and Written Evidence. London: The Stationery Office. Grieve, D. (2004). Management of design, Retrieved 9 May, 2014 from: Meek, H., Meek, R., Palmer, R. & Parkinson, L. (2007). Managing Marketing Performance 2007 2008. Burlington: Butterworth-Heinemann. Parkes, P. (2011). NLP for Project Managers: Make Things Happen with Neurolinguistic Programming, Swindon: The Chartered Institute. Schmeer, K. (1999). Guidelines for conducting a stakeholder analysis. PHR, Abt Associates. Appendices Appendix 1: Stakeholders Interest Analysis Source: Comptroller and Auditor General, 2000, p.7 Appendix 2: Pillars of Project Success Source: Bourne, 2007, p.32 Appendix 3: Project Cost Behaviour Source: Grieve, 2004 Appendix 4: the project budget approved by the Millennium Commission Source: Comptroller and Auditor General, 2000, p.16 Appendix 5: comparative movement of overall costs, income and grant for the millennium dome Source: Comptroller and Auditor General, 2000, p.16 Appendix 6: cashflow position showing monthly cash outflow for the operating year against income before grant Source: Comptroller and Auditor General, 2000, p.22 Appendix 7: sponsorship income, compared with the Company’s forecast, for the period from August 1998 up to the opening of the Dome Source: Comptroller and Auditor General, 2000, p.22 Appendix 8: ticket sales income, compared with the company’s forecast for the period from July 1999 up to the opening of the Dome Source: Comptroller and Auditor General, 2000, p.22 Read More