The country needs to start building megaprojects. This may sound strange in this time of current Covid-19 when the general mood seems to be one of economic stasis, but the country should be building megaproject all of the time – and particularly now.
Megaprojects activate a broad band of economic activity. On the surface of any project many of the activities are evident. If you are building a large dam then people will need to pour concrete, and steel will be required.
But in fact dozens of other activities are also triggered which are not immediately evident. For a major project one needs land surveyors, quantity surveyors, architects, and the list goes on. As the project advances there are yet more, like project planners, accountants, and so on. There are also all the trade crafts such as welders, machinists, boilermakers. These all lead to the purchase of items like welding rods, cutting blades, and so on. Business flows outwards.
Starting a megaproject is like dropping a brick into a pond. The splash is followed by ripples which radiate outwards. As they travel they reflect off stones and reeds. The reflected waves interact to produce other waves, which in turn reflect and interact. The patterns become extremely complex.
This ripple pattern represents the job activities activated in a megaproject, which in turn all represent increased economic activity. The workforce on site has to eat lunch. They buy lunch from local tradesmen; companies may place food orders with local suppliers, so economic benefits flow.
The same is true for transport, accommodation and a variety of other functions which come about as the ripples interact and reflect. A megaproject causes a mood of confidence and optimism to spread. It then induces confidence and optimism in related projects, which in turn pick up on the mood. It spreads.
Those who have experience of all this know that there is much more to the megaproject affect than only the interacting ripples of economic activity.
There is future thought and spiritual commitment. For example, there are companies which may have been contemplating introducing a new pipe-fabrication technique with associated plant extension, but the low volume of business has not warranted it. But if they see five years’ worth of demand coming from a megaproject, then that could be the impetus which provides the future vision and spiritual commitment to implement the proposed advance.
In due course, after implementing the new system, they find that they can sell their improved pipes to other sectors of the economy as well. Companies introduce new training courses; open new branches; and so yet another set of interacting ripples is propagated.
Continuing the theme of future thought and spiritual commitment: it is this which is the initiator of a megaproject. I have been in many planning sessions in which I have watched the people who demand exact certainty. There are accountants who want to see the bottom line, ideally accurate to a few cents.
That is just not possible for large megaprojects. For large projects one has to rely much more on the vision and courage of leaders. To conceive of a megaproject requires a vision of what it will achieve, not only on its own but also for a wider segment of society. No megaproject is an island; it is always part of a much larger whole. The larger the vision effect, the more scared the participants become, generally speaking. At that point many people back away, not wanting to be in the fallout region if something goes wrong.
Strong visionary leaders take the decisions on the basis of very good information, supplied by many study teams. But there is no dead accurate bottom line. This is because there will be many teams involved. In fact, teams of teams, each with multiple team leaders at different levels. Each of these has to work optimally to deliver their respective bottom line.
At business schools they teach the decision-level words: What, How, When. The highest level visionary leaders decide 'What' to do. They pass that to the next level who decide 'How' to execute the major tasks. Then the lower levels of management are instructed to figure out the 'When' part. That is the part where teams work hands-on to actually get the day-to-day jobs done such that they all mesh together.
South Africans are actually very good at megaprojects. There is adequate historic evidence. We need to find the courage and vision to initiate some new ones now, like power stations, oil refineries, ship building, bridges and rail connections. The country needs the “shot in the arm”, so to speak.
Dr Kelvin Kemm is a nuclear physicist and is chief executive of Stratek Business Strategy Consultants, a project management company based in Pretoria. He carries out business strategy development and project planning in a wide variety of fields for diverse clients. [email protected]
* The views expressed here are not necessarily those of IOL or of title sites
BUSINESS REPORT