As most readers of my blog already know, in summer 2011 I traveled to Panama to facilitate two courses in Project Closeout and Lessons Learned for the Panama Canal Construction Division. The Panama Canal Authority is engaged in a Canal Expansion Program which is scheduled to complete in August 2014 which happens to be the Centennial of the opening of the original Panama Canal in 1914. This Expansion Program will not only allow larger ships to navigate the Canal using a third set of locks but will make infrastructure improvements in water usage and environmental usage of land.
As far back as 1850, many countries around the world talked about the desirability of connecting the Atlantic and Pacific Oceans for transportation and navigation purposes. It was assumed that the most likely spot would be in the Isthmus of Panama which represents the narrowest land area bordering both the Atlantic and Pacific Oceans. That was probably the first of many “assumptions” which would be made about the “Panama Canal” and how it might be constructed. As most of you project managers know, “assumptions” can be the downfall of good projects and of those not planned or executed so well.
Little did I know in 2011 when I spent ten days in Panama that it would launch a new understanding of the advancement of both project management and project risk management practices. The history of the Panama Canal development since 1850 mirrors the birth, development and improvement in project/risk management practices. And, as they say “the proof is in the pudding.”
For those of you who like to understand the background behind the development of a process or an invention or even a methodology, this is a real opportunity. I would recommend that you read Tom Kendrick’s book Identifying and Managing Project Risk: Essential Tools for Failure-Proofing Your Projects. Each chapter of this book contains a section on some aspect of project/risk management as it applies in the case of the Panama Canal development. From the first unsuccessful project to the second successful project to the interim improvement projects that have led now to the Panama Canal Expansion Program, this book gives a good view of how good and bad or nonexistent project and risk management practices can create project outcomes that are long lasting and very tangible.
For example, the first Panama Canal project by the French made gross assumptions about canal construction in Panama based on the French experience in completing the Suez Canal in 1869. The project was a commercial venture with many investors. However, the leader of the project was not technically trained and he failed to scope out the Panama Canal Situation and to define the many “risks” that Panama would present. As a result, the cost estimates were updated almost weekly as the project team learned more and more about what they did not know in the beginning.
The story of the French project is almost the same story as some of the nuclear power plant projects in the United States during the last 50 years. Cost escalation was astronomical and eventually the project was shut down, a failure to really define and carry out a realistic project plan for a Canal. The failed project had such far reaching percussions that some have said that it led to a new French government in 1892.
The second project was an American sponsored project by Teddy Roosevelt and the United States Army Corps of Engineers. Several chief engineers were employed on this project which did a better job of assessing “risks” and scope than did the French project. Nevertheless, the successful American project was a story in new technology development of dam building and electricity systems and controls.
Today’s Panama Canal Expansion Program is a $5 billion program with megaproject management and extraordinary risk management techniques being applied. It will be interesting to see the program completion in 2014 to ascertain how far project and risk management practices have advanced.
I encourage you to continue to read this blog for the latest thoughts and insights into project, risk and knowledge management subjects for project managers and PMOs. Thank you.
POST NOTE: In the 1850’s, the desire was so great to create a transportation link across Panama from the Atlantic to Pacific Oceans that a Panama Canal Railroad was completed in 1855. Based on well known railroad technology that had been utilized in many countries to that point in time, it set in motion a logistics and transportation evolution in Panama that has made that country a center for “supply chain and logistics” practices. There are many sea ports in Panama on both Atlantic and Pacific sides and the railroad links to all these ports have furthered this logistics development. When I was in Panama in 2011, my taxi ride from the hotel to the Panama Canal Education Center where I facilitated my courses took me by many railroads and supply centers. It was really impressive. You may want to read more about Panama’s Supply Chain and Logistics hub activities.