Planners of Megaprojects Almost Always Over-Promise and Under-Deliver

(p. B5) Bent Flyvbjerg is an expert in the planning and management of “megaprojects,” his name for huge efforts that require at least $1 billion of investment: bridges, tunnels, office towers, airports, telescopes and even the Olympics. He’s spent decades wrapping his mind around the many ways megaprojects go wrong and the few ways to get them right, and he summarizes what he’s learned from his research and real-world experience in a new book called “How Big Things Get Done.”

Spoiler alert! Big things get done very badly.

They cost too much. They take too long. They fall too short of expectations too often. This is what Dr. Flyvbjerg calls the Iron Law of Megaprojects: “over budget, over time, under benefits, over and over again.”

The Iron Law of Megaprojects might sound familiar to anyone who has survived a home renovation. But when Dr. Flyvbjerg dug into the numbers, the financial overruns and time delays were more common than he expected. And worse. Much worse.

His seminal work on big projects can be distilled into three pitiful numbers:

• 47.9% are delivered on budget.

• 8.5% are delivered on budget and on time.

• 0.5% are delivered on budget, on time and with the projected benefits.

. . .

Humans are optimistic by nature and underestimate how long it takes to complete future tasks. It doesn’t seem to matter how many times we fall prey to this cognitive bias known as the planning fallacy. We can always ignore our previous mishaps and delude ourselves into believing this time will be different. We’re also subject to the power dynamics and competitive forces that complicate reality, since megaprojects don’t take place in controlled environments, and they are plagued by politics as much as psychology. Take funding, for example. “How do you get funding?” he said. “By making it look good on paper. You underestimate the cost so it looks cheaper, and you underestimate the schedule so it looks like you can do it faster.”

For the full review, see:

Ben Cohen. “SCIENCE OF SUCCESS; 99% of Big Projects Fail. Lego Is the Fix.” The Wall Street Journal (Saturday, February 4, 2023): B5.

(Note: ellipsis added.)

(Note: the online version of the review has the date February 2, 2023, and has the title “SCIENCE OF SUCCESS; 99% of Big Projects Fail. His Fix Starts With Legos.”)

The book under review is:

Flyvbjerg, Bent, and Dan Gardner. How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything in Between. New York: Currency, 2023.

As Freedom Left Hong Kong, So Did Hundreds of Billions of Dollars and 100,000 Citizens

(p. B1) This summer, when Hong Kong’s stock market rout seemed to have no end in sight, the city’s financial chief, Paul Chan, jumped into action, creating a task force to inject confidence into a market that was being pummeled by global investors wary of China.

Hong Kong cut taxes on trading, and Mr. Chan went on a roadshow to Europe and the United States, promising measures to “let investors feel optimistic about the outlook.” Investors were anything but sanguine, however, and the city’s stock exchange is among the world’s worst-performing stock markets this year.

. . .

Hundreds of billions of dollars flowed out this year as money managers and pension funds reduced their holdings in Hong Kong, which has long been a gateway for foreign investors wanting to put money into mainland China. The outflows were largely driven by an economic downturn in China and mounting pressure on American investors to sell their (p. B3) exposure to Chinese companies.

. . .

A former British colony, Hong Kong was handed back to China in 1997 with a pledge that it would maintain a high degree of self-governance under a policy called “one country, two systems.” For two decades, this allowed Hong Kong to define itself as unique and distinct from the rest of China, while offering financial access to the world’s second largest economy.

But after citywide protests in 2019, Beijing imposed the national security law, which has silenced political debate and stifled civic activity.

More than 100,000 residents have left Hong Kong over the last few years, in part because of the security law and tough pandemic restrictions. Many young Hong Kong professionals who are still there have expressed a desire to leave, making it a challenge to recruit the talent that has helped the city function as a financial center.

Once a major hub for Wall Street banks, Hong Kong had a drought of initial public offerings this year. Companies raised the lowest amount of money since 2001, resulting in layoffs at financial institutions citywide.

Many international companies have stopped hiring for new positions in Hong Kong. With less money coming into the exchange and fewer transactions, dozens of brokerages have also closed.

For the full story, see:

Alexandra Stevenson. “Hong Kong Stock Market Ends in Loss For 4th Year.” The New York Times (Saturday, December 30, 2023): B1 & B3.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 29, 2023, and has the title “Hong Kong Stocks Plunge to Losses for 4th Straight Year.”)

Tom Watson, Jr. Managed IBM’s Rare and Successful Self-Disruption by “Transitioning the Firm to Electronic Computing”

(p. 9) Thomas J. Watson Jr. seemed, from a young age, to be destined for failure.

. . .

“He played with fire, shot animals in the nearby swamps and pilfered things from neighbors’ houses,” Ralph Watson McElvenny and Marc Wortman write in “The Greatest Capitalist Who Ever Lived,” a compelling new biography of Watson Jr.

. . .

This is far from the first book about IBM.

. . .

But this is probably the most theatrical book about IBM ever published. McElvenny, who happens to be Watson Jr.’s eldest grandson, is privy to “personal and corporate papers” and, as the endnotes mysteriously specify, many “family sources.”

. . .

“The Greatest Capitalist Who Ever Lived” is about the challenges of corporate and family succession, an essential topic given that IBM itself was the father figure to most of the computing and tech industry. Watson Sr., “the old man,” was a type familiar to our times: the tech titan who runs a large company as an extension of himself. (The IBM machine that beat the “Jeopardy!” champion Ken Jennings bears his name.) For four decades, IBM was Watson Sr.’s fief. The company “was run entirely out of one man’s breast pocket,” McElvenny and Wortman write. Watson Sr. “made all strategic decisions and most minor ones” and “delegated almost no authority.”

To his lasting credit, he did truly take care of his employees and their families in a manner that bred a strong loyalty. That said, Watson Sr. demanded conformity and could be erratic and cruel.

. . .

IBM faced a classic version of what the Harvard Business School professor Clayton Christensen has termed the “innovator’s dilemma” and what the Nobel Prize-winning economist Kenneth Arrow described as a monopoly’s disinclination to innovate. IBM was making plenty of profit on punched cards and accounting machines, its customers were happy, so why rock the boat?

Watson Jr.’s intense antipathy toward his father ended up saving IBM. Just before the United States entered World War II, Junior gained self-confidence the old-fashioned way: by joining the Army Air Corps and flying a B-24. When he eventually returned to IBM (pushed to do so by his commanding officer, Maj. Gen. Follett Bradley, who thought Watson would be wasted as an airline pilot), he became the internal champion of transitioning the firm to electronic computing. He was perhaps the only person who could oppose his father in a company built on yes men.

While the book’s title calls him “the greatest capitalist,” it might more accurately, if less ringingly, call him “the greatest manager,” for Watson Jr. was much better at delegating and using his employees’ talents.

For the full review, see:

Tim Wu. “Next-Gen.” The New York Times Book Review (Sunday, December 17, 2023): 9.

(Note: ellipses added.)

(Note: the online version of the review was updated Dec. 15, 2023, and has the title “The Father-Son Struggle That Helped Ensure IBM’s Success.”)

The book under review is:

McElvenny, Ralph Watson, and Marc Wortman. The Greatest Capitalist Who Ever Lived: Tom Watson Jr. and the Epic Story of How IBM Created the Digital Age. New York: PublicAffairs, 2023.

Intel Was a Feared Monopoly but Now “Is in a Fight for Its Life”

(p. B3) It might not look like it yet, but Intel is in a fight for its life.

. . .

The threats to Intel are so numerous that it’s worth summing them up: The Mac and Google’s Chromebooks are already eating the market share of Windows-based, Intel-powered devices. As for Windows-based devices, all signs point to their increasingly being based on non-Intel processors. Finally, Windows is likely to run on the cloud in the future, where it will also run on non-Intel chips.

. . .

It wasn’t always this way. For decades, Intel enjoyed PC market dominance with its ride-or-die partner, Microsoft, through their “Wintel” duopoly.

. . .

I asked Dan Rogers, vice president of silicon performance at Intel, if all of this is keeping him up at night. He declined to comment on Intel’s past, but he did say that since Pat Gelsinger, who had spent the first 30 years of his career at Intel, returned to the company as CEO in 2021, “I believe we are unleashed and focused, and our drive in the PC has in a way never been more intense.”

. . .

Geopolitical factors, for one, have the potential to change the entire chip industry virtually overnight. Intel could suddenly become the only game in town for the most advanced kind of chip manufacturing, if American tech companies lose access to TSMC’s factories on account of China’s aggression toward Taiwan, says Patrick Moorhead, a former executive at Intel competitor AMD, and now head of tech analyst firm Moor Insights & Strategy.

When it comes to Intel, he adds, “Never count these guys out.”

For the full commentary, see:

Christopher Mims. “KEYWORDS; Is This the End of ‘Intel Inside’? Not If Intel Has Anything to Say About It.” The Wall Street Journal (Saturday, Dec. 2, 2023): B13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date December 1, 2023, and has the title “KEYWORDS: CHRISTOPHER MIMS; Is This the End of ‘Intel Inside’?”)

Communist China’s Restriction of Citizens’ Freedom Shows Its “Fragility”

(p. A8) HONG KONG—Prominent Pro-democracy activist Agnes Chow said she was exiling herself in Canada after getting her passport back from police in return for taking a patriotic trip to China, an exchange that sheds light on Hong Kong’s efforts to re-educate political opponents.

. . .

When Chow returned to Hong Kong, she said, she was instructed to write a letter thanking the police for the trip and enabling her to understand the great development of the motherland.

. . .

“I have never denied China’s economic development,” Chow wrote on Instagram. “But how can such a powerful country send people who fight for democracy to prison, restrict their freedom of movement, and even require them to go to mainland China and visit patriotic exhibitions in exchange for their passports? Is this not a kind of fragility.”

For the full story, see:

Elaine Yu. “Activist Flees Hong Kong After China Trip.” The Wall Street Journal (Tuesday, December 5, 2023): A8.

(Note: ellipses added.)

(Note: the online version of the story was updated Dec. 4, 2023, and has the title “Activist Flees Hong Kong After Re-Education Trip to China.”)

“People’s Experience with the D.M.V.” Teaches Them “the Government Is Plodding, Slow”

(p. B1) The film “Leave the World Behind” centers on the idea of mistrust and how easy it is for humans to lose empathy for one another when faced with a crisis. It is at once unnerving, misanthropic and bleak, and, perhaps somewhat surprisingly, it’s produced by Barack and Michelle Obama’s production company, Higher Ground.

. . .

(p. B5) While Mr. Obama was no stranger to Hollywood — since his early days of campaigning for the presidency he found a welcoming audience among the show business elite — he has found that working in this business has taken some getting used to.

“It’s ironic that the private sector is made out to be this hyper-efficient thing, and the government is plodding, slow,” he said. “I think part of it is ideological and part of it is people’s experience with the D.M.V.”

For the full story, see:

Nicole Sperling. “Reimagining Storytelling, Obama Style.” The New York Times (Friday, December 8, 2023): B1 & B5.

(Note: ellipsis added.)

(Note: the online version of the story was updated Dec. 7, 2023, and has the title “Obamas’ Vision for Hollywood Company: ‘This Isn’t Like Masterpiece Theatre’.”)

Elon Musk Wants to Go to Mars, But He Wants Freedom Even More

The video clip above is embedded through YouTube’s “share” feature. It is a clip from the annual DealBook Summit of The New York Times. Andrew Ross Sorkin interviewed Elon Musk on November 29, 2023 at the Lincoln Center in New York City.

A year earlier at the 2022 DealBook Summit, Netflix co-founder Reed Hastings said: “Elon Musk is the bravest most creative person on the planet.”

Musk’s dream is for humanity to go to Mars. He is trying to privately fund his dream with billions of dollars he hoped to earn from Tesla. His investment of 44 billion dollars to buy Twitter may end his dream. But he bought Twitter to defend free speech, and free speech is required for the fast advance of science and technology. So if we ever make it to Mars we will owe much to Elon Musk. And even if we never make it to Mars we still will owe much to Elon Musk.

The Orthodox Establishment Did Not Understand Michael Milken’s Brilliantly Disruptive Innovations

(p. C13) I . . . ended [the year] with . . . with Richard Sandler’s “Witness to a Prosecution: The Myth of Michael Milken.”

. . .

Mr. Milken’s brilliance led to investments in companies that the “establishment” ignored. When those companies generated outsize returns, there was more interest in trying to find wrongdoing than in understanding his innovative approach to investing.  . . . disrupting established orthodoxies is difficult and . . . the rules established by social structures are riddled with biases that can end up undermining the public good.

For the full review, see:

Nina Rees. “12 Months of Reading: Nina Rees.” The Wall Street Journal (Saturday, December 9, 2023): C13.

(Note: ellipses, and bracketed words, added.)

(Note: the online version of the review has the date December 8, 2023, and has the title “Who Read What in 2023: Political Voices and Policy Makers: Nina Rees.”)

The new book on Michael Milken praised above is:

Sandler, Richard V. Witness to a Prosecution: The Myth of Michael Milken. ForbesBooks: Charleston, South Carolina, 2023.

A book on Milken that I found convincing many years ago is:

Kornbluth, Jesse. Highly Confident: The Crime and Punishment of Michael Milken. New York: William Morrow & Co., 1992.

To Succeed as an Engineer, “All You Have to Be Is a Capitalist Who Wants to Make Better Things and Sell More of Them”

(p. B9) Dr. Wulf made a career in computer science when the field barely existed. As the importance of computers grew, his career became a road map of the developing field: first in academic research, next as an entrepreneur and then as a policymaker.

. . .

He and his wife, Anita K. Jones, also a computer science professor at Carnegie Mellon, left the university in 1981 to found Tartan Laboratories, which specialized in compilers. (It was named for the university’s athletic teams.)

. . .

Dr. Wulf and Dr. Jones moved to faculty positions at the University of Virginia, but Dr. Wulf took a leave of absence to join the Directorate for Computer and Information Science and Engineering at the National Science Foundation. There, he worked with Al Gore, then a senator, to craft legislation to make the military’s computer network, Arpanet, available to civilian researchers through the foundation’s NSFnet. That model gave way eventually to widely accessible, commercially operated networks.

. . .

Ed Lazowska, a computer scientist at the University of Washington, said of Dr. Wulf in an interview, “I don’t mean to diminish his technical contributions” — both he and Dr. Jones “are giants in the field,” he said — but Dr. Wulf, he believes, will be most remembered for his inspiring leadership in engineering.

In particular, he said, Dr. Wulf was “a huge champion of broadening participation in the field” by not only women and members of other underrepresented groups, but also by people who did not necessarily come from “big research universities, mostly on the coasts.”

Dr. Wulf called engineering “problem-solving under constraints” — time, money or other practical issues. Bringing diverse experiences and points of view to problems, he said, raises the odds of success. Without diverse views, he told an academy meeting in 1998, “we pay an opportunity cost — a cost in products not built, in designs not considered, in constraints not understood, in processes not invented.”

Or, as Dr. Lazowska put it: “You don’t have to have a social conscience. All you have to be is a capitalist who wants to make better things and sell more of them.”

For the full obituary, see:

Cornelia Dean. “William A. Wulf, 83, Who Helped Pave the Way to the Internet, Dies.” The New York Times (Saturday, March 25, 2023): B9.

(Note: ellipses added.)

(Note: the online version of the obituary was updated March 23, 2023, and has the title “William A. Wulf, Pioneering Computer Scientist, Dies at 83.” Where there is a difference in wording in versions, the passages quoted above follow the online version.)

“Serendipitous” Discoveries Related to Two “Odd-Looking” Animals Was Source of Weight-Loss Drugs

(p. A1) The blockbuster diabetes drugs that have revolutionized obesity treatment seem to have come out of nowhere, turning the diet industry upside down in just the past year. But they didn’t arrive suddenly. They are the unlikely result of two separate bodies of science that date back decades and began with the study of (p. A2) two unsightly creatures: a carnivorous fish and a poisonous lizard.

In 1980, researchers at Massachusetts General Hospital wanted to use new technology to find the gene that encodes a hormone called glucagon. The team decided to study Anglerfish, which have special organs that make the hormone, simplifying the task of gathering samples of pure tissue.

. . .

After plucking out organs the size of Lima beans with scalpels, they dropped them into liquid nitrogen and drove back to Boston. Then they determined the genetic sequence of glucagon, which is how they learned that the same gene encodes related hormones known as peptides. One of them was a key discovery that would soon be found in humans, too.

It was called glucagon-like peptide-1 and its nickname was GLP-1.

After they found GLP-1, others would determine its significance. Scientists in Massachusetts and Europe learned that it encourages insulin release and lowers blood sugar. That held out hope that it could help treat diabetes. Later they discovered that GLP-1 makes people feel fuller faster and slows down emptying of food from the stomach.

. . .

The key to the first drug would come from a serendipitous discovery inside another odd-looking animal.

Around the time Goodman was cutting open fish, Jean-Pierre Raufman was studying insect and animal venoms to see if they stimulated digestive enzymes in mammals.

“We got a tremendous response from Gila monster venom,” he recalled.

It was a small discovery that could have been forgotten, but for a lucky break nearly a decade later when Raufman gave a lecture on that work at the Bronx Veterans Administration. John Eng, an expert in identifying peptides, was intrigued. The pair had collaborated on unrelated work a few years before. Eng proposed they study Gila monsters.

. . .

Eng isolated a small peptide that he called Exendin-4, which they found was similar to human GLP-1.

Eng then tested his new peptide on diabetic mice and found something intriguing: It not only reduced blood glucose, it did so for hours. If the same effect were to be observed in humans, it could be the key to turning GLP-1 into a meaningful advance in diabetes treatment, not just a seasickness simulator in an IV bag.

Jens Juul Holst, a pioneering GLP-1 researcher, remembers standing in an exhibit hall at a European conference next to Eng. The two had put up posters that displayed their work, hoping top researchers would stop by to discuss it. But other scientists were skeptical that anything derived from a lizard would work in humans.

“He was extremely frustrated,” recalled Holst. “Nobody was interested in his work. None of the important people. It was too strange for people to accept.”

After three years, tens of thousands of dollars in patent-related fees and thousands of miles traveled, Eng found himself standing with his poster in San Francisco. This time, he caught the attention of Andrew Young, an executive from a small pharmaceutical company named Amylin.

“I saw the results in the mice and realized this could be druggable,” Young said.

When an Eli Lilly executive leaned over his shoulder to look at Eng’s work, Young worried he might miss his chance. Not long after, Amylin licensed the patent.

They worked to develop Exendin-4 into a drug by synthesizing the Gila monster peptide. They weren’t sure what would happen in humans. “We couldn’t predict weight loss or weight gain with these drugs,” recalled Young. “They enhance insulin secretion. Usually that increases body weight.” But the effect on slowing the stomach’s processing of food was more pronounced and Young’s team found as they tested their new drug that it caused weight loss.

To get a better understanding of Exendin-4, Young consulted with Mark Seward, a dentist raising more than 100 Gila monsters in his Colorado Springs, Colo., basement. The lizard enthusiast’s task was to feed them and draw blood. One took exception to the needle in its tail, slipped its restraint and snapped its teeth on Seward’s palm—the only time he’s been bitten in the decades he’s raised the animals. “It’s like a wasp sting,” he said, “but much worse.”

Nine years after the chance San Francisco meeting between Eng and Young, the Food and Drug Administration approved the first GLP-1-based treatment in 2005.

The twice-daily injection remained in the bloodstream for hours, helping patients manage Type 2 diabetes. Eng would be paid royalties as high as $6.7 million per year for the drug, . . .

For the full story, see:

Rolfe Winkler and Ben Cohen. “Two Monsters Spawned Huge Drugs.” The Wall Street Journal (Friday, June 24, 2023): A1-A2.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 23, 2023, and has the title “Monster Diet Drugs Like Ozempic Started With Actual Monsters.” The sentence about “a serendipitous discovery” appears in the online, but not the print, version of the article. The passages quoted above also include several other sentences that appear in the more extensive online version, but not in the print version.)

Global Warming Can Allow a “Sudden Efflorescence” of Adaptation from Dormant “Sleeping Beauties”

Above the title of the book review quoted below, the Wall Street Journal printed a few lines from a poem by Baudelaire:

Many a jewel of untold worth
Lies slumbering at the core of Earth
In darkness and oblivion drowned . . .
–Charles Baudelaire, “Le Guignon”

(p. C12) In his new book, Mr. [Andreas] Wagner, a professor at the Department of Evolutionary Biology and Environmental Studies at the University of Zurich, showcases biological “sleeping beauties”: animals, plants, even bacteria that for generations plugged along with modest evolutionary success, only to later flourish spectacularly. “Sleeping Beauties: The Mystery of Dormant Innovations in Nature and Culture” explains how evolutionary adaptations sometimes go from dormancy to full flowering, while also suggesting that an analogous process applies to human innovations, including science, technology and the arts.

. . .

First we need to recall that not every biological trait an organism possesses is optimal for its current environment. The swim bladder, for example, evolved in fish as an aid to adjusting buoyancy, only later becoming the basis for lungs when their descendants became terrestrial. And the human appendix currently appears to be more an evolutionary liability than an asset, although it may well have conveyed immunologic benefits in the past—and could even prove adaptive in the future. Certain traits may develop that are not immediately adaptive, in the sense of contributing directly to the reproductive success of the genes responsible for the trait and of the individuals carrying them.

If an organism develops a characteristic maladapted to its environment, it and the genes responsible for the trait are selected away into oblivion. But if the novelty is not particularly harmful, or even somewhat helpful, the trait may simply hang around through the generations—until a descendant organism finds a welcoming environmental niche.

The natural world is filled with solutions awaiting a problem.  . . .  But when environments change (and they always do), a wonderful and lively explosion can ensue.

Mr. Wagner refers to this sudden efflorescence as “adaptive radiation”—“only with a key innovation,” he writes, “can a species exploit existing opportunities, such as a warmer climate, a new source of food, or a superior form of shelter. In this view, any one adaptive radiation has to wait, possibly for a long time, until the right innovation arises. And the need to wait holds evolution back.”

In regard to evolutionary developments that at first seem to bear no fruit, Mr. Wagner could have quoted from Thomas Gray’s “Elegy Written in a Country Churchyard”:

Full many a gem of purest ray serene,
The dark unfathom’d caves of ocean bear:
Full many a flow’r is born to blush unseen,
And waste its sweetness on the desert air.

In the world of human creativity, “full many” a terrific creation has been neglected or ignored in its time.

For the full review, see:

David P. Barash. “In Praise of Late Bloomers.” The Wall Street Journal (Saturday, April 29, 2023): C12.

(Note: ellipses, and bracketed name, added, except for first one at the end of quoted passage from Baudelaire.)

(Note: the online version of the review has the date April 28, 2023, and has the title “‘Sleeping Beauties’ Review: Nature’s Late Bloomers.”)

The book under review is:

Wagner, Andreas. Sleeping Beauties: The Mystery of Dormant Innovations in Nature and Culture. London: Oneworld Publications, 2023.