Afford Anything - How BIG Things Get Done, with Dr. Bent Flyvberg

Episode Date: February 23, 2023

#429: Have you ever thought about remodeling a kitchen? Retrofitting a camper van for #vanlife? Converting your basement into an Airbnb? Building a custom website? Recording an album? Did you worry that this project will cost more and take longer than you expected?  This episode is all about how to complete projects on-time and under budget.  Today's guest, Dr. Bent Flyvberg, is an Oxford University professor with a Ph.D. in urban geography. He’s published more than 200 scholarly articles on megaproject planning and management, decision-making, and social science methodology. He’s written or edited 10 books, including recently co-authoring “How Big Things Get Done.” He shares examples ranging from the Sydney Opera House to Pixar movies to the California High Speed Rail, illustrating why some projects flourished while others flopped. He joins us on today’s episode and talks to us about why some projects succeed while others turn into colossal disasters. He offers tips for how we can apply lessons from megaprojects to our own lives. Enjoy! Timing of discussion points as of February 2023: 02:19: Why are some projects on time and under budget and others aren’t? 03:24: The difference between successful and unsuccessful projects 07:38: Which questions do you ask when you’re choosing someone to work with on the project? 11:44: How cognitive biases and power dynamics and influence project outcomes 24:22: Why people forsake common sense when it comes to big projects 29:34: How to plan and iterate, knowing that things will change 39:26: The biggest risk to projects For more information, visit the show notes at https://affordanything.com/episode429 Learn more about your ad choices. Visit podcastchoices.com/adchoices

How do some projects get finished on time and under budget while others don't? Whether you're remodeling your kitchen or living the van life. Today's episode is all about how you can make sure that your biggest projects don't end up with mega cost overruns. Welcome to the Afford Anything podcast, the podcast that understands that you can afford anything but not everything. Every choice that you make is a tradeoff against something else. So what matters most? What tradeoffs are you willing to make? That's what we are here to explore. My name is Paula Pan. I'm the host of the Afford Anything podcast. If you're a long-time listener,

as you can tell, we're trying a new intro. Hit me up on Instagram and let me know what you think of it. And by the way, we're doing this in celebration of Afford Anything's 12th birthday, which is today. Our 12-year anniversary, birthday, birth-aversary is today. Not of the podcast, but of the brand, the website, the idea. So happy 12-year. birth-aversory, to all of you in the Afford- Anything community. Today's guest is Bent Flubia, a professor at Oxford University's business school. He holds a Ph.D. in urban geography, and his expertise is planning and managing megaprojects. He has documented what he calls the Iron Law of Megaprojects.

Projects go over time, over-budget, and under-benefits over and over again. according to the data, mega projects that are on time, on budget, and have the benefits that they set out to have, those projects are rare. Why is that? And what lessons from that can we apply to our own lives? Here he is to answer these questions. Hi, Bent. Hi, thank you for having me. I really appreciate it. Absolutely. You once worked on a very complicated project. You built over 20,000 schools in Nepal and did it on time and under budget.

That's remarkable given how many projects like the Sydney Opera House go far over budget. So I know this is going to be the topic of the next 45 minutes. But in a brief nutshell, why is it that some projects are on time and under budget and others aren't? Some projects are just really difficult to do, super complex, and they're bespoke there, especially the design for the situation. And they're the ones that go wrong. Some projects are really easy to do because they're standardized. I talk a lot about modularity.

That's just a clunky way to say that things can be built like Legos, you know, the toy Legos, where you have one building block and you put it on the other. And that's basically how the schools in Nepal were built, you know, were as Legos. So we designed just two or three different types of classroom. And then building a school was just like putting those Legos or classrooms together. And actually some schools only needed one classroom. Some villages had so few kids that there would be just one classroom. Other would need two, three, four, whatever.

And you just clicked them on like one after the other. So it was pretty easy. And every time you did one, you would learn something. So you could do the next one better because you would be doing the same thing. You didn't do something different next time. And that's actually the difference between successful projects and unsuccessful projects, is that on the successful projects, you get what we call a positive learning curve where you get better every time you do what it is that you are doing and you do it in a

repeatable fashion. Whereas the projects, you know, like something like a nuclear power plant is the archetype of this bespoke project that you only do it once. So everything is difficult. And you can really learn from it because the next version, is going to be different. So what you're saying is the more something can be formulaic or templatized, the more likely you are to be efficient at it. Yes. And it fits with our experience as humans that we learn by repetition. That's basically how we learn. So if we design projects in a way where

they can't be repeated, we shouldn't be surprised when we don't learn anything and things go wrong. Right. So how does that apply for the average person listening who is trying to do a kitchen remodel in their home. They want to avoid the fate of a couple that you talk about in your book. They thought that they were doing just a minor kitchen remodel and it blew up into an $800,000 project. Given the fact that most people who are not real estate investors, people who are primary owners, owner occupants only remodel their kitchen maybe once or twice in their life, how do they take that modularity concept or any other concepts of efficiency and apply it to their own life experience. Yeah, we have a whole chapter about that in the book, and this is the story

about David and Deborah in Brooklyn. And they had this small flats in Brownstone, and they just wanted a small kitchen renovation. They liked to cook and entertain, and so they thought they would improve their kitchen. And it ended up blowing totally up in their faces with a total rebuild 400% over-cost and years late, and it turned into quite a nightmare. It's not uncommon. You know, you'll hear a lot of stories like that. And when we started it more systematically, the data show that this happened much more often than it should. And the way, you know, to not end up in that kind of situation is indicated in your question. You say that this is something that we only do maybe once or twice in a lifetime.

That means that we're actually not very experienced at doing it. So we are novices when we start doing something like that. So the first thing is to actually acknowledge that you are a novice, that you don't know what it is, that you're going to be doing. So you need to do a lot of thinking. You need to work with professionals who have done this before. So you need to find somebody who actually has a track record of successfully delivering the kind of kitchen renovation or house renovation that it is that you want to do.

And then you need to sit down with them and really talk it through. What is it that you want to do? Why do you want to do it? What are your reasons? What is it that you want to achieve, we call that thinking from right to lift, that you actually start trying to visualize the end product. Like, what is it? What is your home going to look like once it's finished?

And also, what is it that you want to achieve with what you have done? Do you want to entertain more people in your home? Or is it just for the family? And so on and so on. What kind of budget do you have? And then you start with the end product in mind. Then you work backwards. Then you work backwards through the process that is going to take you to that product.

And you do it with experienced people. So basically that's the way to do it, you know, like really think things through well beforehand and engage with experienced people, especially when you're doing something that you don't have experience with yourself. A couple of points come up from that. One is you talk about starting with the end product in mind. That's notable because as you point out, renovate the kitchen is an answer, not a question. And so the failure that a lot of people commit up front is that they fail to ask questions such as what is it? that we're actually trying to achieve. We're trying to achieve having a better space to entertain guests. Okay, that means more than just a kitchen renovation. That means an updated fireplace or a nicer powder room, et cetera. Given a beginner's inexperience, how do they know which questions to ask?

How do they know if they're asking their right questions? And even when they do select experts with whom to work, selecting good experts is itself a skill set. How do you distinguish mediocrity from talent when you are evaluating people, architects, contractors, people who are doing a job that you're unacquainted with? I agree with you that it's a skill set in itself to choose the right people. And that's really important to be aware of. What it takes is to ask around, I mean, one thing you do know, even if you're not experienced, is that you know what it is that you want.

It's your needs, right? And that's where the whole project starts. So you might not know in every detail what it is that you're not. you want, and you might change your mind about what it is that you want once you start engaging with professional. But at least you have an idea of what it is that you want when you start out. So that's your competence. Nobody knows that better than you. Nobody will know better than you what it is that you want and what your needs are. So that's your strength. Now, then the difficult part is to find somebody who can actually deliver what you want

the way you want it in a professional way. And here the thing is to look at people's track records. It's not about which company you hire. It's actually about a specific team that shows up on the work side. That's how specific it is. You need to have a four men or four women on site, you know, who actually knows what they're doing. That's the most important person is the person on site who has the responsibility for the project. And it doesn't matter you hire a company with a generally good reputation if you get their worst four men or four women that won't help you. So you need to be that specific.

And that's what you need to know as the client, the person who, who's going to be paying the bills, you need to invest some time up front in finding those right people. That's your insurance, you know, that you'll get a project that works. Oftentimes, you've made the point that experience tends to mold better people. And yet, so much of the time, not just in the personal realm, but in the professional realm, when people are trying to build something new or innovative, they necessarily turn to people who are inexperienced. So one of the case studies that you point out is the high-speed rail that they've been trying to build between L.A. and San Francisco. A project like that has never been undertaken in the United States before.

Certainly there are people in Japan who are very experienced at high-speed rail, but locally not so much. What should a person do in a situation in which the experts that they're turning to are themselves inexperienced? And they shouldn't turn to those experts in the first place. and California shouldn't have turned to inexperienced people to build that rate line. That's probably the biggest mistake that they made, is to not engage with people who have done this over and over before. And that would be, like you said, either people from Japan or from France, maybe China. And the French actually tried to get in on it and went to California,

try to convince the California government that you'd be using the French to build that high-speed rail line, which was good advice. But the Californians decided not to do it. And it's turned into what's called now the high-speed rail line to nowhere because they're just building a piece of it in the central valley where you don't need a high-speed rail line. So it's turned into quite an absurdity because they didn't engage with people who were experienced with this.

But that's good politics, you know, because there will be a lot of pressure to hire local people. But, I mean, if you are responsible government officials, You won't cave into pressure like that if you don't have people who can do things. You've talked about how on any project, whether it's in the professional domain, the governmental domain, or the personal household domain, oftentimes there are two things that get in the way. One is human psychology. And the other is the internal jostling for power. Some people might use the shorthand-term politics, but I don't mean, you know, you don't mean national politics in that sense. you mean the power dynamics of the players inside.

Can you talk about how both of those factors influence the outcome of projects? Psychology talks about cognitive bias, all sorts of psychological biases that we have. The most preeminent one is probably optimism. So we are hardwired to be optimist. Almost all people are optimists. I mean, for good reasons, we need optimism, certainly, in our lives. But sometimes optimism is misplaced, and this is the case on big projects. You know, if you're optimistic about a project, it means that you think it can be done cheaper than it can be,

and you think it can be done faster than it can be, and you think that it can be done with much bigger benefits, that it will deliver more than promised. And that's what the data show, you know, that we very, very clearly, we are optimistic about these things, because what we see in the data is a huge overincidence of cost overruns, schedule overruns, benefit shortfalls. So clearly, the data bring out this thing about optimism. There are other cognitive biases like overconfidence bias. There's something called availability bias. We actually tend to jump on the first and best thing we see. And we have a bias for not thinking, basically. There is a bias for not thinking. We want to get going. And as soon as we have a solution,

that sounds, you know, this sounds like it could work. We would just run with that. And it's a big mistake when we're talking about big projects, whether they're your private big projects or big projects in corporations and governments, it's a bad idea just to run with the first and the best thing you think about and you need to think through, are there alternatives, are there other ways we could do it and so on? So that's psychology for you. The other side, which we call power bias or political bias, but not party political. It's nothing to do with the politics in Washington, D.C., and so on. It's got to do with the politics that's every where they're human.

So it's jogging for position, for instance, or competing for scarce resources. That's something we do all the time, you know, in the workplace, certainly, and sometimes at home to and in society. And if you are competing for scarce resources for projects, for instance, in government or in private business, you can compete by making your project look good on paper. That's a classic. So you cook the books, as it's called. You're cooking the numbers.

by making your project look cheaper than it will be, it looks better on paper. By making it look like you can do it faster that it can be. Again, people are more likely to say yes to something that looks like it can be done cheaply and fast than something that would be expensive and slow, you know. So that's the way to cook the books. It's a way to make things look good on paper.

So that's the power bias. That's deliberate. Whereas the cognitive biases are non-deliberate. This is something we do. We are optimistic without thinking about we are optimistic. We are not jogging for position without thinking that we are jockeying for position or for scarce resources. We'll come back to this episode after this word from our sponsors. Fifth Third Bank's commercial payments are fast and efficient, but they're not just fast and efficient.

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One way to overcome some of those biases and some of those tendencies is to look at what other projects of a similar nature have cost. So going back to the kitchen remodeling example, taking a look at what the average kitchen remodel in your particular area or city or town costs could be one way, one of many ways of making an estimate. But even that has its own flaws. So there are kind of different approaches to fact-checking our own estimates, but each one comes with its own set of restrictions. Can you talk more about that? Yeah, so the conventional way of estimating things are done from the inside-out. So you understand the project from the inside, and then you try to estimate what is it going to cost. And psychologists call this inside-out estimating.

So let's say you're doing that kitchen renovation. You try to understand how many square feet of tiles do I need, how many square feet of flooring, what kind of counter do I need, how many cupboards, et cetera. And so you just make long lists of everything that you need. Then you find the unit price of each of these things. So if you have X square meters of flooring, then you say X time the unit price for flooring, and then you have the price, the total price for the floor, and the same with the cabinets, et cetera. And how many hours do you need workers to build this?

And then you multiply the hours by the hourly rates or day rate, whatever it is. And you sum up all those numbers and then you get an estimate. That's the classical way of doing things. And you get a wrong estimate. So we show that in our data very clearly that when you do this inside out estimating, you get very inaccurate estimates. Because there are so many things that are not taken into account, the famous unknown unknowns, you know, when they come in to put in your new floor,

they rip up the old floor and they find mold, you know, that's a classic. So now the mold needs to get removed and you complain to the builders, hey, nobody told me this and now all of a sudden it's 20% more expensive and they will complain back and say, how could we know this? We didn't know you have mold in your home. Like, we're not responsible for this. It's just a fact of life, you know, and it is a fact of life. The same with the electricity wiring, you know.

They rip out the walls and they see that your electricity wiring is, it's over. and not up to current standards. They're not allowed to change this without bringing it up to current standards. And all of a sudden, you have a new course that nobody knew was going to be there. So that's why inside out estimating doesn't work. And generally, you get cost overruns when you use inside out estimating between 50 and 100 percent on a kitchen renovation. Like the other way, the alternative way, is outside in where you actually go out,

let's say you're doing a kitchen renovation and you ask everybody in your family and amongst your friends who have done kitchen renovations within the last five, ten years, you ask them, okay, when you did your kitchen renovation, how much did it go over budgets? Or how much did it cost? But it's actually better to ask how much did it go over budget? That will give you a more accurate number. Right. Because it's relative.

You just need a percentage, and you can apply that percentage to your own projects. And let's say you ask 1015, you have 1015 friends and family members who have done kitchen. renovations and they each give you a number. So somebody will say it didn't go over budget, zero percent. Somebody would say it was a nightmare. It tripled and cost. It went 200 percent over budget, tripled and cost. And others will be somewhere in between.

You add up all those numbers and you divide them by the number that you asked. And then now you have an estimate of the overrun that you can add when you go out and ask the builders how much it's going to cost. You just add that percentage to whatever they say. They use the inside out thing. Then you put the outside in correction on top. of that, and now you will have a much more realistic estimate. It's not going to be 100% correct, but it's going to be much more correct, and it's going to be debiased. So the inside-out estimate

has a bias. It's optimistic because you can't know all the unknown unknowns. The outside in estimate include all the unknown unknowns and everything else that hit the projects in the reference group of projects. And therefore, it is unbiased and therefore it's much more realistic. So that's the way to go about it. What strikes me when I hear you say that is that from an estimator's perspective, your family and friends are essentially a random sampling because they may live in different cities or different states. They may have different levels of finishes in their kitchen. They may have different square footages. They're essentially a completely randomized sampling as opposed to, say, people who live on your street or people who live in your neighborhood or people of your same

socioeconomic glass. Do you find that that randomized sampling, sampling is actually more informative? I mean, the closer you could get to the kind of renovation that you're doing and make that your sample, the better so that you have examples that are similar to your own. But that comes with a huge warning because people often use that as an excuse to not collect any data at all because they can't find anything they think that is exactly like what they're doing. So they think because it's not exactly what I'm doing, the numbers are irrelevant. And that is emphatically not the case.

it is much better to take random kitchen renovations and then use those as a basis for your number than it is to take nothing, which is what people typically do. They typically take nothing and don't do this. Right. One example of inside out estimating that went wrong is Robert Caro when he was writing a book. He was a newspaper journalist, and he estimated that it would take him about a year to write his book because he just, thought about how long it took him to write an article, divided the length of his book by the word count of an average article, and figured it would take about a year. In fact, it took six, seven years, I think. Seven years. It took seven years.

And the book is the power broker about Robert Moses, so the constructs in Saar, probably the person in maybe in the world, but certainly in the United States that has built the most mega projects of any person. he's to a large extent responsible for the big projects that we see in New York even today from the first half of the century. It's funny, Robert Carrey has a film out right now, actually, where he tells this story, and we wrote the story before his film came out, so it's kind of funny. So it must be a really important story for him. And I think it was because it almost ruined his family, their finances, and he really thought that he could write the book.

His estimate was nine months, and then he added three months, and then he said, okay, I can write within a year, and he felt very conservative in that estimate. But the problem was that he anchored, as we call this, in the wrong experience, which was the experience of a journalist, and writing journalistic articles for a New York newspaper, which is what he had done up to that point, is very different from writing a big complex book that takes enormous research, as the power broker did. Robert Carroll found this out the hard way, you know, and he explains how he got so tired of the question, you know, how are things going with your book? Because he would be one year in and he

wasn't anywhere in finished and he would be two years in, same thing, three years in, same thing. When he was five years in, he got a desk at the New York Public Library. They have some desk, you know, that they allocate to authors who are using sources in the New York Public Library. and they did that then. They do it still today. He got one of those desks, and then he met other authors of big books, and then he realized to his great relief that this was common, that other authors actually took just as long for writing their books.

They told him this when he was in conversation with him in the New York Public Library. So finally, he felt that there was nothing wrong with him. He had thought there's something fundamentally wrong with me as a writer, because I just can't do this, you know. And he realized this is just the name of the game, you know, when you're writing this kind of book. It didn't help him financially, of course. He and his wife had to sell their house, actually, to finance the book and move into a flat that he hated. So it had real costs to Robert Caro and his family.

But he got it done, and the book won the Pulitzer Prize, so it had a good outcome. Wow. But that mistake of inside-out estimating is, I mean, that's quite a dramatic example. So, yeah, he did an inside out from his own experience and just think about how easy it would have been for him. If he had thought the way that we are talking now, he would simply have, you know, gone maybe to the New York Public Library and identified, let's say, 10, 15, 20 books that he thought were similar to the kind of book that he wanted to write now. Then he could drop a short note to each of the authors of those books and ask them, how long did it take you to write your book? And probably a lot of authors like to help other authors, so they would answer. And it wouldn't take a long time.

They would just say like five years, seven years, nine years, three years. And Robert Carroll would take these numbers, add them up, divide them by the number of authors that he had asked. And now all of a sudden he would have a realistic estimate without hardly any work at all. It's just about thinking the right way. That's all it takes. It's not a lot of work. It's thinking in a common sensical way, you know. But what we find in projects, you know, small like writing a book and big like building,

skyscrapers and high-speed rail is that common sense is actually not that common. And why is that? Why do so many people forsake common sense when it comes to these big, ambitious complex projects? We are being tripped up by our own psychology. That's the basic answer. It's human nature. This is also why we find the same pattern in all sorts of different types of products. You wouldn't think that making a Pixar movie and building an art museum had much to do with each other. But they do, you know. It's because this is all about human nature. So we find that it's about the people who are doing things and they bring their biases to whatever they're doing.

So it doesn't matter what they're doing. They bring the same biases. That's the way they are hardwired. And so if one of those biases is optimism, you'll find optimism in every project, no matter which project it is. And that's exactly what we find. So that's the answer to your question is that our psychology is tripping us up. We'll come back to the show in just a second, but first. One of the things that you advise is to think slow, to take your time before you really dive into a project. And most people have a bias towards action. Yeah.

So that's one of our cognitive biases is a bias towards action and a bias towards not thinking, you know, which is identical. It's called availability bias. We'll just run with the first idea that we get is something that is very well documented. with psychologists. And thinking slow is the antidote to that, you know, is to not run with the first thought that you get to actually sit down and think slow in order to think through what it is that you're doing. And that takes effort.

It doesn't come naturally to us. You know, we studied the people who are successful. And we find that this is what they're doing. So we, it's very easy to study failure because there's so many failures in big projects. But we've also made a real point of studying. of studying the small percentage, actually a fraction of projects that are really successful and find out what is it that the people do that are successful. Are they just lucky or do they actually have a method that they follow?

And it's the latter. They actually do have a method. It doesn't mean that luck doesn't play a role. It does. But for the people who are able to replicate success over and over and over again, as we show in the book with examples as different as movies and buildings, fancy architecture, successful people sit down, they deliberate, they simulate actually, they try to build the thing. So architects build their buildings on computers before they build them in reality

so that they can simulate everything that could go wrong with the building. Before they go out on the ground, Pixar does the same, they simulate their movies, they iterate, they go over and over again, they go through what the movie is going to be like from just a very vague idea of something until it's in deep detail on storyboards and lots of images that have been generated and only then do they start shooting when they know exactly what it is that they're going to shoot for their next animation movie. So that's the characteristic of the successful people. They spend a lot of time thinking slow before they act fast. Right. One of the contrasts that you paint is Frank Gehry and his designs, which are painstakingly

simulated on a computer before there's ever any groundbreaking versus the Sydney Opera House where there was a lot of pressure to break ground right away. And that ended up hamstringing the ultimate result. Yeah. So, yeah, we used the contrast between Frank Gehrie's Guggenheim Museum in Bilbao and the Sydney Opera House in Australia. Because it illustrates so well this thing about what happens if you don't think slow, which they didn't.

In Sydney, the order was edges to get going. they had to start construction. They were forced to start construction by the governments before they even had final drawings. So they didn't know what they were building, but they were told start building it. We need to be seen to do this. It's very important that we get some sticks in the ground

so the project cannot be stopped. And that meant that they got a 10-year delay on the project. So because they were thinking so quickly, and with such undeveloped ideas, it took forever to do the project because they had to figure it out while they were going along. whereas the Guggenheim Bilbao is the exact opposite. They took a couple of years to think through everything before they started,

and then they built it, you know, in four years after that, and on time and a little under budget even, and making many more benefits for the museum and for the city and the region than they had hoped even in their wildest dream. So that's a great contrast. And it's an illustration, but the data show that it applies across the board, you know, you need to think slow and act fast if you want to be successful. How can a person apply that, given that sometimes things work out on paper very differently than they work out in real life.

And when you actually do start taking action, you become aware of those unknown unknowns. The unknown unknowns become known unknowns. How can you plan and iterate and make that productive time given that things necessarily change once the action starts? I think this is a very important thing that you should never think that your plan is going to hold up, you know, like one to one, that, hey, now I have my plan. Now I just need to implement my plan. It's just not the way life works. Like you say, things always turn out in a different way than we imagine. Then things always change, you know, that's the nature of time, change. But that doesn't mean that planning is not a good idea because you are better prepared to deal with the changes that you will encounter if you have a plan and if you thought things through. that's also very clear. And you need to be prepared to think on your feet, so to speak, when things turn out to be different. Did you have any experience building schools

before you undertook your big project in Nepal? No, I didn't. And actually, I didn't think much about what we did at that time. This was my first big project. And I didn't even think, I mean, I was very happy that it was so obviously successful because, you know, donors from all over the world, queued up and wanted to be in on it. So fundraising was not a problem because all these development organizations,

including the World Bank, by the way, but also individual countries, would pile in and say, hey, we would like to help finance this because we can see this is going really well. So it proved to go really well right from the outset. And I was happy about that, but I thought this was business as usual.

At that time, I hadn't studied projects systematically, you know, as a professor, which I started doing a business. later. And then I found out, wow, this is actually unusual what we did in Nepal. Now, let me find out, were we just lucky or was it because of the way we did it? And I found that it was because of the way we did it, because we actually modularized the classroom. So we thought about the schools as the Legos that could be built, you know, just clicking classrooms together, basically.

This is the secret to the success of that project, which is like today is even being used as an exemplar by the Bill and Melinda Gates Foundation for how to do education in order to get girls to attend schools. So one of the purposes was to get schools out in the villages so that you could get girls to go to school, which turns out to be one of the most important things you can do for society if you want to increase health and wealth. You need to get girls educated and starts with basic and primary education, which is the kind of schools that we build in the palm. How are you able to avoid graft? other kinds of personnel issues.

So as I understand it, there was grafts, but not serious, like minor stuff. So I kept in contact with the people who delivered the project, the schools on the ground, you know, once this got going, this took many years, of course. And by that time, I was back in Denmark, but I kept in touch. And there was some graft, but it wasn't like something that could bog down the project. It was like understood that this couldn't sort of get excessive to a degree where it would, derailed the project. So it was always manageable. Was there like a budget for that, basically?

There's a little bit of that. These are things that are very hard to talk about, you know, that there's, and even in, you know, the least corrupt societies in the world, corruption is the most corrupt sector of the economy, and there is corruption. So anybody who says their society is non-corrupt, don't know what they're talking about. Right. Even for the least corrupt countries in the world. And it's quite common that they're, you know, for instance, in construction that people steal from construction sites. Now, of course, you could lock up everything so nobody could steal, including in Nepal, but actually it was decided not to do that.

It was decided to allow a certain amount of things disappearing from construction sites. But it was also made understood that this has to be limited, you know, because otherwise we're going to have to lock up everything. So, you know, you find a balance. And this is also a characteristic of good project management and good project leadership, is that the leaders figure out ways around obstacles like that. Was the language barrier an issue? In Nepal?

Not for me, the people that I was dealing with in the part of the project. So I was the planner and programmer of the project. I planned and programmed the project. I wasn't out in the village on the ground, building schools, just to be clear about what the divisional work was. So the people that I dealt with, I did get around the country, of course, and see all the different places that the schools were going to be built

and so on. and study what it would take in order to make schools succeed in Nepal. But everybody that I spoke with spoke good English. I mean, nobody spoke Danish, which is my language. But both the Nepalese spoke Nepalese and English and the Danish and the Danish spoke Danish and English. So we could speak together in English. Right.

Given how mountainous the terrain is and how prone it is to landslides, heavy monsoon rains, other kinds of natural disasters, By the way, the reason I'm asked, I'm Nepali, which is the reason that this is particularly interesting to me. Okay. I love Nepal. I have to say, this is the only country I worked in where I lived on the plane. I was crying. Yeah.

When I flew out of Kathmandu, I was crying because I so enjoyed my time there, you know. Yeah. It's a beautiful place. It's a magic place. It is. But anyways, talking about landslides and slopes, you're the only person who's ever raised this issue, you know, when I talk about this project. So I'm really pleased. And I probably, if I had to point to one thing that I did in my life that mattered the most,

it was that one thing we haven't talked about, we actually decided to earthquake proof the schools. And this is 20,000 schools. And actually, you know this as a Nepalese, earthquake proofing is not part of the tradition in Nepal. The roof will fall down on the head of the children in a conventional school before these schools. But it's actually quite cheap to earthquake proof. if you think it into the building from the beginning. So we decided that the Danish architect and myself who actually designed these classrooms,

we decided we're going to earthquake prove them. A few years later, there was this huge earthquake. I think it was 2015, right? Where 9,000 plus people were killed. And I can tell you on that day, I felt both devastated for the people of Nepal, but also elated. Yes, anybody who were in our schools

would not have been killed, you know, from the roof caving down on them, because we earthquake-proof the schools. That was just such a good feeling. How were you able to test that earthquake-proofing in advance to know that it would work in a place like that? With terrain like that, with the tectonic plates being what they are? I mean, that's...

So earthquake-proofing is not as complicated as most people think. It doesn't mean that if you have the wildest movement of tectonic plates, of course, nothing is earthquake-proof. But it means that you will protect against maybe, you know, 90% or more of the damage. And one of the things that you need to do is simply make sure that the roof can come loose from the wall. So the beams of the roof and the beams of the wall, you basically make sure that they

are tied together in a very strong way. So it'll take a lot to snap from each other. That means if the building goes down, it goes down like it's sort of sliding to the side, but the roof will still be on and nobody will be squashed. On a building where this hasn't happened, the post, will be moving in different directions and the roof will fall down flat, you know, more or less on the people inside the building. And that's what's dangerous.

That's what kills people. So it's not that difficult. And that's why I'm also saying that it's quite cheap to do. It's not like rocket science to earthquake buildings. There's a lot of earthquake proofing that happens in California and the buildings there. And those people always talk about how that adds so heavily to the cost of projects. Is that due to permitting? Is it due to bureaucracy?

Is that a technical reason? No, no, no. The buildings in California are completely different from the buildings, the schools we were building in Nepal. So this is much more simple buildings in Nepal, right? And once you get, like, huge buildings, like skyscrapers or, like, you know, big shopping centers that are multiple floors and where you have cinemas and restaurants and everything inside them, it's a completely different ballgame. That's much more expensive. That's much more complex. So those two things cannot be compared.

I see what you're saying. So part of the success in Nepal was, as you said in the beginning, simplicity as well as modularity. Yeah. And talking about, you know, the steepness, actually the main variable that we took into account in deciding the three different types of classrooms and schools was the slope of the mountain. So you had fairly flat, you had steep and extremely steep. Those were the three different slopes that we took into account. And the steeper the slope, the more narrow the school had to be. to fit in on the side of the mountain, right? Right. So did you have templates then for each?

Yeah. Yeah, yeah. We had tempers. We designed tempest right up front. Interesting. All right. So I'm thinking about then pulling this back again, takeaways for the audience. We've talked about templating, modularity.

Anytime you're undertaking a complex project, try to make it as templated and as formulaic as possible. If you know that you're a beginner, work with somebody who's more experienced, do a lot of planning up front, even if you think that you're spending too much time planning, that's probably a good thing. You want to err on the side of overplanning, knowing that it's much cheaper to solve things in the planning phase. And beware of overconfidence bias. Are there any other major takeaways that the audience should walk away with? One thing that I like to remind people, and I think it's, I'm really serious when I say that I want people to keep it in mind, including my students, when I teach my students,

is that you are your own biggest risk. People always think about risk as something coming from the outside, and it's wrong. Again, this is something that is very well documented in psychology is that the problem is not the objective risk from the outside, which is there.

I mean, I'm not denying that, but it's the way we misperceive risk. That's the real problem. And that's why I say, your biggest risk is you. That's the most important thing to remember. And once you have that inside, you know, you can deal with it.

And when you say the biggest risk is you, do you mean in terms of cognitive biases, availability heuristic, overconfidence, all of the ways in which we make poor decisions? Yes. All the things that are tripping us up, you know, that's what I mean. It's this thing about jumping, this bias for not thinking things through and run with the first solution and the first idea that we come up with. That's the risky thing here. So that is in the sense that your biggest risk is you. Well, thank you so much.

where can people find you if they want to hear more of your ideas? So I'm on LinkedIn and I'm on Twitter. And whenever I do something new, I will post it there. So anybody who wants to keep up or get in touch, you know, they can do it there. Thank you, Dr. Flubia. What are three key takeaways that we got from this conversation? Number one, the more unique or customized a particular project is, the more likely it is that it will take longer and cost more.

projects for which there is a degree of modularity, for which there is a template, tend to be the most efficient. Some projects are just really difficult to do, super complex, and they're bespoke there, especially the design for the situation. And they're the ones that go wrong. Some projects are really easy to do because they're standardized. I talk a lot about modularity in the book. That's just a clunky way to say that things can be built like Legos,

you know, the toy Legos, where you have one building block. and you put it on the other. And that's basically how the schools in Nepal were built, you know, were as Lego. So we designed just two or three different types of classroom. Now this isn't to say that everything should be cookie cutter, but it does mean that if the fundamental building blocks have some degree of consistency, the inputs of time, money, and effort become far more predictable. So that is the first key takeaway number two.

We want to be efficient at projects that we may only do once or twice in our lifetimes, like a kitchen remodel. We want it to go well, particularly because a project like that is very expensive, but we don't have the luxury of having a learning curve that we've been through in the past. We don't have the luxury of having been through this 10 times before. And so in order to be efficient, we must first admit that we are novices and then work with experienced people to refine the right questions. Because it's through the refining of questions that we unlock not product but process. We are novices when we start doing something like that. So the first thing is to actually acknowledge that you are a novice, that you don't know what it is that you're going to be doing. So you need to do a lot of thinking.

You need to work with professionals who have done this before. So you need to find somebody who actually has a track record of successfully delivering the kind of kitchen renovation or house renovation that it is that you want to do. And then you need to sit down with them and really talk it through. What is it that you want to do? Why do you want to do it? What are your reasons? What is it that you want to achieve, we call that thinking from right to lift, that you actually start trying to visualize the end product. Like, what is it?

What is your home going to look like once it's finished? And also, what is it that you want to achieve with what you have done? Do you want to entertain more people in your home? Or is it just for the family? And so on and so on. What kind of budget do you have? And then you start with the end product in mind. Then you work backwards.

Then you work backwards through the process that is going to take you to that product. And you do it with experienced people. So work with experienced people. ask them to help you ask the right questions and ask them to help you start with the end in mind and also learn from how long things have taken them and how much money things have cost them because if people who are already experienced

say wow it took X amount of time and Y amount of money it's foolish to assume that particularly as a novice you will be able to do it more quickly or at a lower price point. So that is the second key takeaway. Finally, key takeaway number three, in order to execute a project efficiently, we need to overcome many of our cognitive biases,

including our bias towards action and our bias towards running with the first idea that we get. One of our cognitive biases is a bias towards action and a bias towards not thinking, which is identical. It's called availability bias. We'll just run with the first idea that we get. It's very well documented. It's not something I'm thinking up.

It's something that is very well documented with psychologists. And thinking slow is the antidote to that, you know, is to not run with the first thought that you get to actually sit down and think slow in order to think through what it is that you're doing. And that takes effort. It doesn't come naturally to us. you know, we studied the people who are successful and we find that this is what they're doing. So we, it's very easy to study failure because there's so many failures in big projects.

But we've also made a real point of studying the small percentage, actually a fraction of projects that are really successful and find out what is it that the people do that are successful. Are they just lucky or do they actually have a method that they follow? And it's the latter. They actually do have a method. It doesn't mean that luck doesn't play a role. it does, but for the people who are able to replicate success over and over and over again, as we show in the book with examples as different as movies and buildings, fancy architecture,

this is what they do. They actually, the successful people sit down, they deliberate, they simulate actually. They try to build the thing. So architects built their buildings on computers before they built them in reality so that they can simulate everything that could go wrong with the building. before they go out on the ground. He shares the example of Pixar, which iterates on paper over and over and over in their storyboarding.

They iterate in deep detail before they ever start shooting. Pixar does the same. They simulate their movies. They iterate. They go over and over again. They go through what the movie is going to be like from just a very vague idea of something until it's in deep detail on storyboards

and lots of images that have been generally. And only then do they start shooting when they know exactly what it is that they're going to shoot for their next animation movie. So those are three key takeaways from this conversation with Dr. Bent Flubia. Thank you so much for tuning in. If you enjoyed today's episode, please share it with a friend. That's the single most important thing you can do to spread these ideas. You can subscribe to the show notes. That's one of the easiest ways to share episodes as well as to jump to timestamps and get synopsies.

you can do that at afford anything.com slash show notes. Thank you so much for being part of this community, and happy 12-year anniversary to afford anything and to all of you who are part of the Afford- Anything community. Speaking of which, if you want to hang out with other members of this community, afford-anything.com slash community is the place to do it. If you enjoyed today's episode, please leave us a review in your favorite podcast playing app. and while you're there, make sure that you hit the follow button so that you don't miss any of our amazing upcoming episodes.

Thanks again for being part of this amazing ride. My name is Paula Pant. This is the Afford Anything podcast, and I will catch you in the next episode.