Nordic Forum on Leadership of Major Projects Chalmers University

23-24 November 2011

Megaprojects:

Learning from the Dongtan Ecocity Project

Andrew Davies Imperial College Business School

Overview of presentation

1.  Background and introduction to Dongtan ecocity project

2.  Research methods and conceptual framework

3.  Case study: renew, reuse and reinforce

4.  Discussion and conclusion

Overview of presentation

1.  Background and introduction to Dongtan ecocity project

2.  Research methods and conceptual framework

3.  Case study: renew, reuse and reinforce

4.  Discussion and conclusion

My research on megaprojects – infrastructure over $1bn

•  London Heathrow Terminal 5 •  BAA and Laing O’Rourke

•  Dongtan ecocity project •  Arup and Shanghai Industrial Investment Corporation

•  London Olympics 2012 project •  Olympic Delivery Authority and CLM (delivery partner)

•  Crossrail project •  Crossrail Limited (CRL), wholly owned subsidiary of Transport for

London

Rapid Chinese urbanisation

•  China’s “urban” population is expected to reach over 1bn people by 2050

•  600m people are expected move from rural to urban areas between now and 2050

•  Chinese Government plans to build 50m new cities by 2020

Challenge: Climate change and Chinese cities

•  “China is searching for novel ways to expand urban areas while conserving natural resources”, Science, 2008

•  “China’s current development is ecologically unsustainable, and the damage will not be reversible once higher GDP has been achieved”, Zhenhua Xie, Minister of State Environmental Protection Agency

Response to these challenges: ecocity experiments

•  Ecocity - radically new design of carbon neutral city •  Carbon emissions offset by carbon absorption •  Promote sustainable and low carbon living •  Less use of fossil fuels (coal, oil and gas) •  Adapt to climate change

•  Renewable resources – sun, wind, biomass, recycling, etc •  Changing behaviour

•  New build and retrofit projects •  Design, build, integrate and operate complex mix of systems

•  Pioneering new build projects •  Masdar in Abu Dhabi •  Dongtan in China

Masdar – Abu Dhabi, United Arab Emirates Designed by Fosters & Partners

Dongtan – near Shanghai, China Designed by Arup

Arup

•  Global professional services: •  consulting engineers, designers, planners, and project managers •  HQ: London

•  Project-based: •  over 10,000 staff working on 10,000 projects globally •  Global reputation for projects in the built environment: buildings,

infrastructure, sport, utilities, urban development, etc.

•  Examples of major projects: •  Sydney Opera House (engineering) •  Oresund Bridge •  Beijing National Stadium (Birds Nest) •  Dongtan Ecocity (Arup Integrated Urbanism – master planning)

Dongtan – a vision of the urban low carbon future New city with half million people ‘one of the biggest and most ambitious business projects ever undertaken’, Observer 8 January 2006

"Dongtan was a rare chance to demonstrate that growth could happen a different way.” Lead planner Alejandro Gutierrez, Arup, Wired 2007

“This city will become a showpiece for the rest of the world. With London set to grow so much, the methods we use in Dongtan will become extremely relevant to London.” Peter Head, Dongtan Project Director, Arup 2007

Connected to Shanghai by bridge, tunnel & subway system

Dongtan ecocity – key objectives and features

•  Project stakeholders

•  Client: Shanghai Industrial Investment Corporation (SIIC)

•  Consultant masterplanner: Arup (UK design consultancy)

•  Project goals:

•  Sustainable ‘demonstrator city’ – cutting carbon emissions shapes urban design

•  45 min travel time to central Shanghai •  Population 500,000 in 2050 •  Site: 84 square km •  3 distinct villages amid parkland and

canals •  Population density similar to London

A strategic project for China and the UK

•  November 2005 – Arup sign MoU with President Hu Jin Tao & PM Tony Blair

•  April 2007 – Deputy PM John Prescott visits Dongtan site

•  September 2007 – Arup, HSBC present to PM Gordon Brown and China Task Force

•  SIIC, Arup, HSBC, Tongji University sign MoU – PM Gordon Brown & Shanghai Mayor Han Zheng

Key milestones of the Dongtan project

•  Arup hired by McKinsey to work on the bird sanctuary

•  At the time, SIIC was asking 3 global masterplanning firms for ideas:

•  Philip Johnson (US) •  Atkins (UK) •  Architecture Studio (France)

•  3 ideas shortlisted in 2004

•  but 4 years after the original Dongtan idea, SIIC decided none of the ideas were feasible

•  January-August – Arup team prepare clear & detailed scope of work for Dongtan design

•  August – SIIC appoints Arup to develop the Dongtan Masterplan

•  October – Arup presents Dongtan design and client requests 100% local renewable energy sources from start

•  November - Arup signs contract with SIIC work on 3 other ecocity projects in China

•  December – Arup issues 1st ‘Design Report for the Start-Up Area’

•  August – SIIC approves Arup’s masterplan (project delivered in 13 months)

•  September – Arup issues ‘Control Plan for Start-Up Area’. Final masterplan & main planning application document

•  December – Arup issues ‘Sustainability Guidelines’ – objectives, indicators and requirements for buildings, infrastructure & public space

•  January – Arup deliver final documents delivered to SIIC. Project ready to move to ‘construction’ phase

•  April – Arup’s co-located project in SIIC premises is closed and team members move back to Arup Shanghai office

2004 2005 2006 2007

Dontang masterplan deliverables

•  Masterplan documents delivered in January 2007 •  1. Implementation plan •  2. Design & sustainability guidelines

•  Documents address •  Procurement, delivery and financing model •  Performance specification for design, construction and operation

of ecocity over 30 years

•  Design phase completed and the project is ready for construction phase

Outcome of Arup’s design project

•  Project delivered 3 months early

•  Design meets request for “close” to 100% zero carbon solution •  Large wind farm generates green electricity •  Power utility burning rice husks (locally produced food) •  Solar power •  Walking biking city with zero emission vehicles – hydrogen & electric •  Buildings 4-8 stories tall to improve density and minimise sprawl •  Only 10% waste ends up in landfill

•  Uses proven technology to reduce risks •  Innovation lies in the integration of technology and environment, cultural and

social components

•  ‘Dongtan is not a rigid blueprint for a city for the future’…other projects must be guided by unique local environment (Peter Head, Arup)

Dongtan site – October 2007 – still a wetland

Overview of presentation

1.  Background and introduction to Dongtan ecocity project

2.  Research methods and conceptual framework

3.  Case study: renew, reuse and reinforce

4.  Discussion and conclusion

Research motivation: managing innovation in projects

•  New performance requirements for cities: zero-carbon and sustainability objectives – ecocity experiments

•  Initiated by ‘vanguard projects’ (Brady & Davies, 2004)

Research questions: •  How is knowledge created and

combined in a vanguard project shaping a new market?

•  How is knowledge transferred from a vanguard project to the next project?

Market base

new

new

Technology base

New projects

New projects

•  Business as usual

•  Traditional project capabilities

existing

existing

Davies & Hobday, The Business of Projects, Cambridge University Press, (2005)

Capability developed through innovative projects

•  A capability is knowledge, skills and experience to perform a set of specialised industrial activities •  “…the discovery and estimation of future wants, to research, development

and design, to the execution and co-ordination of processes of physical transformation, the marketing of goods and so on. (Richardson 1972)”

•  Capabilities are developed through integration and transfer of knowledge (Grant 1996)

•  Yet, we know relatively little about how this happens as a process in terms of:

•  The role of key individuals in vanguard and future projects •  Mechanisms for creating knowledge creation and transfer •  The wider role of leadership and championing project ideas in the

market

Research design and methods

•  Research based on a case study – theory building •  World’s first ecocity design – rare case (Siggelkow, 2007)

•  Process study – January 2007 to June 2010 •  Over 60 interviews: people involved in Dongtan: Arup, SIIC, Chongming Island

local authorities, SDCL (Sustainable Capital investor), HSBC bank •  3 visits to Dongtan site •  Visited and experienced the Shanghai project office and client office •  Primary source documents (internal presentations, reports, diagrams and

material for project bid and external public documents) •  2 workshops in China and UK •  Non-participant observation in Arup office - London and Shanghai; Dongtan

Project office in Shanghai

Our conceptual model of capability development: renewal, reuse & reinforcement

Renew

Incremental/radical innovation

Reuse

Tacit/Explicit knowledge

Reinforce

Internal/external to organization

Overview of presentation

1.  Background and introduction to Dongtan ecocity project

2.  Research methods and conceptual framework

3.  Case study: renew, reuse and reinforce

4.  Discussion and conclusion

Renewal: Dongtan as a vanguard project Arup’s experience in experimenting, creating and participating in game-changing projects

‘Dongtan is the next Sidney Opera house for Arup in terms of importance’

B. Morera, Urban designer, Arup, 2008

‘Normally we would never do a project like Dongtan – it is too risky and too big. However, this was a rare opportunity for us to show leadership and learn…. Taking on large projects is the way we learn in this business of projects’ John Miles, Arup Board, 2009

Renewal: Innovation in urban design projects

•  ‘Renew capabilities’ – develop capabilities in new categories of projects (Brady & Davies, 2004; Shamsie et al, 2009)

•  Challenge: create innovative approach to deliver Dongtan project •  Learning from Arup’s previous projects (e.g. BedZed low carbon

development)

•  New concept of multi-functional project team called ‘total serial innovation’ (Peter Head, Arup) •  Vision: ‘Integrated Urbanism’ project team led by architects •  30 specialists each with a team of 3-4 members in matrix structure •  New position: “Cultural Planner” •  Developed new technical and conceptual tools on the project to support

integrated urban design

Renewal: creating the Dongtan project team

•  Dongtan project •  Team selection: two people knew each other from LSE connection •  Encouraged to experiment with new approach to meet strong client

needs •  Core team of 5 builds (six months) up to 150 specialists in less than one

year (mainly in-house) •  New approach supported by Peter Head, Director Planning and

Integrated Urbanism •  Arup lead the project and work with local design institutes and

consultancies to deliver work-packages

•  The project was risky for Arup •  Foreign architects can lose control of their Chinese projects when clients

seek to cut costs and redesign using cheaper options •  Was the client really committed? •  Arup carried out internal audit of the project

Arup’s challenge: How to integrate multiple specialist with component-knowledge to achieve sustainable performance? •  Human and Environmental Health

•  Economic Vitality and Individual Prosperity

•  Energy

•  Housing

•  Nutrition and Urban-Rural Linkages

•  Mobility and Access

•  Communications

•  Education and Culture

•  Governance and Civic Engagement

•  Water

Systemically

interconnected components

Change one and one

or more other components must

change

Targets: sustainable performance during ‘operational’ phase

Arup’s solution to integration challenge: matrix project structure •  ‘There is key temporal dimension to the work as well as

interdisciplinary complexity. Sometimes the work in any cell of the matrix was led by the cross-cutting team and sometimes by the physical component team’ •  Peter Head, 2007 Hugh Ford Lecture

•  Matrix structure for integrating multiple technology and organisational components of the design •  Teams develop their own model (e.g. transport, waste,

environmental impact) •  Project members assigned to 12 offices within Arup •  Design and integration led by architects •  Focus meeting performance objectives – guidelines of

sustainability

Traditional approach to masterplanning

Traditional linear process

Client BC REC MP ENG

Business Consultant

Real Estate Consultant

Master Planner Engineer

‘We couldn’t do it in a simple linear way. It would take four years to achieve an outcome. We had to develop a new approach’ (Guiterrez, Interview, 2008)

Arup created a new process: non-linear design

‘We did what normally takes four years in one year’ (Guiterrez, Interview, 2008)

BC Business

Consultant

Real Estate Consultant

Master Planner

Engineer

Arup

ENG

MP

REC

Tools for integrated urban design

Reuse: organisational change & routines

•  ‘Reuse capabiliities’ – knowledge, tools and processes transferred to next projects

•  From outset Arup aims to transfer knowledge and develop replicable capabilities on subsequent (ecocity) projects •  Wanghuang, Changxiing, Tangye •  Partnership with SIIC and others on additional ecocity projects in China –

client wants to take one systems integrator role •  Partnership with HSBC

•  New unit in Arup: Integrated Urbanism (Spring 2009, 75 employees) •  Group ‘born out of Dongtan’ (Guiterrez, 2008, interview) •  Transfer of core Dongtan project members •  Mentoring on new projects •  Refinement of project tools – IRM and SPEAR •  Create new tool: Integrated Methodology – sequence of design processes

Arup’s new approach: ‘Integrated Urbanism’

Source: ‘Making Places in the Ecological Age’, Arup Urban Design

Reinforcement: market position & internal positioning

•  ‘Reinforce position in the market’ •  Strategic role of senior Arup people in promoting the project

internally and externally

•  Creating and shaping a new market •  Role of charismatic project members: Peter Head, Alejandro Guiterrez

and Malcolm Smith •  Advance the concept of ecocity at international conferences: e.g. Clinton

C40 •  Articles in major world publications: e.g. Wired, Newsweek, Financial

Times •  Collaboration with universities – e.g. EPSRC - Ecocit networks

www.ecocit.org •  Creation of Institutes for Sustainability – China and UK

•  Develop internal support for the Dongtan project and the strategic potential in sustainable integrated urban development

Overview of presentation

1.  Background and introduction to Dongtan ecocity project

2.  Research methods and conceptual framework

3.  Case study: renew, reuse and reinforce

4.  Discussion and conclusion

Discussion

•  Arup’s story is about entrepreneurial effort to build a business in sustainable urban design

•  Are the lessons learned from designing a green field ecocity transferable to retrofit – platform, principles - why and how?

•  Are businesses the key agents of change towards sustainability?

•  Are efforts to gain competitive advantage in sustainable markets different from business-as-usual activities?

Climate change and urbanisation: the need for innovation!

•  Innovation...is critical for the long-term conservation of resources and improvement of the environment (C. Freeman, 1982:4)

•  Climate change becomes a major “inducement” and “focusing device” for innovative efforts (N. Rosenberg, 2009)

•  Climate change is the management challenge of our time. It’s a disruptive innovation greater than much of what has been seen before. We need research that finds a “change setting” that addresses this kind of challenge and identifies underlying mechanisms of change involved in this discontinuity (R. Henderson, distinguished keynote, Technology and innovation management division, Academy of Management, 2009)

•  Making the change to sustainable business is inherently risky – like innovation processes. The early movers go through a learning process for all of us (Mohrman & Worley, 2010:289)

Conclusions: from practice to theory to practice

Model of capability development supports Arup’s growth in integrated urbanism May be applicable to other firms working in urban sustainability

Renew

Incremental/radical innovation

Reuse

Knowledge and routines

Reinforce

Internal/external

Thank you for listening Questions and comments are welcome