The Weekly Reflektion 48/2025

At our breakfast seminar in March 2019 we talked about the project cost of the Scottish Parliament from GBP 40 million to over GBP 400 million. For anyone following the Forrnebubanen project cost there will likely be a similar escalation. Ambition is laudable, but disciplined realism will help ensure success..

How do you encourage your teams to be cautiously ambitious?

The Sydney Opera House stands today as one of the most iconic buildings in the world, yet its construction story is equally iconic for a different reason. It has become a textbook case of optimism bias in major projects. Originally projected to cost $7 million (AUD) and take four years to complete, the project ultimately spanned fourteen years and cost more than $100 million. This dramatic divergence between intention and outcome offers lessons for any team undertaking complex initiatives.

At the heart of the Sydney Opera House overrun was a deeply rooted belief that the project would unfold under ideal conditions. This belief coloured the assumptions of government sponsors, architects, engineers, and contractors. Instead of basing plans on realistic assessments of risk and uncertainty, the team relied on best-case scenarios. They believed the innovative design could be executed with emerging technologies that did not yet fully exist, and that engineering challenges would be solved easily. They were confident that stakeholder alignment would remain strong throughout the build. These assumptions were very optimistic and not irrational, but they were insufficiently scrutinised. 

One of the most important lessons to draw from this case is the need to separate aspiration from estimation. Ambition should inspire project direction, but estimates should be grounded in evidence, comparative data, and contingency planning. Teams should be wary when estimates cluster around optimistic values without adequate justification. Independent reviews, and benchmarking against similar projects can help counterbalance internal enthusiasm.

A second lesson is the necessity of thorough risk analysis. In the Sydney Opera House project, many technical risks were either unknown or unacknowledged. A rigorous risk register, continuously updated, helps teams identify early warning signs and build adaptive capacity. Risk analysis must also include “unknown unknowns”, categories of uncertainty that require generous contingency allowances rather than specific predictions.

Teams must also be cautious of political and organisational pressures that encourage favourable forecasts. In large public projects, sponsors may prefer optimistic cost and schedule estimates to gain approval. This creates an environment where realism can be perceived as negativity. The Sydney Opera House case illustrates the danger of this dynamic where key decision-makers accepted unrealistic projections because they aligned with preferred narratives. Encouraging a culture where candid assessment is rewarded rather than penalised is essential. As we often advocate, get some outsides eyes to take a look. 

The Opera House proceeded to construction before the design was fully resolved, which locked the team into constant rework, and managing the risks associated with the changes. Modern teams should avoid committing to fixed assumptions too early.

Finally, transparency and communication are vital antidotes to optimism bias. Teams must create mechanisms that allow dissent, solicit diverse viewpoints, and expose flawed assumptions. When individuals feel safe raising concerns, overly optimistic projections are more likely to be corrected early.

The Sydney Opera House ultimately succeeded as a cultural masterpiece, but it succeeded despite the optimism that shaped its planning, not because of it.