Contents
Carl von Clausewitz describes friction as the difference between war on paper and real war. Major projects know this difference well. Today the Elbphilharmonie is a landmark and a celebrated concert hall. But the history of its construction shows how friction builds up in a project with many parties when the plan is considered finished too early.
An idea on top of a warehouse
Situation
In 2001, the property developer Alexander Gérard comes up with the idea of placing a concert hall on top of the old Kaispeicher A warehouse in Hamburg’s harbor. The Basel architects Herzog & de Meuron design a glass structure to sit on top of it. First Mayor Ole von Beust announces the project in 2002. A 2005 feasibility study estimates net construction costs of €186 million, €77 million of them for the city. The opening is planned for 2010.
Link to the principle
At the start there is a compelling idea with a tight schedule and an optimistic budget. Hardly any reserves are planned for the unforeseen. So the buffer that friction will later eat up is missing.
Contract before plan
Situation
In 2006, a consortium of the construction group Hochtief and Commerzbank wins the tender with a bid of €241.3 million. At this point the planning is not yet far enough along. The architects do the planning, Hochtief does the building, and the city’s project company ReGe stands between them as the client. The foundation stone is laid on April 2, 2007.
Link to the principle
Three parties share responsibility for a plan that is not yet finished. Every change has to pass through several interfaces. Clausewitz describes how every single person in a large machine brings their own friction. Here it is every company and every authority.
Change orders and standstill
Situation
As early as 2008, a large change order drives costs up. According to calculations by the Hertie School, the agreed total costs then come to around €561 million. In October 2011, Hochtief halts parts of the work. The dispute is about planning and structural engineering, including the roof. Only at the end of May 2012, after the city threatens to terminate the contract, does Hochtief agree to continue building.
Link to the principle
Here friction shows up as a chain: unfinished plans lead to changes, changes to change orders, change orders to disputes, disputes to standstill. Each link can be explained on its own. Together they cost years.
The reorganization
Situation
In December 2012, the city and Hochtief agree on a fixed price of €575 million net and guaranteed completion by October 31, 2016. Hochtief thus takes on more responsibility for planning and construction. In April 2013, Mayor Olaf Scholz puts the cost to taxpayers at €789 million, and in June 2013 the city parliament, the Bürgerschaft, approves it.
Link to the principle
The reorganization reduces friction by bundling responsibilities. Fewer interfaces mean fewer places where problems can get stuck. That is one of the few effective responses to friction: making processes simpler.
Opening and final tally
Situation
The building is handed over on October 31, 2016. On January 11, 2017, the Grand Hall opens with the NDR Elbphilharmonie Orchestra. The city’s Senate puts the total cost at around €866 million, roughly 11 times the €77 million originally budgeted for the city. In April 2014, a parliamentary committee of inquiry concludes in a 640-page report that the planning was not far enough along at the time of the tender, that the project kept growing in its early phase and that the budgets were set too tight.
Link to the principle
Not everything was friction. A study by the Hertie School also points to excessive optimism, deliberately embellished cost estimates and a governance structure that overwhelmed the project company. But even honest planners would have needed reserves for such an intertwined project. Friction punishes above all plans that leave no room to maneuver.
Key takeaways
Key lessons
- Don’t start building until the planning holds up.
- Keep the number of interfaces as small as possible.
- Plan reserves of time and money explicitly.
- Bundle responsibility when disputes pile up at the interfaces.
- Distinguish honest friction from embellished figures.
Summary
The Elbphilharmonie became a magnificent concert hall, but seven years late and at many times the planned cost. Unfinished plans, three parties with shared responsibility, change orders and a construction halt reinforced one another. Only the reorganization in 2013 bundled the responsibilities. The project shows how friction grows in major projects and how hard it hits plans without reserves.
Sources
- Carl von Clausewitz: Vom Kriege (in German), Book I, Chapter 7. Berlin: Ferdinand Dümmler 1832.
