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Case of High-Speed Ground Transportation Systems

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Case of High-Speed Ground Transportation Systems MANAGING PROJECTS WITH STRONG TECHNOLOGICAL RUPTURE Case of High-Speed Ground Transportation Systems THESIS N° 2568 (2002) PRESENTED AT THE CIVIL ENGINEERING DEPARTMENT SWISS FEDERAL INSTITUTE OF TECHNOLOGY - LAUSANNE BY GUILLAUME DE TILIÈRE Civil Engineer, EPFL French nationality Approved by the proposition of the jury: Prof. F.L. Perret, thesis director Prof. M. Hirt, jury director Prof. D. Foray Prof. J.Ph. Deschamps Prof. M. Finger Prof. M. Bassand Lausanne, EPFL 2002 MANAGING PROJECTS WITH STRONG TECHNOLOGICAL RUPTURE Case of High-Speed Ground Transportation Systems THÈSE N° 2568 (2002) PRÉSENTÉE AU DÉPARTEMENT DE GÉNIE CIVIL ÉCOLE POLYTECHNIQUE FÉDÉRALE DE LAUSANNE PAR GUILLAUME DE TILIÈRE Ingénieur Génie-Civil diplômé EPFL de nationalité française acceptée sur proposition du jury : Prof. F.L. Perret, directeur de thèse Prof. M. Hirt, rapporteur Prof. D. Foray, corapporteur Prof. J.Ph. Deschamps, corapporteur Prof. M. Finger, corapporteur Prof. M. Bassand, corapporteur Document approuvé lors de l’examen oral le 19.04.2002 Abstract 2 ACKNOWLEDGEMENTS I would like to extend my deep gratitude to Prof. Francis-Luc Perret, my Supervisory Committee Chairman, as well as to Prof. Dominique Foray for their enthusiasm, encouragements and guidance. I also express my gratitude to the members of my Committee, Prof. Jean-Philippe Deschamps, Prof. Mathias Finger, Prof. Michel Bassand and Prof. Manfred Hirt for their comments and remarks. They have contributed to making this multidisciplinary approach more pertinent. I would also like to extend my gratitude to our Research Institute, the LEM, the support of which has been very helpful. Concerning the exchange program at ITS -Berkeley (2000-2001), I would like to acknowledge the support of the Swiss National Science Foundation. This experience has been important since it provided a very significant basis for this research, thanks to the case studies achieved at ITS-Berkeley. I acknowledge also Prof. Martin Wachs and Prof. William Garrison, who provided me guidance in this research on innovative transportation systems in the USA, as well as Prof. Robert Bea for his advises in risk management. Additionally, I would like to thank Dr. Michele Mossi and Monsieur Philippe Pot, in charge of the Swissmetro Project Management, for the interaction we had, as well as M. Rodolphe Nieth, inventor of the Project and Dr.Vincent Bourquin for the HISTAR R&D project. I acknowledge also those who contributed to commenting my research through the PhD seminars: “Management of Technology & Change”, of Prof. D. Teece & Prof. D. Mowery (Haas-School, Berkeley 2000), and “Managing Organization”, of Prof. A. Bergmann and Prof. G. Cestre (HEC-Lausanne 2000 & 2001). Finally, much gratitude is owed to my wife Beatrice, who supported me all along this work, as well as to my parents and family, especially Monsieur Christian Faessler, for the review of this document. Lausanne, February 28, 2002 Guillaume de Tilière EPFL / ILEMT Abstract 3 EXECUTIVE SUMMARY Managing the launch of new technological trajectories is a complex task, especially in the case of High- Speed Ground Transportation (HSGT) Systems. For instance, Maglev systems are now developed since 40 years, and none of these technologies has been implemented until the first Transrapid contract for Shanghai (which could lead to a 1250 km track between Beijing and Shanghai). What are the future challenges for cutting-edge technologies such as Swissmetro or the Japanese MLX- 01? Behind such a question stands the problem of managing technological rupture. This brings us beyond the engineering field since it implies leading change and innovation through organizations, institutions and policy. HSGT innovations with strong technological rupture are complex to manage, involving industry, operators, institutions and politicians. The structure of public/private investments and the long lead-life of such projects (much longer than many industrial ones) require from decision-makers a good understanding of the management of complex systems. This presupposes a good technology assessment, in order to identify technological lock-ins, performances and benefits. However only assessing the intrinsic and extrinsic projects’ value without the ability to introduce change wouldn’t be enough: The ability to lead changes in cultures, organizations, and processes is a determinant of the successful development and diffusion of such technologies. Therefore, the aim of this research is to examine the role of industry, operators and institutions in the implementation of innovative transportation networks and in the diffusion of innovations. Depending on the national context, experiences have been different depending on the countries. Innovative projects have sometimes been successful; other times they have failed, with millions of dollars wasted. Decision-making is a hard task, especially when it concerns R&D investments in projects that imply strong technological rupture. The assessment of risks and uncertainties is not an easy task, as decision-making unfolds in design, construction and operation phases. Therefore, the importance of integrating structural and organizational factors into the analysis seems to be necessary to provide pertinent recommendations for the management of such projects. For this purpose, this research provides a methodological approach with a view to understanding the impact of the technological rupture on project management, leading to a set of recommendations. Those ones are based on case studies, as well as the elaboration of Two HSGT Innovation Models, whose understanding is also enlightened by the development of several conceptual Models. The methodology can be described as follow: 1. Case studies: identification of critical factors of success/failure: - Related to the structure of the market and its evolution - Related to the notion of innovation and rupture 2. Elaboration of innovation models for HSGT technologies: - Modeling innovation processes : main existing models - Modeling diffusion processes of innovations, and decision-making - Elaboration of 2 HSGT innovation models - Putting into perspective the critical factors identified Guillaume de Tilière EPFL / ILEMT Abstract 4 3. Modeling the influence of institutional & organizational factors 4. Developing an approach centered on the notion of risk/opportunity - Defining a methodological approach in order to identify the risks related to the rupture - Identifying the impacts of the technological rupture on risks and uncertainties 5. Providing recommendations on project management Recommendations related to the critical factors underlined by the case studies and the conceptual models. This constitutes the important steps of this research, leading to a better understanding of innovation processes and how to manage them. The identification of critical factors in the management of such projects as well as recommendations are embodied in a Project Management Assessment Tool (PMAS), which is presented in annex. The originality of this research is to analyze, in a multi-perspective approach, innovation processes in the development of new technological trajectories characterized by strong technological rupture. The value of this research also resides in the international perspective of experiences through the case studies: This led to better take into account market and political contexts for recommendations on how to manage the rupture. This being said, this approach also provides a good basis for analyzing innovations in large technical systems in general, the nature of which go beyond private interests and are by nature dependent on public and political interests. Guillaume de Tilière EPFL / ILEMT Abstract 5 VERSION ABRÉGÉE Gérer le lancement d’une nouvelle trajectoire technologique est une tâche compliquée, surtout dans le cas des systèmes de transport terrestre à grande vitesse. C’est le cas des systèmes Maglev, maintenant développés depuis plus de 40 ans et dont la première implémentation commerciale à été signée en Chine pour la desserte de l’aéroport de Shanghai (avec comme objectif une possible ligne de 1250 km entre Pékin et Shanghai si le système fait ses preuves). Quels sont les défis pour des technologies avant-gardistes comme le Swissmetro ou le MLX-01 japonais ? Une telle question renvoie à la difficulté de gérer la rupture technologique : Une telle rupture dépasse le domaine de l’ingénierie puisqu’elle implique d’introduire le changement et l’innovation dans les organisations, les institutions et la politique. De tels projets d’innovation à forte rupture technologique sont d’une grande complexité à gérer, impliquant l’industrie, les opérateurs, les institutions et les politiques. La structure des investissements publics-privés et la longue durée de vie de tels projets (bien plus long que les projets industriels classiques) nécessitent de la part des décideurs une bonn e compréhension du management des systèmes complexes. Cela présuppose une bonne évaluation de la technologie, afin d’identifier les verrous technologiques et de marché, ainsi que ses performances et bénéfices. Cependant, l’évaluation intrinsèque ou extrinsèque du projet de rupture technologique sans prendre en compte la capacité de conduire le changement n’est pas suffisante : Introduire le changement dans les cultures, les organisations et les processus chez les acteurs clé est un élément déterminant pour la réussite du lancement et du développement de telles technologies. L’objectif de cette recherché est donc d’examiner le
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