Many projects fail to achieve their set objectives. This happens everywhere and on regular basis all around the world, on small as well as large projects. When this happens on exceptionally big projects, a project, in this case, is labelled as a “white elephant.”
The term comes from the Far East, where a white elephant is considered sacred and valuable, but its upkeep costs exceed its usefulness. Keeping a white elephant is certainly not a profitable business and this idea has moved on to the world of projects, in particular.
White elephants, in this context, are big projects that drain the budgets of their companies or countries but fail to achieve their chartered objectives. Some of these projects have actually been completed, without providing value compared to the amount of money and effort spent on them.
There are many examples out there of undisputed white elephants in the history of business. These include modern ones like the Millennium Dome in London, which has been completed, but does not yet seem to have a useful function. Another example is the Superconducting Super Collider, a large particle accelerator in Texas, which was cancelled half way through, after billions were spent on its construction. Earlier examples include the flying boat, or what is called the “Spruce Goose,” which was pioneered by Howard Hughes.
What is a white elephant and what is not is sometimes subjective and depends on the perspective of the person judging the project. For some, the Space Shuttle program is considered a white elephant as well as many new mega- construction projects, like the Kansai Airport in Japan. However, it is not easy to reach consensus on whether these projects provide value or not.
Averting the pitfall of building white elephants is tough. There are many subjective pressures including personal as well as environmental factors that usually contribute to the building of white elephants. On the personal side, wanting to leave a legacy and doing something different has pushed many persons throughout history to build white elephants. It is true we admire these tourist attractions or monuments, but in reality they are white elephants.
Another personal factor is the display of power. Many entities, including large corporations build white elephants to show strength and build image. These probably can pass as nonwhite elephants as building an image is, to some, a legitimate business as well as a personal goal that indirectly builds value. Some people may consider fancy decorations, marble stones and fountains at the entrance of major buildings in different world capitals a waste of money. However, to others, they are important symbols that help build the right image of trust, strength, and power
White elephants are sometimes built for political reasons. For example, governments may want to leave a legacy, showing their contribution to society through big structures.
To avoid falling into the trap of building white elephants, there are things that can be done business-wise. One is to spend enough time on feasibility studies and building a business case. Also, bringing in different parties with different interests and some independent ones to assess the feasibility of the project is considered important.
Even after feasibility studies, there are some project-management actions that one can take to catch a white elephant before too much funding is sunk into the project. At the beginning of every phase, project management best practices require validation of original assumptions, under which the project was undertaken, as well as an examination of the business need and the business case for the project. The risk of inaccuracies in the business case, feasibility studies, or assumptions made about the viability of the project should be taken into account.
February 9-10, 2007