Case Study Of The New Wembley Stadium Management Essay
The new Wembley stadium is a property of the English Football Association and is being managed by the subsidiary company of the FA, the Wembley National Stadium Limited. Wembley stadium was a project of high budget, with plenty of delays for several different reasons (which will be discussed below) and uncertainties from a lot of people for the success of the project during the construction time. Probably now, the project for the eyes of people it seems as an elegant construction and a reason that Britain must feel proud of it. Maybe this is true, but there is a lot of issues about the project’s management work, as the mistakes were enormous and caused a lot of cost and also a loss of profit during and after the finish. However, before the discussion of the certain project begins and the diagnosis of the question “Is the Wembley stadium success or failure?” it will be better if it be analysed what a project and a project management in theory means.
The PMBOK defines a project as a temporary effort commenced to create a unique product or service. By using the word “temporary” means that every project has a specific end. “Unique” means that the product or service will be different in some way from the other similar products or services that already exist.
Projects range in dimension, scope, cost and time. It can be a large project which costs millions of pounds to be created or a small project which can be finished within hours. There a lot of different types of projects such an IT project, a domestic project, a sports project etc. There are characteristic features which a project includes like a start and finish, a lifecycle, a budget and recourses. Each of these features is responsible for a unique part into the development and the finishing of the project. Every project in order to be successful must be managed from a person or a team which will take the decisions for everything that will happen and occurred before, during and after the completion of the project. This team is named as project management.
The PMBOK defines project management as “the application of knowledge, skills, tools and techniques to project activities in order to meet stakeholders’ needs and expectations from a project”.
As the definition above explains, the project manager is the only responsible and has to do whatever it takes to make the project happens in order to satisfy the stakeholders meets and expectations. To succeed that, the project manager must analyse the needs and expectations of the stakeholders in order to define the purpose and as well, the scope of work and objectives of the project. To accomplish the project manager his mission, the feasibility study must be used. The feasibility study is a method which the project manager set up a team with the purpose of acknowledging if the project is first of all feasible and second, to be sure that the company’s recourses will be used by the best way possible. As it is mentioned above, it is project manager’s responsibility to identify all the stakeholders and verify their needs and expectations. Project stakeholders are not necessary actively involved in the project but are also people or organisations whose interests probably impacted by the project being executed. Some of the stakeholders that needed to contribute their skills and knowledge to help the project manager are the sponsors, the sub-contractors, the originator, legal requirements etc. Except these, there other external stakeholders like environmentalists and regulatory authorities (health and safety) which maybe not involved with the project but they can influence the result. With the help of the feasibility study, the manager will be able to manage, influence and balance these expectations to guarantee project success.
It is not uncommon for projects to fail all the time. For a project to be considered as real success, there are three components to be evaluated. These components are the following:
The met of budget and schedule,
the expected results to be delivered,
the expected quality to be delivered
If at least one of these components does not meet the expectations at the finalisation of the project then the project can be considered as “failure”. Even though a project considered as failure it does not mean that it will not be profitable during the years as maybe will need to cover for some years the unexpected cost that occurred. Some of the main reasons which a project may fail are the poor management, poor communication, overruns of schedule and cost and ignoring project warning signs.
Evaluation of the Wembley Stadium Project
“It must be remembered that project management is first and foremost a philosophy of management, not an elaborate set of tools and techniques. It will only be as effective as the people who use it.” – Bryce’s Law
From the phrase above, everyone can understand how important is for a project, especially a project like Wembley’s, to be managed from experienced operators with the appropriate project management team. One of the biggest mistakes of the FA was that let the subsidiary company that has, the WNSL, to manage the project instead of hiring independent project managers with a lot of experience to handle the project. Because of that mistake, the first problem occurred at the very beginning when for two years (2000-2002) the operators could not agree with some of the stakeholders (Government) to the specifications of the project and the same time they had signed a construction company, the Australian Multiplex, to take care the construct without to consider that the cost would be increasing for every month that the construction did not start. The failure of WNSL to manage the project showed clearly on 2006 when the further delay announced. A number of the FA board had completely lost the confidence over the management of WNSL to manage correctly the construction company, Multiplex and pull pressure in order to finish the stadium the expected date. Another reason which had as a great impact to the board in order to lose their confidence over the management of the project was the incompetent to make true the visions of the FA board. These visions were to see the new Wembley hosting the 2005 World Athletics Championship, the 2006 World Cup and the 2012 Olympics. This is just a part of the evaluation as, in order the project to be evaluated correctly, there are criteria that will be analyzed and compared with the theory of project management to show if the project was succeeded or not at each element.
The time that is calculated and expected for a project to be completed is a very serious element, as except the cost that rises because of the delays, is also about the confidence that the project shows to the community.
The Wembley project supposed to start on 2000 and finish on 2003, but because of financial problems and disagreements over the stakeholders, the build started not earlier than the September of 2002. The second opening that announced was on 2006 and also the Wembley stadium selected to give hospitality to the FA Cup final. As many people feared, the stadium was not ready again and this time was because of several problems that Multiplex, the construction company that signed for the project, faced which will be discussed below. Finally the project had completed on 2007, four years after the first estimated opening. Because of the wrong timing that calculated from the executives a lot of events cancelled and the cost increased even more. Serious of income would be earned from the FA if it was not the delays.
Based on PMBOK, the meaning of budget at project management, it represents the official estimated amount which will be needed for the entire project to be completed or for a specific planned activity for the project. Budgets can be modified with certain approval during the development of the project, although is strongly preferred to follow the predetermined amount as the change will possibly affect other decisions that already being decided for the project.
For huge projects like the Wembley stadium, because of the high budget that was needed, it was very important the forecasting calculation for the project’s cost to be as much accurate as it can be. The Wembley project, at the part of creating the cost budget, the project management team’s forecast was dramatically wide off the mark but the misjudgement was not only their fault. On April 1998, the WNSL bought the old Wembley stadium for 120 million pounds. A year after, WNSL’s project management team estimated that the cost for the construction of a new Wembley stadium will be 332 million pounds. WNSL had already find the founders and they were the national lottery with the amount of 120 million pounds and the remaining agreed with banks to be financed but a lot of complaints of fans that did not want to see the legendary two towers to be destroyed and the order of review of the design of the project from the Culture Secretary, postpone the approval of the Government. On September 2001, when WNSL made the deal with the Australian construction company, Multiplex, they sign to build the new stadium for a fixed-price 332 million pounds as the executives for the project estimated that only this amount was still needed. Considering the contact deal of WNSL with Multiplex and another four key test that the Culture Secretary made, promised to give the project to the Government, only if FA could guaranteed the agreement that made with Multiplex, something that FA did without hesitation. On May 2002, a decision from the government was not given to WNSL. That was the disaster of the project as because of that long delay the costs for the project had raised to 757 million pounds, almost double from the estimated amount. The same month, the government gave the green light to the WNSL but the funds were not enough. After a lot of disapprovals from the English banks, finally the FA signed a loan agreement with a German bank named WestLB in order the work at the new stadium to finally start. Finally, the project was finished on 2007. The cost problems did not stop with the completion of the new stadium, as five months after the opening of the stadium the operating costs are 50 per cent over-budget, with other words the executives of WNSL undervalued the operating cost by 12 million pounds per year.
Quality and Total Quality Management
“In terms of project management, the concept of quality refers specifically to the degree or amount toward which an inherent or embedded number of traits fulfils a number of predetermined requirements that have been deemed necessary.”
“TQM is a project management technique or strategy that is implemented to assure that an awareness of quality is embedded in all phases of the project from conception to completion.”
(Quality and TQM as were defined in the 3rd and 4th edition of the PMBOK)
There are a lot of views that must been analysed in sequence to be someone in a position to judge the TQM of a project. For the Wembley project, there are plenty of indications which show the lack of the project’s quality from the very beginning to the end and even until now.
At first, the quality of the project management team will be analysed. The first facts of low quality had been shown from the very beginning, when WNSL without knowing the real cost of the project and they did not even found founders, they sign a contract with a construction company with a deal of a maximum cost for the project to be 332 million pounds. At the completion of the stadium, as it mentioned above, was 757 million pounds. The next wrong forecast of the executives was the operation costs of the stadium which had calculated to be the half amount which is now. From these paradigms, it is clear that the WNSL did not use the higher standard and appropriate logistics in order to configure and organise a huge project like the Wembley stadium.
The next analysis will be on one of the most important stakeholder of the project, the construction company named Multiplex. The criteria that WNSL chose the certain company for the construction of the stadium was because of the experience that it had of building other stadiums before and that they agreed to not let the cost of then construction to be more than 332 million pounds. The following facts show that Multiplex has not such a great experience of building stadiums as the WNSL had acknowledged and expected. The first incident which shows the low quality on the construction work of Multiplex was on January, 2004 when scaffolding collapsed at the building area and one construction worker injured and another one crushed and died. Another incident which Multiplex announced on January 2006 and blamed that mistake as the reason which the stadium was not ready on time, was that they used the wrong type of concrete in the foundations of the stadium. The same year another unpleasant incident happened. The happening was the slip of a 30 metre roof beam on March, 20 which had as result the evacuation of three thousand workers from the construction site.
After the facts of showing how inexperienced is Multiplex as a construction company, they will be followed some other facts which show how unorganised the same company is as for controlling its employees. The first clue happened on August, 2004 when the building workers made a strike about the working hours and breaks. The most surprising incident was on February, 2006 when an English newspaper, “The Sun”, claimed that dozens of construction workers were using different drugs and alcohol during the work time.
The final analysis will be for the quality of the stadium. The new Wembley has a vast, saucer shaped, 90,000-seat arena, twice the size and four times the height of the old one and has crowned with a gigantic eye-boggling steel arch. The comments that it takes are very fascinating as it has been characterised as the world’s most ambitious, expensive and possibly finest stadium. Another pro earned for Wembley stadium as it is twice the size of the Stade de France. Except the seats and the outside look of the stadium, the great quality of the whole project is justify from the swooping, smooth concrete arena wrapped around with five levels of atriums, walkways, cafes, bars, shops and restaurants. The only part of the stadium that does not fit the whole quality of the stadium is the turf of the football pitch which as described from many football players is the worst choice that the management could choose to put at the pitch.
Community and Environment
The Wembley stadium project, despite the reason of obtaining profits to its owners, it has been built to offer something new to the society of the country. As the Wembley Stadium is the largest in United Kingdom, the largest in world with every seat under cover and the most expensive in world, the whole population of the United Kingdom feel more proud for their country at the category of sports .Additionally with its gigantic dimensions, the magnificent design and the plenty of restaurants and stores helps the upgrade of the area, the city, the country and makes the English people more united and more attracted for having such a stadium for supporting their national teams at the different sports that use the stadium as their home (football, rugby). What is the best with Wembley is that there is not only about sports. The best entertainment events of the year such as music concerts from famous singers and bands and also conferences take place to the stadium. Also there are 688 food beverages kiosks that people can enjoy a meal or dinner and clubs to enjoy the night out. Wembley has earned a place as one of the must-see attractions in London and people around the country want to visit it at least for once in order to see with their own eyes how glorious it really is. Clearly the most benefit from the construct of the new stadium was the area of Brent, London. From the first year which the construction work of the stadium stared, a series of flats, houses, business offices, restaurants and malls begun built as well and until now a lot more stores and restaurants are looking for a space in the area to open a brand. With all these new places operating at the area plenty of places for work opened, helping lot of people in the capital of England to find jobs, especially in a period that all the country suffers from the worldwide economic crisis. It is important to be mentioned that seventy million pounds invested to upgrade the roads, rail and penetration routes to make the area more accessible to everyone.
During the last decades, the climate change and the earth pollution created a worldwide concern among the governments and the people. For the protection of the planet, new rules created in order to low the pollution. Except that, plenty of special interest groups (named as environmentalists) created around the world with a lot of supporters, which their only concern and duty, as they see it, is to observing for companies, projects or anything else that is not obey the ecological rules and keep pollute the atmosphere. It is very important for the project manager during the feasibility study to be sure that the project fits the regulations about the environment.
The Wembley stadium has nothing to worry about in terms of the environmental issues, as except of some little concerns for light and sound pollution, nothing else seems to harm the environment. Instead, Wembley stadium contributes for the save of the planet as different ecological events take place at the stadium, including the Live Earth, one of the biggest ecological events in the world.
Except the non-profitable organisations, every company after the completion of a project that creates expects to be profitable in order to be able to pay the operating expenses, the loans that made to develop the project and some extra money to have in the account to feel that the project is healthy.
What is definitely and mathematically indisputable sure is that if the Wembley project had started on 2000 with the 332 million pounds as necessary cost and did not had the problems with the government, the profits of the stadium would be a fortune by now. However, because that never happen it will be followed an analysis of the profit situation of the Wembley stadium so far. The first profits for the WNSL came on 2005, despite the several failures which were happen the one after the other. The WNSL managed to sell 9,000 seats on October 2005, which worth 300 million pounds over the next ten years. These sales cheered up the confidence of FA over the project because, according with the logistic calculations on 2005, if they managed to sell another 5,000 seats they would reach the break-even point. Furthermore, another reason which relaxed FA was that they had ensured money to start paying the doses for the long term loan worth 400 million to WestLB, which would start on 2006. The most positive calculation was the estimation of gaining profit from the first year which the stadium will open (the opening supposed to be on May 2006). But once again, the future didn’t come exactly as FA predicted as Multiplex could not finish the stadium on May 2006. That had as a result the cancelations of the football matches and the concerts that planned to take place at the New Wembley stadium. The FA had to see the costs been risen up for another one year and to not be able to start making profits again. Finally the project was finished and the stadium officially opened on 2007 to hostile football matches, music concerts and other events. The disappointing was that the Wembley stadium did not succeed to make profit at the first year as the year closed with 21.4 million pounds loss. The Wembley Stadium’s managing director, Alex Horne, said: “It was never envisaged that the stadium would record a profit in the first few years of operation. Our focus in 2007 was on familiarising ourselves with the building; dealing with teething problems; and over-servicing our early events to ensure a smooth and safe experience for visitors. (Jeremy Wilson, 16/5/2008, Wembley aim to turn a profit, The Daily Telegraph)”. Moreover, the managing director ensured that the 2008 will be profitable for Wembley stadium as there will be cutting costs and the earning will be a lot more from the events. As the future showed the techniques that the manager director of WNSL said that will turn the things around were not effective as the end of 2008 found the Wembley stadium with 31.1 million pounds pre-tax loss. With a statement to the press, the WNSL declare that the new long term business plan is to break even until 2014 and then the stadium will start making profit.
Visions & Goals
Every company which decides to make a project, at the very beginning sets some visions and goals for that project. Visions show how the company imagine the project that it will be at the future and what place will take to the market that will operate when it will be created. Goals and objectives, otherwise mission statement, show some specific intended outcomes that the company expects to achieve after the completion of the project and by achieving that to come closer of reaching their visions.
The visions that FA aspired for the project were to create a world class, gigantic with modern design and high -class comforts stadium which will be used for every kind of events such important football games, music concerts, conferences etc. Moreover the stadium should be corresponding in worth with the old Wembley stadium, so to be proud all the people for the new home of their national team. At last, the stadium to take place among the other top landscapes in the United Kingdom who everyone must visit at least for once.
The first goals and objectives that WNSL set when the project was first conceived, was the new Wembley stadium to host the 2005 World Athletics Championship, the 2006 World Cup and the 2012 Olympics and also the FA cup final on 2003. Nothing of these happened, as the stadium opened on 2007. The only event that left from the above is the 2012 Olympics but there are a lot of arguments which take place as for which sports will be host from Wembley.
After the fail to achieve the first goals, WNSL set other goals on 2003. These goals were for 2006, and once again was the FA cup final and the host of music events, which one of these was a concert from Bon John Jovi. Moreover a friendly game and two Euro 2008 qualifiers games scheduled to take place at the new stadium. Unfortunately, for the same reason as for the previous goals, the above goals had not been achieved. The last goals that have been set from WNSL last year are to be break-even until 2014 as until now all the years close with loss and to host 40 events every year as the most of the events that managed to host during a year are 35.
Based on the analysis of the components which have been chosen as criteria, a clearer image from all the views of the project can be acknowledged. At this part of the report, which is the conclusions, the pros and cons of each element which took place at the evaluation will be mentioned in order to be decided if the project is at last success or failure.
Below, there are the cons that count as main reasons for the fail of the project.
The poor and inexperienced management from the WNSL over the project could not managed properly Multiplex and to push the right pressure for better results and to finish the project on time.
The misjudgement of the time needed for the project to be accomplished cost for the FA a lot more unexpected cost and many people and organisations lost their confidence over them. Furthermore, the repeated cancellations of football and music events because of the delays, except of the loss of the profit, made the situation among the people even more complicated.
The mistake to calculate again the extra cost which would be until the government accept the project and after to sign a contract with Multiplex had as conclusion to looking for founders for a long time in order to start the project after the approval and also to be at the courts with Multiplex until now to be decided who has the responsibility. The miscalculation of the logistic executives at the planning of the project on the amount of the operating cost after the opening of the stadium cost a lot for the WNSL as at the end the the operating cost is doubled than they expected to pay for.
The lack of quality from the executives of the project was clear as they did not use the appropriate logistics for the economic configuration of the needs of the project.
Lack of quality and experienced declared and for Multiplex, as the Australian construction company made plenty of mistakes during the construction of the stadium and showed that it could not manage and control its workers (strikes and drugs).
The inability to achieve their goals showed the WNSL as they cancelled a lot of events as for example to be hosted the FA Cup final from the new Wembley stadium on 2003 had been announced as a goal from then on 2001.
Three years passed since the Wembley stadium opened until now. Despite the plenty of events that hosted by the stadium during the last three years, the WNSL still has a loss instead of profit at the end of every year. This occurs because of the high instalments that WNSL has to pay for the loans and because the stadium does not host the maximum number of events as it was predicted.
As the most important cons mentioned above, now it is time to talk about the pros.
The quality of the new Wembley stadium is excellent, more than everyone would imagine. Wembley is the most expensive stadium in the world with the most fantastic design and includes so many comforts that nobody could expect that from a stadium. Wembley is deserved in the list as one of the most attracting and must-see landmarks in London, United Kingdom.
Brent, London is the area which the new Wembley stadium has been built. The community of the area must be very thankful for that project as because of the stadium the area has been completely re-developed. New flats, houses and business offices have been built. Famous brands of restaurants, pubs and shopping malls opened in the area. Even an upgrade of all the roads that go to the area happened which valued millions of pounds. The most significant of all is that a lot of places for jobs created which is what need during this period with the economic global crisis. Moreover, the stadium, instead of the athletics shows, includes great bars and clubs which had as result to improve the nightlife of the area.
The Wembley stadium is green as not only fulfils all the new environmental rules but also contributes to the safety of the planet though hosting worldwide class events like “Live Earth” which famous people around the world donate plenty of money against the destruction of the Earth.
As you can clearly understand the above pros and cons are the outcomes from the evaluation of different components of the project. The final conclusion is that the “New Wembley stadium project” is a failure. The most important reason that I made my conclusion is because it failed in too many elements and not just in some elements, but at the most important elements which needed to be successful in order the project to be considered as success.
As it was mentioned before the project failure theory concerns a project as failure when at least one of the below components is not met at the end of the project:
The met of budget and schedule,
the expected results to be delivered,
the expected quality to be delivered
The only component that the “New Wembley stadium project” met successfully is the quality of the stadium. In all the other components it just failed dramatically, which is reasonable from my point of views to be considered as a failure.Order Now