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Linköping University IEI Professor Jonas Söderlund Project Management

THE TURNING TORSO

The relationship between an innovative construction project and its stakeholders

Learning Team 7

Word count: 7496

Sara Dabiri Tamara Stokic Anna Svenberg Mari Särevik

Index 1. Introduction ..................................................................................................................................................3 2. Aim of the report.........................................................................................................................................3 3. Structure of the report..............................................................................................................................3 4. Delimitations ................................................................................................................................................3 5. Methodology .................................................................................................................................................4 6. Theoretical Frame of Reference............................................................................................................4 6.1. Stakeholders.........................................................................................................................................4 6.1.1. Stakeholder Mapping.................................................................................................................4 6.2. Project Uncertainties ........................................................................................................................5 6.3. Inaccuracy in Forecasts....................................................................................................................6 7. Empirics..........................................................................................................................................................7 7.1. Prominent Parties Involved ...........................................................................................................7 7.2. The Process of the Project...............................................................................................................7 8. Analysis........................................................................................................................................................ 12 8.1 Stakeholders....................................................................................................................................... 12 8.2 Conflicts between the stakeholders .......................................................................................... 14 8.3 Uncertainties and their effect on stakeholders..................................................................... 15 8.4 Bias in project forecast................................................................................................................... 17 9. Conclusion .................................................................................................................................................. 18 10. References................................................................................................................................................ 19 10.1 Articles and Literature................................................................................................................. 19 10.2 Electronic References................................................................................................................... 19 10.3 Visual References........................................................................................................................... 20 10.4 Quotes ................................................................................................................................................ 20

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1. Introduction The Turning Torso is a construction project that combines unique architecture and advanced engineering. It is one of Europe’s highest residential buildings, designed by the world renowned Spanish architect Santiago Calatrava. The building is a succession of nine cubes, each six stories high, and it symbolises a turned human body, twisted 90 degrees from the bottom to the top. The construction started in 2001 and by 2004 it reached its full height of 190 meters consisting of 54 floors. The following year the building was completed and tenants started to move in. We have chosen to cover the Turning Torso project because of its uniqueness; nothing like it has ever been done in Sweden and never before has an architect played such an important role in the construction process. The project has received a lot of praise and recognition throughout the world and is considered a huge success in architectural circles. However, the project has also been heavily criticized in the media and press due to delays, lack of prospective tenants and the fact that the original budget was exceeded by more than a 100 percent.

2. Aim of the report The aim of the report is to study and analyze what is the relationship between the Turning Torso project and its stakeholders. To answer our key question we start by outlining the different stakeholders and the relationships and conflicts between them. Furthermore we study the uncertainties and how they reflect on the stakeholders and the project respectively. Also, we want to put extra focus on one stakeholder in particular, the CEO of HSB Malmö, and investigate whether if he was biased when establishing the project forecast. By writing this report, we connect the studied theories to an existing project and thus we hope to strengthen our understanding of project management.

3. Structure of the report First, we describe the theories included in the course literature that we believe are relevant for this particular project study. Second, we have gathered empirical data regarding the process of the Turning Torso project. Finally, we connect the theories and the empirical data in order to make an analysis of the project and through that come to a conclusion.

4. Delimitations A part of the empirical data has been collected from two documentaries about the Turning Torso. Even though documentaries are meant to reflect reality, the filmmaker still puts their own mark on the final result. Therefore documentaries as such can be more or less biased, and this may have affected our interpretation of the events of the Turning Torso project. Furthermore, the available information about the process of the project from a project management point of view is somewhat limited; hence our 3

description of the project can be considered narrow to some extent. Due to insufficient information, we make reservations for any errors of interpretation that may be in conflict with the actual events.

5. Methodology The empirical data has been collected from various sources, of which most are electronic. Other sources used include a case study, course literature and two documentaries describing the process of the project. One of the theories we have chosen is Newcombe’s theory about stakeholder mapping because it enables us to identify the stakeholders in the Turning Torso project. Also, we have chosen De Meyer’s theory about uncertainties, since we believe that they affect the project and thus the stakeholders. Finally, we utilize the theory of Flyvbjerg, which deals with bias in project forecasting.

6. Theoretical Frame of Reference In the following section we will explain the theories that will serve as a base for our analysis. 6.1. Stakeholders According to Newcombe (2003), stakeholders can be defined as groups or individuals who are directly or indirectly affected by the outcome of a certain project. He defines those stakeholders directly affected as primary and those indirectly affected as secondary. In short, everything that affects the project ultimately affects the stakeholders; everything is intertwined. The project is under pressure to fulfil the expectations of the different stakeholders, something that may be difficult since they are often opposed to one another. Conflicts between stakeholders may be found in terms of, for example, cost vs. quality and short-term vs. long-term goals. 6.1.1. Stakeholder Mapping According to Newcombe (2003), stakeholder mapping can be done by using the method of the Power/Interest Matrix which treats the level of power of the different stakeholders and their expectations on the project. LEVEL OF INTEREST

Low

Low

High

Minimal Effort

Keep Informed

Keep Satisfied

Key Players

POWER

High

Figure 1. Power/Interest Matrix (source: Newcombe, R. 2003)

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In the Power/Interest Matrix the stakeholders are assigned to different categories in regards to their level of power and interest in the project. Depending on the zone in which the stakeholders fall, the course of action in order to manage them varies. Stakeholders with little interest in the project and insignificant power to influence it only require minimal managing effort on behalf of the project manager. With those that have high interest and low power, the project manager needs to maintain good communication and keep them fully informed of any major decisions, as they may have influence on more powerful stakeholders. Stakeholders with low interest and high power are the hardest to manage; they need to be kept satisfied with the course of the project, otherwise they may increase their interest and thus move on to being key players. The most important stakeholders are the ones that have high interest and high power – the key players. They have to be considered when formulation the strategy of the project. 6.2. Project Uncertainties According to De Meyer et al (2002), the project manager is a coordinator and a scheduler. His/her role is to identify conflicts, clarify responsibilities and monitor the entire project. This entails comparing budget, schedule and deliverables against the project plan, enforcing deliveries and coordinating the stakeholders and suppliers. Additionally, it is of great importance that an uncertainty profile is performed in order to decide how and to which degree each type of uncertainty may affect the project. De Meyer et al (2002) distinguish four types of uncertainty; variation, foreseen uncertainty, unforeseen uncertainty and chaos, and each of them require different approaches. In most projects all four types can be found, although to a different degree: Variation: At the start of the project, the managers have clearly defined objectives; they know the sequence and the nature of the activities regarding the project. The plan is detailed and stable, but schedules and budgets can still vary from their projected values. Concerning construction projects things like weather problems and delayed deliveries influence the budget. These influences are considered too small to monitor individually, however, they can plan be for in the form of buffers in terms of expense and time. Foreseen uncertainty: Is an identifiable and understood influence that the team cannot be sure will occur. The risks are distinct and may require full-blown risk management with several alternative plans, so called contingency plans. Unforeseen uncertainty: Cannot be identified during the planning of the project. The project team is either unaware of the probability of the uncertainty, or considers it unlikely to occur and therefore does not bother to create any contingency plans. Unforeseen uncertainty occurs in any project that pushes a technology envelope or enters a new or partially known market. Chaos: Occurs when the basic plan of the project is unstructured and there is no clear goal.

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De Meyer et al (2002) also mention different courses of action to possibly reduce uncertainty in projects: Managing variation: The role of the project manager is that of a trouble-shooter; the main focus is to control slippages in the budget, schedule and deliverables. If there is no plan for variation and trouble arises, the project manager is forced to find solutions in order to get the project back on track. This implies a possible waste of resources and a negative effect on the stakeholders. Managing foreseen uncertainty: During the course of the project, the project manager must constantly monitor all risks and create contingency plans to manage them accordingly. These contingency plans need to be communicated to the stakeholders. Managing unforeseen uncertainty: The project manager’s main task is to maintain close and flexible relationships to the project’s stakeholders and get them to accept unplanned changes. The stakeholders may interfere in matters regarding the project, so a big part of the manager’s job is to anticipate and soften resistance by creating flexible contracts and by keeping stakeholders well informed. Furthermore the project manager also works with contingency plans; however these need to be re-evaluated on a regular basis in order to face unforeseen events. Managing chaos: The project manager’s job is to constantly redefine the project as a whole; there is no other way to manage the situation than with complete and utter flexibility. It requires the involvement of the organization’s leaders and may put them in a situation where they have to make major decisions about resource allocation and how to set different targets. 6.3. Inaccuracy in Forecasts Flyvbjerg (2006) argues that there are two main explanations for inaccuracy in project forecasts; optimism bias and strategic misrepresentation. Optimism bias refers to the tendency to see things in a more positive light than they actually deserve. It is really a case of unintentional self deception where the forecaster enhances the positive aspects and diminishes the negative aspects without even realizing it. The forecaster takes a subjective inside view and focuses on the various internal factors without putting the project in an external context. Optimism bias is more likely the explanation of inaccuracies when the political and organizational pressures are low or absent. Strategic misrepresentation implies a premeditated distortion of the project forecasts where benefits are overestimated and costs are underestimated in order to better the odds of getting approval and funding for the project. Contrary to the case of optimism bias, strategic misrepresentation implies that the forecaster knowingly presents an embellished and deceptive image of the project. When the political and organizational pressures are high, strategic misrepresentation is more likely the explanation of inaccuracies.

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7. Empirics In the following section we will explain the process of the Turning Torso project. 7.1. Prominent Parties Involved HSB is the largest residential cooperation in Sweden, with its approximately 540,000 members and 4,200 tenant-ownership societies. The organization is divided into 33 regional HSB societies, each with its own board and assembly. One of these societies is HSB Malmö, which was the financier of the project and is now the owner of the Turning Torso.1 The Spanish architect, artist and engineer Santiago Calatrava is world renowned for his work with buildings and sculptures, and has received several honours and awards over the years. The design of the Turning Torso is inspired by his sculpture “The Twisting Torso”.2 NCC Construction Sweden is on of Sweden’s most prominent construction companies. It is organized into five regions; one is “Southern Sweden”, who was the main contractor during the Turning Torso project.3 7.2. The Process of the Project In 1999, the then CEO of HSB Malmö, Johnny Öhrbäck, saw a picture of a sculpture called The Twisting Torso, designed by the Spanish architect Santiago Calatrava. The sculpture symbolizes a human body in a twisting movement and Öhrbäck got the vision of transforming the sculpture into a building. At the same time, the Öresund Bridge project was terminated, which created a link between Sweden and Denmark and had a positive impact on the development of the region. Moreover, Sweden’s first international housing fair, Bo01, was to take place in Malmö. The focus of the fair was to develop the Western Harbour of Malmö; from an industrial area in decline to a prosperous neighbourhood full of housing, entertainment and offices. 4 When planning the fair, the city of Malmö had developed and established an environmental quality program in order to build a sustainable neighbourhood. The program was supported by the Swedish government. 5 Öhrbäck contacted Calatrava and presented his idea of constructing a building aimed for housing in the Western Harbour of Malmö. The design of the building had to be innovative and original in its appearance. It was meant to be an international sight close to the new Öresund Bridge link, a symbol for the new Western Harbour area and a symbol for the city of Malmö’s ambition of a long-term future development.6 Calatrava was however not convinced of the location of the building; the city of Malmö was at the time a grey industrial city with an abandoned harbour, not suitable for a building of this HSB Malmö Calatrava official website 3 NCC 4 HSB Malmö official press information 5 Rolfsdotter, C (2006) 6 Ibid. 1 2

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character. Throughout their discussion Öhrbäck tried to convince Calatrava of the vision he had for the area; to lure the “designer-clothes crowd” from Copenhagen.7 “If we build it [the Turning Torso], the Prada handbags will come.”

Johnny Öhrbäck, CEO HSB Malmö

The two finally agreed to work together and base the design of the building on Calatrava’s sculpture The Twisting Torso.8 The main challenge of collaborating with Calatrava was that he, although having great experience in architecture; he had never designed buildings for housing, nor skyscrapers before. Öhrbäck and Calatrava were working with the first drawings of the skyscraper, where the height of the building gradually increased from 75 to 190 metres, adding two additional cubes to the original seven. At the same time Öhrbäck had to convince the board of HSB Malmö to accept the construction of the building, since it was considered to be outside of their core business; to construct safe affordable housing for the people.9 “(…) I thought that this [project] could be a part of the renaissance for HSB; to attract the best. (…) To me, it feels natural that it is HSB that accepts this project. (…) Today, the project is like the Formula 1, but we hope that it will be the standard of tomorrow (…)” Johnny Öhrbäck, CEO HSB Malmö

Öhrbäck estimated that the start of the project would be in May 2000 and the construction time would be one year. Even though the board was interested in the project, they wanted a detailed budget to be sure of the project’s economical feasibility. The total cost, including the costs for construction, administration and marketing, were estimated to approximately SEK 550 million. The board wanted to know if the expected revenues would be enough to cover the costs, and decided to carry out a market inquiry in order to measure the public’s interest in buying apartments in the Turning Torso. The condition stated by the board in order to continue with the project was that by September 2000, at least 70% of the apartments had to be signed up. However, this number of prospective buyers/tenants was not reached, and led to further discussion in the board room. 10 By this time, Ingvar Nohlin was assigned as the project manager. He decided to use the so-called Construction Management organization, which meant that HSB Malmö managed and controlled all of the construction processes and assumed full responsibility for the project. In the press, Nohlin stated that this organizational structure gave HSB Malmö freedom to make changes during the course of the project, which was bound to happen in such a complicated project. A management team was established by HSB Malmö, which mainly consisted of NCC employees. Further, Nohlin decided to work with 40-50 subcontractors and suppliers who all were contracted by HSB Malmö.11 7

Discovery Channel HSB Malmö official press information 9 Tryggestad, K. (2006) 10 Tryggestad, K. (2006) 11 Rolfsdotter, C. (2006) 8

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One of the first things that Nohlin did was to question the estimated budget. He adjusted the total estimated costs to SEK 730 million. The construction time was also modified, from the previous plan of one year to a new two-year plan.12 In February 2001, the official construction of the Turning Torso was initiated when Calatrava, Öhrbäck, two representatives from the Malmö municipality and the chairman of HSB Malmö Sven Olof Nilsson put their spades to the soil of the construction ground13. Once starting the project, the project management continuously had to adjust the budget due to the underestimated costs. The main constructor NCC was also involved in the budget discussions and contributed with their expertise.14 As said Nohlin: “The management of NCC is not very happy with the numbers right now.”

Ingvar Nohlin, Project Manager HSB Malmö

During a meeting between HSB Malmö, NCC, and Calatrava and his staff, the cultural differences between them became obvious; NCC was not satisfied with the Spanish work procedure. For instance, NCC was accustomed to receiving detailed concrete specifications, whereas the Spanish architect argued that according to the international standard this was the responsibility of the local contractor. Nohlin and Öhrbäck noticed the tense atmosphere and tried to smooth things over.15 “The big construction companies, they are used to make most of the decisions, that is why the role of the architect in Sweden is not very prominent. (…) Without the design by Calatrava, there will not be a good Turning Torso. That is why it is my and Ingvar’s task to defend the design towards the arguments made by NCC that the cost will be too high.”

Johnny Öhrbäck, CEO HSB Malmö

Calatrava was willing to oblige with the different wishes in order to make the project proceed as smoothly as possible. As he expressed it: “This is not a technical matter; this is a matter of team spirit and will to cooperate.”

Santiago Calatrava, architect

The construction was under process, with the casting of the foundation in August 2002. At this time, 40 potential owners had gone from merely being interested to signing a letter of intent to be among the first tenants in the Turning Torso. The production method for continuing above ground level was based on a climbing form, and testing of the method was undertaken during one month before it was considered adequate. The construction labour worked seven-day shifts and were accommodated in caravans close to the construction site. As new floors were added and the building grew, so did the number of delays. Originally, there had been an estimation of finishing one floor each week; however one floor was completed in 11-12 days on average. One major reason for this delay was due to bad weather conditions, since the construction was put on hold 12

Tryggestad, K. (2006) Ranelid, B. (2005) 14 Tryggestad, K. (2006) 15 Gertten, F., WG Film (2005) 13

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when the wind exceeded 20 metres per second. In total, around 140 working days were lost because of hard wind.16 Another cause for delay of the production was the lack of delivery of the drawings from Calatrava’s office in Zurich. The project management blamed it on the fact that the architect was involved in many different projects at the same time. “One problem is how the company of Calatrava is organized; everything needs to go through him and at the same time he is extremely involved around the world. (…) The collaboration between our people and the office of Calatrava is not working. Before we continue, all the drawings need to be present. If we are to cut the cost, we ought to do it now. (…) The collaboration has to work otherwise we are going to have big problems.”

Johnny Öhrbäck, CEO HSB Malmö

All the delays, together with the increasing construction costs, resulted in the withdrawal of some of the potential tenants; people found other places to live or were intimidated by the high cost. Even though the first apartment was officially sold in mid 2003 and the constructor NCC announced in a press release that the registrations of interest were pouring in from all over the world, the interest in buying apartments in the Turning Torso had almost vanished by the end of the same year.17 At the same time as the interest in the apartments declined, there were other issues to deal with for the project management. They had discovered some flaws on already completed parts of the so called “spine skeleton” – the white tubular steel structure that wraps around the building to give it support. It was falling apart. The steel beams were pre-fabricated by a Spanish supplier, who refused to assume any responsibility for the low quality. Nohlin tried to solve the problem by re-welding the beams in place. The new welds worked, but it resulted in a series of delays since other work units, such as the painting crew, could not proceed. Nohlin prepared himself for the confrontation with the Spanish supplier by reading up on the Spanish style of management hoping to find common ground.18 When Öhrbäck and Nohlin informed Calatrava that approximately 75% of the beams had flaws, he responded: “It is a problem that you discover the faults here, I cannot understand (…) even faults in pieces that are put in the concrete. (…) This is clearly your fault! Why did you not check the pieces before you put them on site?” Santiago Calatrava, architect

After a vivid discussion, Calatrava offered to help HSB Malmö and NCC with the difficult situation, even though they had put themselves in this difficult situation. He offered them a number of solutions in order to repair the damages. To be able to pay for the continuously increasing costs, HSB Malmö found themselves forced to sell off other buildings with a total value of approximately SEK 800 million. Eventually, the budget exceeded SEK 1 billion, which forced the board of HSB Malmö to 16

Tryggestad, K (2006) Ibid. 18 Discovery Channel 17

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take action. During a general assembly in spring 2004 it was announced that Öhrbäck was to be replaced as CEO: 19 “After receiving information about the increased cost of the Turning Torso project, the board has unanimously reached the decision that we cannot keep Johnny [Öhrbäck] as the CEO of HSB Malmö.”

Member of the HSB Malmö Board

Öhrbäck was asked to give his version of the story during the same assembly: “(…) I just want to be treated fairly. I take full responsibility for situations where I haven’t delivered. (…) I’ll take my responsibility but I’ll be darned if I have to take responsibility for other issues.”

Johnny Öhrbäck, CEO HSB Malmö

Calatrava commented the dismissal of Öhrbäck with the following statement: “Sweden is a country that is used to doing comfortable things; if someone wants to do something new he is fired. It’s terrible! (…) It speaks very badly, not only for the company but for the country. Sweden is not a place for visionaries. (…) Öhrbäck wanted to deliver to Malmö, to Sweden and to his company. He has succeeded so he is not a loser.”

Santiago Calatrava, architect

Greg Dingizian was chosen as the new CEO of HSB Malmö. One of the first decisions taken by HSB Malmö with Dingizian in charge was the transformation of the Turning Torso apartments; from tenant-ownership to rentals. This was due to the fact that HSB could not guarantee the minimum level of apartments sold.20 The project proceeded under the new management and in August 27th 2005 the Turning Torso was finally inaugurated, four years after construction start.21 The tower’s total area of 17,500 m2 is divided into living space (13,500 m2) and office space (4,000 m2). In addition, the two top floors have been turned into conference facilities. Since the finalization of the project, the Turning Torso has received a lot of praise and recognition around the world and has been nominated for several awards. For instance, it won the desirable award for Best International Building for Housing at the international real estate fair MIPIM in Cannes, France in 2005.22

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Gertten, F., WG Film (2005) HSB Malmö press release (1) 21 HSB Malmö press release (2) 22 HSB Malmö press release (3) 20

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8. Analysis In this section we connect the theoretical frame of reference with the empirical data. 8.1 Stakeholders We have outlined several primary stakeholders of the Turning Torso project including the owner and project financier HSB Malmö, the architect and designer Santiago Calatrava, the main construction company NCC, the CEO of HSB Malmö Johnny Öhrbäck, the Project Manager Ingvar Nohlin, the city of Malmö and the different suppliers and subcontractors. Furthermore, there are a number of secondary stakeholders; HSB Sweden, the Swedish government, all workers on and off site and their families. Also, even though they cannot really be identified as stakeholders, the media and press can have a tremendous effect on a projects outcome. However, we have decided to focus mainly on the primary stakeholders in this analysis. To better describe the primary stakeholders, we have used the technique of the stakeholder mapping. In the Power/Interest Matrix (figure 2 below) we have placed the stakeholders in different zones, depending on their level of expectations and possibility to influence the outcome of the project. Low MINIMAL EFFORT

High KEEP INFORMED

City of Malmö Suppliers Potential Tenants

Low POWER

High

KEEP SATISFIED

KEY PLAYERS

HSB Malmö Calatrava NCC CEO Öhrbäck Project Manager Nohlin

Figure 2. Power / Interest Matrix, Turning Torso project

As one can see, we have placed the majority of the stakeholders in the “Key Player zone”, since we consider them having both a high level of interest in the Turning Torso project and a high level of power to influence it, although to a varying degree. Three stakeholders are placed in the “Keep informed zone”; the City of Malmö, the suppliers and the potential tenants. The City of Malmö is placed in this zone, because we believe that once giving HSB Malmö the permission to build the Turning Torso, the city does not have much power to influence the project. However, its expectations on the building appears to be rather high; if the project is successful, the city of Malmö will be put on the map which may lead to an increase of tourism that in turn generates city revenues and job openings. Furthermore, we place the different suppliers in the keep informed zone. We believe that if there are a large number of minor suppliers, as it is in this case, then one of them can not solely affect the total outcome of the project; its individual contribution to the project as a whole is too small. If there had only one available supplier of a certain 12

material, then this supplier should have been placed in the key player zone. However, a delivery delay of a minor supplier can indirectly affect other areas of the construction, since it is difficult to continue the process if one area is not finished – one can not build the second floor of a house if the first floor is not finished. When it comes to the suppliers’ expectations of the project, we believe that they were quite high since being associated with the innovative Turning Torso project might be considered prestigious; it could strengthen the suppliers’ reputation and therefore bring future clients. The third group of stakeholders placed in the keep informed zone consists of the potential tenants of the Turning Torso. The initial market inquiry made by HSB Malmö showed a general interest among the public of purchasing an apartment in the building. It is a similar situation as with the suppliers; they do not have individual influence on the project, but if they were to join forces they could have an impact on the project. Since there is no evidence of this, we consider their level of power to be low. In addition, we want to mention the possible change in the tenants’ level of interest at the end of the project. We believe that when the apartments, due to the lack of prospective buyers, were transformed into rentals, the level of interest of the project might also have been changed; from high to low. The potential tenants would then be placed in the “Little effort zone” (as shown in figure 3 further below). HSB Malmö is placed in the key player zone. We consider the organization to have the greatest power of all stakeholders in the very beginning, since it was the members of the HSB Malmö board who had the power to decide whether to approve or reject the proposed project. However, once a confirming decision had been made, the power of the board to influence the work process decreased to the same level as other key players (further described below). We believe that HSB Malmö’s main goal with the project was to enhance the reputation of the organization and gain prestige. Since the Turning Torso project was considered to be outside the organization’s core business, a success was necessary in order to justify the large cost associated with the project. Hence, we consider HSB Malmö to have a very high level of interest in the Turning Torso project. Another key player in the project was the architect Santiago Calatrava. Fact is, Calatrava possessed knowledge not only about the architectural design but also about the actual construction of the building, being an engineer. Since he had the power to influence the design, he could also influence the cost; if Calatrava considered an amendment necessary, the CEO Öhrbäck and the Project Manager Nohlin supported his decision. This is why we believe he had a high level of power. Furthermore, we consider Calatrava to have a high level of interest in the project, since he had never before designed and constructed a residential skyscraper. The possible success of such a project could bring even more global recognition and allow him to continue designing this type of buildings, should he wish to do so. We also consider the constructon company NCC to play a key role in the Turning Torso project. As for HSB Malmö and Calatrava, NCC had a high interest in the project since it would bring a significant financial gain for the company. If the project process had been aborted due to the exceeded budget, NCC could have lost both time and money in the process, not to mention their reputation for being involved in a project that failed. Further, we believe that the company had a high level of power to influence the project since they were included in the management team and also were the main contractor.

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For instance, if not satisfied with any decisions taken, NCC could have stopped or obstructed the construction by sending the workers home. The final two key players in the Turning Torso project are Nohlin and Öhrbäck. We believe that they both had a high level of interest in the project, but for different reasons. In his capacity as the Project Manager, Nohlin wanted the project to be a success, but we do not consider him to be as personally involved in the project as Öhrbäck was. We see Öhrbäck as somewhat of a visionary, who put his career at stake when pushing for this innovative and extraordinary project. As mentioned above, the Turning Torso was considered as something deviant from the HSB Malmö core business, and when Öhrbäck persuaded the HSB Malmö board to approve the project he had to deliver a success. The power of Nohlin and Öhrbäck to influence the project was also high, ranging from being almost equally high in the beginning to becoming very different at the end of the project; Öhrbäck and Nohlin worked closely together in the management team until the cost situation became untenable to the HSB Malmö board, which lead to the dismissal of Öhrbäck and the loss of all his power to influence the project. We believe that Öhrbäck then moved to the keep informed zone in the Power/Interest Matrix, because even though his power was lost, he still kept a very high interest in the project (figure 3 below). LEVEL OF INTEREST Low MINIMAL EFFORT

High KEEP INFORMED

Low City of Malmö Suppliers CEO Öhrbäck

Potential Tentants

POWER

KEEP SATISFIED

KEY PLAYERS

HSB Malmö Calatrava NCC Project Manager Nohlin

High

Figure 3. New Power/Interest Matrix, Turning Torso project

8.2 Conflicts between the stakeholders In the Turning Torso project we could identify the following conflicts of interests of the different stakeholders linked to their diverse objectives, the amount of risk taken and the quantity of resources involved. HSB Malmö entered this project, taking a large risk since the aim of the Turning Torso project – constructing one of the first residential skyscrapers in Sweden – was outside of their core business. A lot of the members did not consider this to be aa appropriate endeavour for HSB Malmö. They felt that not all of the members could, even if they wanted to, get access to the apartments since the prices exceeded the regular price range of earlier constructions of HSB Malmö. A failure of the Turning Torso project would mean severe losses for HSB Malmö in terms of money, time and reputation. The main criticism the members of HSB Malmö had towards the project was mainly aimed at the CEO, since he was the promoter of the project and had assured them of the amount 14

of cost and time needed to complete the construction. We think that Öhrbäck tried his best in communicating with HSB Malmö and convince them that this project was still positive for the association, but in the end the situation got unsustainable and Öhrbäck was dismissed. As mentioned before, the role of the architect in Swedish construction projects is not a common thing. They are normally involved only in the initial phase and basically just hand the design over to the construction company. Therefore, the level involvement on behalf of Santiago Calatrava was highly unusual. The high level of involvement resulted direct and indirect conflicts with the rest of the key players. The stakeholder with whom Calatrava had the most conflicts with was NCC. They were used to one kind of work procedure and Calatrava to another. Another conflict stemmed from the organization of the Calatrava office. The structure of the organization was very bureaucratic; all decisions had to go trough him. This made things difficult because of his involvement in other projects around the world which made him hard to reach. The different conflicts that Calatrava was involved in were somewhat difficult to manage, seeing it from the rest of the stakeholders’ point of view. He was essential for the project since the construction depended on him and his design. Even though Calatrava was willing to try to resolve technical problems, other parties involved were not given free hands to solve problems themselves. Therefore, the solution was often reached through compromise. In the process of compromising, cultural differences such as work procedures, ways of communication etc. played a very important role and resulted in both frustration and time consumption. Furthermore, Öhrbäck had a friendly relationship with Calatrava. One of the most prominent effects of this relationship was that the role of the Project Manager became unclear. Öhrbäck stepped in and took over some of the tasks that Nohlin was assigned to do, for example the contact with the architect. 8.3 Uncertainties and their effect on stakeholders The Turning Torso project had to face a number of problems during its process. The main problems were caused by weather and material flaws which both led to mayor delays and increased costs. It is interesting to investigate how these uncertainties were handled by the project team and how the courses of action affected the stakeholders. In order to handle the stakeholders, Nohlin as the project manager, with help from the project team, had to be a good coordinator and scheduler. It was of great importance to discern which uncertainties that could affect the project and to which degree. This is important while mainly the primary stakeholders had to be kept satisfied, and depending on how well Nohlin had planned possible events, he had to manage the stakeholders differently. As we described in the theory there are four different types of uncertainties which now are going to be applied on the Turning Torso project. In this particular project we can distinguish that there were three salient types of uncertainty.

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In the beginning the project plan seemed fairly stable, which implies that the uncertainty related to the project would be that of variation. The main tasks of the project manager would then be to monitor and make necessary changes the budget and schedule, as did Nohlin when he entered the project and increased the budget and pushed the deadline forward. Furthermore, since this was a construction project Nohlin knew that uncertainties like weather and delayed deliveries could affect both budget and the schedule, but little did he know that they would have an impact that buffers could not amend. Nohlin was faced with the fact the problem could not be solved without substantially increased costs which put a strain on the relationship with the stakeholders. HSB had to invest more and more money to save the project and NCC had their working force tied up to a project that was moving substantially slower than planned. When working with construction projects there is always a chance for late deliveries, especially in this project where 40-50 entrepreneurs were involved. It is then considered to be a foreseen uncertainty. The project team handled it through making sure that all contract were made directly with HSB Malmö in order to have full control. This could be seen as a contingency plan or taking preventative action, because if problems would arise they would be able to deal with them directly instead of having to do it through the main contractor. In turn, this also creates a closer relationship with the stakeholders. The unforeseen uncertainty involved with the suppliers was that the project team did not plan for event that the delivered parts would have flaws. As described, they discovered too late that the “spine skeleton” was more or less falling apart. The biggest issue was not that they had flaws per se, but rather that they had not examined the deliveries thoroughly enough before putting them in the building. This event was not planned for and resulted in a big set back once again. The problem with the flawed “spine skeleton” caused delays for other entrepreneurs who had to put their work on hold until the corrections had been made. Like the weather problem, this also caused major costs and further delays which affected other stakeholders. The project team made sure to inform stakeholders like Calatrava about the problem, however that was not all; they also asked him to help correct the problem which caused a lot of tension and aggravation since it was the project team’s mistake in the first place. This event also added to the already tense relationship with HSB Malmö and NCC. Also, the weather factor could be seen as an unforeseen uncertainty in the Turning Torso project as it kept on affecting the project. They had most likely considered it very unlikely that the weather would affect the project to the extent that it did. As a result the project was extremely delayed; this in turn affected the costs. When this occurs it is up to project manager to maintain a close and flexible relationship to the stakeholders of the project so that they accept unplanned changes. This however did not work particularly well in the Turning Torso project concerning the stakeholder HSB Malmö; even though they might have accepted the change, they were hesitant but did not have a choice since they had full responsibility for the outcome of the project. The mentioned uncertainties were also affecting a very important group of stakeholders, namely the potential tenants. Due to the delays and the fact that HSB Malmö had no possibility to give the prospective tenants accurate information concerning when they could move in, they lost interest. What would then be the purpose of building the 16

Turning Torso, if no one was to live there? This problem could not be solved by the project team, so the board of HSB Malmö made the decision to turn the tenantownership into rentals. 8.4 Bias in project forecast It is difficult to state for sure the factors behind the major inaccuracies regarding the forecasted budget and time schedule for the Turning Torso. The only ones who know the truth are the parties involved in the initial planning. The original plan of the Turning Torso project was elaborated by the CEO Öhrbäck. The project was to be completed within a year and on a budget of SEK 800 million. However, on the day of completion, the budget had reached SEK 1,6 billion and the original deadline was exceeded by four years. This translates into a substantial level of inaccuracy which can be connected with bias in the planning process. The main promoter of the project was the CEO and judged by his conduct and attitude towards the project, it is clear that he was a fervent advocate of this endeavour. From the very start he was open about his passion and fascination - in many ways this was his project.

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9. Conclusion There is no single answer to the question to what are the relationships between the Turning Torso project and its stakeholders, since the relationship is based on an ever ongoing and changing interaction. After studying this project its evident that stakeholders indeed play an important role in the project process. However their level of importance varies. When distinguishing the primary stakeholders and mapping them in the power/interest matrix we have come to the conclusion that it is helpful to analyze the relationship stakeholder – stakeholder, to better understand the relationship stakeholder – project. In our mapping process, most of the stakeholders were placed in the same interest/power-zone; they were defined as key players in the project. However, being key players does not mean that all of them had the same level of influence; the internal relationships within the “zone” determine who had the greatest level of power. When conflicts arise between stakeholders in a project and these conflicts are not dealt with in an appropriate manner, it can have devastating effects on the project itself in the form of delays and additional costs etc. This is apparent in the Turning Torso project where a lot of the problems originated from the discrepancies between the stakeholders. In turn, a great deal of these discrepancies stemmed from the fact that the uncertainties related to the project and how to deal with them, had not been taken into consideration while planning the project. This resulted in waste of time and ultimately in waste of money. When it comes to the biggest conflict in the Turning Torso project; the gap between the forecast and actual outcome of the project, we have come to the conclusion that it is not caused merely by the uncertainties. One cannot state for certain whether the top management of HSB Malmö deliberately embellished the forecast of the project in order to further its realization, therefore one cannot say that it was a case of strategic misrepresentation. However, since Öhrbäck was so passionate about the project, we believe that he may have been inclined to focus on benefits rather than disadvantages. He may have been subject to optimism bias, and thus subconsciously tweaked the cost/benefit ratio and time requirements in order to get approval and funding from the HSB organization. Even though accurate forecasts are preferable, in this case we believe that it could have resulted in the cancellation of the entire project. The members of HSB Malmö approved the project based on certain conditions. Had a more realistic forecast been presented to the board, chances are that they would not approve it, and the Turning Torso would remain a mere dream captured in a marble sculpture.

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10. References 10.1 Articles and Literature De Meyer, Arnoud, Christoph H. Loch and Michael T. Pich 2002 ‘Managing Project Uncertainty: From Variation to Chaos’ in MIT Sloan Management review: 60-67 Flyvbjerg, Bent 2006 ‘From Nobel Prize to Project Management: Getting Risks Right’ in Project Management Journal 37/3: 5-15 Newcombe, Robert 2003 ‘From Client to Project Stakeholders: A Stakeholder Mapping Approach’ in Construction Management and Economics 21: 841-848 Ranelid, Björn and Pierre Mens 2005 ‘Turning Torso’. Malmö, MCT Rolfsdotter, Catarina 2006 ‘Miljöprojekten i HSB Turning Torso’. Tryggestad, Kjell 2006 ‘Constructing buildings and ambitions – The Turning Torso case’ prepared for the conference Micro-Processes of Managing the Construction of Buildings, Copenhagen 10.2 Electronic References Calatrava official website – Description of the architect. 090209 3.33 pm. http://www.calatrava.com/main.htm HSB Malmö – Description of HSB Malmö. 090209 3.41 pm. http://www.hsb.se/hsb/jsp/polopoly.jsp?d=40851&a=134990 HSB Malmö – Official press information Turning Torso. 090209 2.14 pm. http://www.turningtorso.com/dokument/Presskit_sv_061201.pdf HSB Malmö – Press releases (1) 090210 3.43 pm. http://www.turningtorso.com/dokument/040427%20Pressmeddelande% 20HSB%20Malm%F6%5B1%5D.pdf (2) 090210 3.50 pm. http://www.turningtorso.com/dokument/TurningTorso_invigt_sv.pdf (3) 090210 4.02 pm. http://www.turningtorso.com/dokument/PM%20TT%20ev%20vinnare% 20MIPIM.pdf 19

NCC – Description of NCC Construction Sweden. 090209 3.45 pm. http://www.ncc.se/en/About-NCC/NCC-Sweden/NCC-ConstructionSverige-AB-/

10.3 Visual References Discovery Channel 2004 ‘Extreme Engineering – Under Construction; Turning Torso Sweden’. Documentary film. Gertten, Fredrik (director) and WG Film (producer) 2005 The Socialist, the Architect and the Twisted Tower. Documentary film.

10.4 Quotes Gertten, Fredrik (director) and WG Film (producer) 2005 ‘The Socialist, the Architect and the Twisting Tower’ (translated into English by the authors of this case)

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