Makani: From Success

to Failure
CODY WHITELAW
83191247
Executive Summary
Makani was a company aimed at harnessing wind energy using methods outside of conventional
wind turbines.

The project management process Makani went through could be considered in multiple finish to
start stages. Each stage evolved, with increasing stakeholders and their requirements. Stakeholders
went from predominantly internal, with key successes mostly within the operation of the project, to
including peripheral external stakeholders, which required community outreach in order to continue
development and testing.

Correctly managed risks forced minor deviations in the project scope, which was allowable in an
agile system, and did not significantly affect the overall project. Obsolescence, an underlying seemed
risk which was ignored, rather than monitored, caused a cascade of failures. Towards the end of
their project, Makani had to change their project scope in an attempt to mitigate obsolescence. In
doing so, they fell into a traditional management approach, conducting only one ocean test, which
was too costly to ever repeat again.

From Kite to Wing

During the early stages of design and development, Makani used agile management techniques,
quickly producing cheap fabric kites. Each kite failure provided new information for them to learn
from. This is known as incremental delivery of value. The agile management approach was originally
popularised in software development where it was able to deliver value, quickly adding minimal
marketable features in each iteration, which was weighed up against the cost of releasing that
iteration [ CITATION Ver12 \l 5129 ]. Extrapolating this to testing of physical products rather than
releasing to the public, Makani considered the value of knowledge learned from each test to be
greater than the cost of producing the kite. In 2009 they abandoned this approach, and spent 9
months building a rigid, very expensive, carbon fibre kite which catastrophically failed in under 3
seconds.

The stakeholders during the initial stage was primarily internal participants such as the engineers
and other employees. There were slight overlaps with sponsor stakeholders with the founders being
project managers and sponsors. External stakeholders involved were likely to be bankers which
provided loans. [ CITATION Ral00 \l 5129 ].

M600
It was assumed that Makani produced a project charter in order to receive funding from X. The
stakeholders in this project then increased, to include an external sponsor, X. Included in the project
charter would have been a project scope and deadline for the M600. It is likely the original scope of
the next stage of the project was to build a working, scaled up model of Wing 7.

During the creation of the 600kW kite, Makani were following a stepwise approach to discovery.
They were able to design each new wing iteration to test specific parts of their design. In contrast,
waterfall methods for determining the project status during development and implementation has
difficulty in accurately determining completion status, where all of the analysis is completed first,
then all of the design, etc. with faults potentially not realised until closer to deadlines. This can
produce hidden errors that are difficult and time consuming to find and fix [ CITATION Kem04 \l 5129
]. The agile approach emphasises learning early, and building in stages allows problems to manifest
and be fixed early [ CITATION Ver12 \l 5129 ]. Each successful realisation of a new part of the kite,
worked through the analysis, design and development of the specific part before it was considered

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complete. This allowed them to realise early on that they could not present a scaled up version of
Wing 7 to the stakeholders within their required time.

Makani broke into two teams, one to handle the internal constraints of the ground robot, which
constrained against scope, the other to handle the external constrains from stakeholders, which
limited time and budget. Because operation of the ground robot was not required on launch day, it
was removed from the critical path, and considered free floating, no longer needing to be completed
until the next phase of the project.

An agile management approach allows for flexibility of the scope. Makani successfully altered the
project scope, removing the requirement of their desired ground station, using a temporary landing
platform instead. This was not considered scope creep because Makani had the intention, and did
eventually create their desired ground station. The success criteria established with X was for the
M600 to fly cross wind at China Lake by the end of 2016. This did not require their original ground
station, and even though a multitude of failures did occur during the presentation, X considered it a
success, because it met their one criteria. Makani also seemed to consider this a success because of
the information learned from each failure and because they were able to continue receiving funding
from X.

CW and FCW
As Makani moved to Hawaii, they had to consider the local community as new peripheral
stakeholders. Public and peripheral stakeholders generally have a much greater number of recipients
but require minimal depth of detail, compared to other external stakeholders, such as the sponsor,
which is likely to only have a few people to report to, but with greater detail [ CITATION Ral00 \l
5129 ]. Makani successfully conducted community outreach to understand and address possible
hesitations the locals may have about the project. They were likely to go into detail on
environmental effects on the ranch, but most likely didn’t go into full detail on the project
development.

The Makani project eventually failed because their first attempt in Deep Ocean could not return to
base. This failure led to the destruction of their current kite, which was too expensive to replace. As
a result, they lost funding. It could be argued that risk management was not properly assessed
during the construction and test flight of the kite, however the greater risk was not detecting the
need to move to offshore wind farming earlier on in their project. This could be considered a
technical risk of obsolescence [ CITATION Ker00 \l 5129 ]. If they had considered this earlier, they
may have monitored the improvements in construction of generic wind turbines, providing enough
information to predict that obsolescence would occur. Risk management also requires that all risks
should be managed proactively, regardless of the intensity of the risk [ CITATION Enz07 \l 5129 ]. So
even if they hadn’t given the obsolescence risk a higher likelihood and severity, they should have
been monitoring this risk regardless. If this was conducted correctly, the idea to move to floating
base stations may have been implemented during the earlier stages, where it would have been
cheaper to experiment using model systems which wouldn’t have had a greater intensity on the risk
of failure.

Concluion
Makani produced a successful project following agile management principles. Using a stepwise
approach to discovery, they were able to determine problems in their project early, alter their scope

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to fit a locked time and budget, and successfully complete stages of their project by understanding
stakeholder requirements.

Makani failed to monitor the risk of obsolescence. Monitoring this risk during early stages, paired
with their agile management approach, would have allowed them to change their scope early on, as
they had successfully done with other risks. When obsolescence was realised, the project was near
completion, and it likely became too costly to continue iterative testing.

During the Norway testing, In order to minimise costs, and deadline extensions, they relied on
physical tests they’d completed on land, and simulated tests on water. Makani fell into the same
traditional management approach that failed them during their 9-month prototype.

Makani went from an idea, to a completed working product, however underlying problems in their
risk management strategies ultimately led to their failure.

(1250 words)

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References
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Keeling, R. (2000). Project Management An International Perspective. Hampshire: MacMillan Press

LTD.

Kemp, S. (2004). Project Management Demystified. New York: The McGraw-Hill Companies, Inc.
doi:ISBN 0-07-144014-3

Kerzner, H. (2000). Applied Project Management best practices on implementation. Danvers: John
Wiley & Sons.

Verzuh, E. (2012). The Fast Forward MBA in Porject Management. New Jersey: Wiley & Sons, Inc.
doi:978-1-118-07377-3

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