Transforming Iceland

Europe’s northernmost state is famed for its Northern Lights, but project management’s star is also in the ascendant. Emma De Vita reports mid-winter from the volcanic island.

In this geologically volatile country of fire and ice, there’s a saying the locals live by. Þetta reddast, loosely translated, means ‘everything will work out in the end’. When you live on a collection of volcanic islands with a tiny population of just under 380,000, resilience, adaptability and high levels of trust are the way to survive. What’s more, the gung‑ho Icelandic mindset of ‘just do it’ (they were centuries ahead of Nike) is fortuitous when it comes to project managing the various transformations Iceland has passed through as it has modernised over the past century.

Project management is central to Iceland’s latest transformation into a sustainable nation. Surrounded by snow‑covered volcanoes, mountains and lava fields, the country’s diminutive capital Reykjavík is replete with roadworks, cranes and construction sites. Major works include a new hospital, a new public transport line and the ongoing development of the airport. With such a tiny and concentrated population, when you work on projects like these, you really get to see and appreciate first‑hand the benefits they bring.

A century ago, Iceland was an undeveloped society, explains Helgi Þór Ingason, Professor of Project Management at the University of Reykjavík, who runs its Master of Project Management (MPM) programme alongside his teaching partner of nearly 20 years, Professor Haukur Ingi Jónasson. “My grandparents lived in a house made from mud,” the latter explains. The Iceland of the 1920s is a long way from today’s ambitious nation that attracts three million tourists a year, who come to enjoy its waterfalls, lagoons, smoking volcanoes and boiling mudpots. But these natural features are more than Instagram eye candy. Nature’s power is key to fuelling Iceland’s energy transformation.

Energy transition

It began in the 1940s when the country moved from a reliance on oil and gas for domestic heating to geothermal power, fuelled by the geological volcanic heat lying close to the surface. This was followed in the 1960s by the adoption of hydropower for its electricity needs, for which it became self‑sustaining. The smog that hung over Reyjkavik disappeared. In the 2020s, Iceland’s latest transformation project is the electrification of transport, from cars and buses to aeroplanes and ferries, and investment into its gridlocked capital, which is experiencing a population boom.

This rapid change plays to the strengths of the optimistic Icelandic mindset, but the acceleration of transformation projects and the concurrent projectification of Icelandic organisations have required an expansion and professionalisation of the home‑grown project management workforce. Leading the way are Ingason and Jónasson, whose MPM is helping place the project profession at the heart of Iceland’s transformation. The project management courses the university runs are currently being modified in accordance with APM standards; once this is done, the university will be able to grant chartered status to its students. Its graduates are central to many of the country’s most complicated projects. Although the MPM is situated in the university’s Department of Engineering, only 12% of graduates of the course are engineers. There are teachers, ballerinas and nurses on the course, such is the widespread appeal of the career.

A partnership of opposites

Ingason and Jónasson have radically different backgrounds that make for a broad yet deep education in what they term “transparent project leadership and sustainable project management”. Ingason is an engineer; Jónasson is a psychiatrist and cleric. Their definition of sustainability is holistic, not just environmental; it’s about sustaining yourself, your team and the organisation.

What makes their partnership and the course special, explains Ingason, is their emphasis on the things “that are not very tangible, the soft things that cannot be measured but that are usually the sources of problems”. They are a successful partnership of opposites – the objective technician and the subjective counsellor – whose reflective approach charms their students and creates responsible, motivated and critical‑thinking professionals who are charged with changing the world for the better. “We want them to go out and be good representatives of the project management profession,” says Jónasson.

Maximising limited resources

They are needed now more than ever. “The importance of projects as a vehicle for change has risen. We have become more aware of the risks of choosing the wrong projects, and that we are working with limited resources so we need to use them cleverly,” explains Ingason. “Project governance and the decisions regarding projects are being gradually pushed upwards in the hierarchy of the company. A project‑oriented organisation runs its business through programmes and portfolios, and so, automatically, project‑related decisions are taking place at the highest possible level.”

This entry into the top echelons of the corporate world requires the natural self‑confidence Icelanders exude, but sometimes, it can be too much of a good thing. “We often just do things and we sometimes don’t think much about them. Often it turns out okay, but I think that we should take a little bit longer to plan and think about things before we do them,” reflects Jónasson. “We understand that it’s the outcome and the value that we’re creating that is of the utmost importance.” And what better measure of success than the benefits a project brings?

Iceland in facts

The population as of 2022 is 376,248, with two-thirds of Icelanders living in and around Reykjavík.
Total surface area is 103,000 sq km. Glaciers, lava fields and lakes comprise 26% of the total area, 54% is barren land and most of the remaining 20% is used for grazing.
Iceland sits atop the Mid-Atlantic Ridge, the fault line where two of the earth’s tectonic plates are slowly drifting apart, making Iceland 1cm wider each year.
7% of Iceland’s GVA is based on project-related work, indicating that the monetary benefits of projects in 2014 was around 425 billion króna a year and growing.

The high‑flyer leading a revolution

Aðalheiður Sigurðardóttir, Reykjavík Energy Group

Aðalheiður Sigurðardóttir is Director of Enterprise PMO at state‑owned Reykjavík Energy Group. She joined its governance and strategy division in 2021 to lead the group to becoming a project‑based organisation. One of its major programmes is the implementation of electric vehicles (EVs) through its On Power subsidiary, which has a strategic goal to support 40,000 EVs in Iceland by 2023. This will include the creation of charging stations around the main island, installing charging points at home through a lease and monthly fee, and helping finance charging points in apartment blocks.

Reporting to the CEO, Sigurðardóttir has a cross‑functional role to influence the culture of the group’s four subsidiaries to become a project‑based organisation. The group has around 150 people working in project management roles, and her PMO is six strong.

The creation of her department was an urgent response to what she calls “a small rebellion within the organisation”, with people asking for a better project management structure and software tools. They were also complaining that there were too many projects ongoing at the same time. Sigurðardóttir quickly commissioned research, which showed that the organisation had become extremely siloed. To bridge the gaps, she created cross‑functional teams to discuss project topics. For the first six months, it was about getting people to talk, to establish basic project terminology and to understand where the projects were originating.

A small rebellion

Next she met the group’s C‑suite, together with a consultant. “We now meet four times a year to understand how they communicate, collaborate and make decisions.” She also wanted to understand how they would approach conflict.

“We’ve been working a lot with them as a cohesive decision‑making team in this context,” she says. “My regular audience with the C‑suite is very important – keeping them close, working with them and making them accountable for this change.”

This was a precursor for her own “small kind of rebellion”. She initiated a programme that takes groups of nine people and puts them through a nine‑month programme where they are taught design thinking and project management skills. So far, 38 people have graduated from this rolling programme and been placed back into the business to spread cultural change.

A future without job titles

The office interior is also being redesigned to better accommodate project work. “We want to create spaces where we as a team can just coexist for a full day. In the future, job titles will matter less. It’s more about: what is my role today? We’re thinking that people can arrive at the office and can land somewhere where they can have coffee with their teammates, but then you go in separate directions based on what you’re focusing on today,” explains Sigurðardóttir.

There are other strands to the transformation. There is a move to push decision‑making down the hierarchy. Another priority is to understand exactly what the portfolio encompasses and where resources should be invested. The company is building software that will help decisions become more transparent.

How critical does she think project management is to Iceland’s future? “If we want to transform, we need to understand what we want to transform, what it takes and how much we can do. And that’s just simple project management.”

Project managing Reykjavík’s transport transformation

Sunna Björg Reynisdóttir, Deputy Project Director, Vegagerðin

Sunna Björg Reynisdóttir is Deputy Project Director for Reykjavík’s Borgarlína programme. The Borgarlína will be the new public transport line for the capital, modernising the bus system it currently relies on. Too small for a metro or a light railway, Reykjavík has opted for a bus rapid transit system, common to many smaller cities across Europe. The plan is to run electric bendy buses through a new dedicated bus lane in the middle of the street so that speeds can be kept low in areas with lots of pedestrians and bicycles.

“The aim,” she says, “is to make public transport a viable option in daily life. Because the city has grown, there are few places where you have a nice connection and fast interval between buses. For a lot of people living in the suburbs, going to work in another suburb, this isn’t an option, so they drive.”

100 billion króna

The Borgarlína, currently in a preliminary design phase, is part of a larger transport treaty for the city, which also makes provision for the building of more main roads, one of which will run past the new hospital currently being constructed. Improvements to Reykjavík’s transport infrastructure are urgently needed and the treaty is a welcome boost in the wake of Iceland’s financial crash of 2008, when the financing of projects like these was scaled back. The 14.5km Borgarlína route has 100 billion Icelandic króna (£5.85m) in agreed funding.

The major stakeholders in the programme are the new public company that was established to finance it, the six municipalities of Reykjavík and, of course, the public. “A few years ago, you were either with the Borgarlína project or against it. Now I think the discussion has shifted from ‘Should we do it or not?’ to ‘How should we do it?’”

The forecast population increase in the capital region is about 70,000 people to 2035, she says. “How are we going to get around? How much infrastructure do we need to build up?” The first part of the programme is due to be delivered in 2026 and finalised in 2034. “There is, of course, a limit to how much we construct in the city because the route is in the most traffic‑heavy places,” she explains.

Good in a crisis

Reynisdóttir began her project management career in 2012 in geothermal energy. “Because the energy has been so cheap we have got away with not being as good at project management in the early phases of our projects,” she says.

Over the past decade, she has noticed a big rise in the number of qualified project managers, one of the benefits of which is the use of a unified language. “When I say we need the memorandum of change or the project controls person, people don’t just look at me and wonder what I’m talking about,” she laughs.

Does she think there is a particular Icelandic approach to project management? “I would definitely say it’s in our nature to get things done for sure, and that also sometimes means less planning, less thinking ahead. But in a crisis, I think we’re very good and we will get things done very fast and efficiently.”

A timeline of important Icelandic projects

1909 Cold water distribution system in Reykjavík, the largest construction project in Iceland at that time.

1917 Reykjavík harbour project is built, crucial in the development of Reykjavík as a capital.

1906-1983 Telephone line connection to Europe. One submarine channel connection from Scotland via Faroe Islands (opened in 1961). In 1935 the connection opened to London and Copenhagen. This involved building two telephone centres, a receiving station and a transmitting station.

1939-1943 Most houses in Reykjavík were connected to a district heating system serviced by geothermal water from a borehole 12km from the city, replacing oil and coal.

1965 First paved road in Iceland, Route 41 to Keflavik International Airport.

1969 The hydropower plant in Búrfell was commissioned. This was the first time a glacier river was harnessed in Iceland.

1974 Bridge on the Skeiðarársandur. The Skeiðará river was the toughest obstacle in the construction of Iceland’s Route 1 ring road. It was closed by this 904m‑long bridge.

1978 Krafla geothermal power station commissioned, the first large‑scale geothermal power plant (60MW) in Iceland, built on top of an active volcano. The first time electricity was produced (large scale) from geothermal power.

1980 Skyggnir Earth Station came online, which enabled telephone calls to other countries via satellite.

1987 New terminal at Keflavik International Airport. It was the largest construction project in Iceland at that time and has been under development ever since.

1990 Nesjavellir geothermal power station commissioned.

1998 Hvalfjörður subsea tunnel commissioned, the first and only tunnel of its kind in Iceland.

2007-2009 Kárahnjúkar Hydropower Plant is designed to produce 4,600 gigawatt-hours annually for Alcoa’s Fjarðaál aluminium smelter. The project involved damming the rivers Jökulsá á Dal and Jökulsá í Fljótsdal with five dams, creating three reservoirs.

2009 Hellisheiði Power Plant, the largest geothermal power station in Iceland and the second largest in the world, comes online.

2017 Phase One of the new geothermal power plant in Þeystareykir is completed.

2018 The 7.5km Vaðlaheiði tunnel opens.