Andrew stopped outside Jane's door and knocked on the doorframe. Her back to him, studying her screen, Jane must have somehow recognized Andrew's knock. "Andrew," she said without looking up. "One sec."
She half-stood, still holding the mouse and staring at the screen. Then she clicked, stood up straight, and turned to face him. "OK," she said. "Where to?"
"Courtyard," Andrew replied.
They walked silently to the elevator, rode it to One, crossed the lobby, went out into the brilliantly sunny courtyard, and sat down at an empty umbrella table. Jane still had her coffee mug in hand. She sipped.
"So…" she prompted him.
"This contract bothers me," Andrew began. "I'm a project manager. I don't know much about negotiating contracts. I'll probably do something dumb, but I'm not sure that's what bothers me."
Managing a project for which
you negotiated contracts
presents a conflict of interestAndrew wasn't sure, but Jane was. She'd been there. "Right," she began. "The real problem is that project managers shouldn't be negotiating contracts. It's a conflict of interest."
Jane's insight isn't widely shared, but she does raise a critical point. Project managers who must monitor day-to-day performance of contracts they personally negotiated have a potential conflict of interest. Here are some of the ways this conflict can appear.
- Vulnerability to time pressure
- Especially if negotiations drag on, the organization might apply pressure to the negotiator to bring negotiations to completion. For those project managers who are also the negotiators, this pressure can lead to a temptation to yield, based on a belief that we can "close the gap" through cleverness during project execution.
- When project manager and negotiator are separate people, the project manager can better represent the project's interests, insisting on what is actually required, and compelling more creative negotiation.
- Hidden cost transfers
- During negotiations, it's common to entice the vendor with the promise of work on future projects. But when the negotiator manages both the project at hand and the future project, this tactic amounts to a transfer of resources between the two projects. It distorts the costs of both, invalidating the metrics used to manage projects.
- When the negotiator and project managers are independent, each contract is more likely to stand on its own.
- Concealed contract flaws
- When there are flaws in the contract that become evident only during execution, and when the negotiator has gone on to become the project manager, it is the project manager who must report defects in the contract that he or she produced. It can be tempting to find a way to avoid reporting a flaw of one's own creation.
- When the negotiator and project manager are independent, contract flaws are more likely to be reported, and remedial action is possible.
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More articles on Ethics at Work:
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- Presuppositions are powerful tools for manipulating others. To defend yourself, know how they're used,
know how to detect them, and know how to respond.
- Virtual Termination with Real Respect
- When we have to terminate someone who works at a remote site, sometimes there's a temptation to avoid
travel — to use email, phone, fax, or something else. They're all bad ideas. Terminating people
in person is not only a gesture of respect. It's good business.
- Influence and Belief Perseverance
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information arrives. Those who understand belief perseverance can use it to manipulate others.
- Multi-Expert Consensus
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with all its relationships intact.
Forthcoming issues of Point Lookout
- Coming October 12: Downscoping Under Pressure: II
- We sometimes "downscope" projects to bring them back on budget and schedule when they're headed for overruns. Downscoping doesn't always work. Cognitive biases like the sunk cost effect and confirmation bias can distort decisions about how to downscope. Available here and by RSS on October 12.
- And on October 19: Bullying by Proxy: I
- The form of workplace bullying perhaps most often observed involves a bully and a target. Other forms are less obvious. One of these, bullying by proxy, is especially difficult to control, because it so easily evades most anti-bullying policies. Available here and by RSS on October 19.
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