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Are Project Managers the right people to be handling disputes?

Let's set the scene….you've kicked off work on your next big delivery piece of work as a professional services organisation.

You’ve got a great Contract

  • Put together by the "legal eagles" - Tick

  • Signed, sealed and delivered - Tick

You've got a great Project Manager

  • Knowledgeable - Tick

  • Committed - Tick

  • Knows the methodology - Tick

  • Gets on well with the customer - Tick

This is a basic checklist that Professional Services organisations run with starting up a project.

Within this process is an underlying assumption that any "bumps" that occur during the project will be "handled" by the Project Manager and escalated (whatever that looks like) as required.

Strictly speaking, the role of Project Managers is to deliver to the contracts ensuring that the interests of their organisation are met (generally to make sure the company makes money). This singlemindedness provides confidence that the PM is looking to ensure that the terms of the Contract are kept under control, however, this singlemindedness is often the root of disputes when parties start to dispute areas of the Contract. Dispute resolution requires a different perspective and skillset.

So why then do organisations believe that when the "bump" occurs that the Project Manager is the appropriate person and/or has the skills required to navigate through potential disputes?

It is certainly true that (experienced) Project Managers may have the ability to understand at least the contract in front of them, but should the project hit a bump is that really enough? Is the Project Manager is truly able to pause and assess a dispute in an unbiased manner as opposed to justifying why it was "not their fault".

Another consideration comes with the need to avoid splitting focus. If the project manager "switches hats" to become the Resolver, they will likely be given the latitude to (for example) negotiate financial dispensations. This temporary refocus too often jeopardises their ability to "switchback" to the role of Project Manager. Role clarity becomes an issue as the Customer becomes confused whether they are dealing with "strict contract PM" or "nice PM who gives dispensations".

You might respond to this by saying, "well that's why we have legal services" but again we encounter bias and are being fed details from the project team with a similar perspective to the Project Manager as well as a step-up in intensity with a perceived OTT escalation.

So what can be done?

  1. Structure the role and focus of your Project Managers to the job of delivering the project at hand. As noted above, even if they have the ability to "negotiate"…..role ambiguity can lead to ongoing issues;

  2. Be clear within your PMO processes as to where potential disputes are to be escalated including:

    1. What constitutes a dispute whether it be financial, quality, scope or other;

    2. Any tolerances within to avoid escalating too early; and

    3. The process to escalate

  3. Consider including dispute resolution clauses into your contracts; and

  4. Ensure that dispute review and resolution is handled outside of the project team to remove bias. This can be via a completely separate organisation such as The Project Interceders or through constructing an internal review team of individuals separate from the project team with the authority to be unbiased in their appraisal.

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