Our Experience Has Been That External Project Managers Are Just “Middlemen” Passing Paperwork Along

Typically, project managers are often seen as a postbox service, whereby the contractor sticks in a message and the PM tosses that message up to the client, saying, “Hey, we've got this from the contractor. What would you like us to do?” and then delivers the client’s message back to the contractor.

A good project manager understands that they are not being paid to pass messages from person to person. The project manager’s role is to filter out all the extraneous “noise” that comes along with a project. Understanding and managing the minutiae is crucial to the smooth running of the project, but it does not need to be passed on to the client. A good PM ensures the client is presented only with the key information needed to make a decision.

The client’s job is not to go through every single detail of the project. They engage an external project manager in order to downstream. This means that a good PM won’t waste the client's time by filling up their inbox with every tiny piece of information so that the client is required to make endless immaterial decisions that take up valuable time and headspace.

Delegation And Clarification

Right from the outset, a keystone of the relationship between the client and their project manager is to ensure the client formally delegates accountability or responsibility to their PM. The client will do themselves a massive injustice if they don't empower the project manager to act on their behalf and to actually make decisions.

This may sound like common sense, but it can be very challenging for some clients. This is for the simple reason that delegating responsibility in this way means the project manager is spending the client's money. Trust between the client and the project manager is therefore essential, prior to bringing on any suppliers or commencing physical works.?

The reality is that, if clients are not prepared to formally delegate responsibility, they are forcing their project manager into a middleman role. This then poses the question, “Why would you get an external PM if you’re not going to empower them to do their job?”

Prior to commencing any works, the project manager and the client need to be extremely clear about the delegation of authority on the project. Who has control over money? Who has control over specific aspects of decision-making? An inexperienced project manager may be unwilling to have these conversations with their client because a common notion is that the PM is there to work for the client—i.e., they should do whatever the client says.

The problem with this way of seeing things is that the client is not experienced in running projects. That is why they engage a project manager. They need someone who is an expert in the field. If that expert is then not given the authority to do their job, the client is not going to get the benefit of their service.

Of course, the client is always in control. The point is that the project manager needs to be able to go to the client and say that there are specific things the client needs to make decisions on. At any one time, there are likely to be multiple issues going on at a construction site; however, it is unlikely that the client needs to know about every single thing. Many of the issues that arise in a construction site can be directly managed by the PM, and so it's the PM's responsibility to manage those issues and not waste the client's time.

Analysis Paralysis

By continually going to the client with every little issue, the project manager is likely to overwhelm their client. If this happens the client can become paralysed and unable to make decisions effectively or in a timely fashion. The project world is outside most clients’ comfort zone. It’s unfamiliar territory, and so they're not going to be able to perform very well in that space.

Project management is outcome-focused, so the methodology is irrelevant. The client doesn’t need to know how the project manager achieves the outcome—they just need the PM to get them there. Of course, in order to feel confident in delegating responsibility, the escalation process really matters and is something that needs to feature in all projects.

Delegation And Escalation

What are the limits that dictate when an issue becomes too hot for the project manager to handle? At what point do things need to be raised up to the client or potentially even beyond the direct contact to deeper levels within the client's organisation?

Being clear about the answers to these questions is the reason why an escalation protocol or procedure is essential for any project. It establishes a common understanding of how the project will operate. What is the delegation of the project manager’s authority? If the project has variations of $200,000, but the PM's authority only extends to $150,000, getting clearance to fund those variations is going to be escalated.

So the escalation acts as the filter for project managers, in terms of what gets presented to the client and what the project manager handles independently of the client.

Keeping Things Moving

It is an unfortunate truth that some project managers don’t ask for authority or don't have the confidence of the client to act in that capacity, or the client's core processes don't align with how the project should be delivered.

For instance, many clients will have a process whereby they have a contingency of $100,000, and if anybody ever needs to use that contingency, it has to be escalated to the director or someone who is largely disconnected from the project.

When it comes to a project, it could be that only $5 is required from the contingency fund, or it could be that the entire $100,000 is needed. Regardless of the figure, if the project manager needs access to the contingency, the process must be followed. This can waste valuable time, and wasting time can cost a great deal of money. For this reason, it's key that when corporates undertake projects of a different style to their core operations, they revisit their internal processes to benefit the project.

Case Study – Delay Damages

Despite our advice, a client was adamant that, if any potential variation occurred to the cost, the client had to be informed before any works could continue and then had to make a decision around that.

During the project, we hit a condition inside the ground that wasn't expected. The soil material was found to contain some loose asbestos and needed to be remediated before building could recommence. In order to resolve the problem, we had to engage a hygienist and specialist asbestos removal personnel to safely manage the removal and disposal of the asbestos. The workforce doing the civil works was already on-site, and it was going to cost a certain amount of money every day to keep them on-site until the asbestos had been removed.

This meant that a quick decision was imperative, to ensure that we could minimise delay and continue the project without additional costs ballooning. However, because the client had not provided us with any financial delegation, the matter was out of our hands.

It ended up taking three weeks for the client to make a decision, due to their cumbersome internal approval processes. The costs of delay far exceeded the costs required to remove and dispose of the asbestos. It wasn't until the client experienced this that they understood everything we had been advising them was in their own interests. Once this became apparent, they gave us delegation to act on their behalf from both a financial and a contractual perspective.

They had to go through that pain and suffering before truly appreciating that, if the project manager has responsibility delegated to them, the client will benefit greatly.

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