This isn’t likely something that will come up often in your project management experiences, but you need to be aware of it because if it does become an issue it can have some serious consequences.  What I’m referring to is any conflicts of interest that might come up on the engagements you’re managing. 

A conflict of interest is when your personal interests are put above the interests of the project or when you use your influence to cause others to make decisions in your favor without regard for the project outcome. In other words, your personal interests take precedence over your professional obligation, and you make decisions that allow you to personally benefit regardless of the outcome of the project. Where these can be particularly disastrous is on government contracting situations where the competition is fierce and companies who lose out on a multi-million dollar contract award are looking for any reason to protest a contract award decision.

Let’s look a three key potential areas of conflicts of interest:

Associations and Affiliations

Associations we have with individuals and affiliations that we have with organizations can be sources of conflicts of interest.  If you have a relative who owns a software vendor and that vendor is ultimately selected as the software source for your project, you have a conflict of interest – even if there was no special treatment given or no intentionally favorable decision made.

The proper thing to do in situations like this is to let individuals on the project at the customer site and in your company know of your affiliation or relationship so that decisions can be made jointly on how to handle the process.  Likely, you need to step out of any part of the decision-making process and you must document how the process was handled so as to keep yourself and the company out of trouble should questions arise later on.

Vendor Gifts

Companies often have a policy against accepting gifts from vendors over a certain dollar amount.  And if you’re dealing with a government agency, there are often actual legal implications of accepting – or giving – any gift or service valued over a certain dollar amount.

Accepting vendor gifts

If a gift is given to you or you know of a gift given to the vendor by someone and in either case it is larger than what is acceptable, you must comply with policies and let your senior management know.  Just as athletes put their scholarships and their athletic programs in jeopardy when inappropriate gifts are accepted, you can put your organization and your project in peril by not following the proper guidelines.

Stakeholder Influence

Another potential area for conflict of interest comes from stakeholders.  Stakeholders are usually individuals with a good deal of authority and an important position in the company. Make certain you are not putting your own personal interests above the interests of the project when you’re dealing with powerful stakeholders. They may have the ability to promote you or reward you in other ways. That’s not a bad thing, but if you let that get in the way of the project or let a stakeholder twist your arm with promises like this, you’re getting close to a conflict of interest. Always weigh your decisions with the objectives of the project and the organization in mind, not your own personal gain.