Article Overview

In this article, we are going to cover topics such as accountability and responsibility, as well as the importance of taking ownership of the project.  


Table of Contents 

  1. Accountable vs Responsible
  2. Ownership
  3. Procurement
  4. Ownership Example
  5. Closing

Accountable vs Responsible

Projects are led by Project Managers, one reason for that is to have single-point accountability. Accountable and Responsible seem to be interchangeable in the business work. Here is how each word should be viewed.

The accountable person is the individual who is ultimately answerable for the activity or decision. This includes “yes” or “no” authority and veto power. Only one accountable person can be assigned to an action. The responsible person is the individual(s) who actually complete the task1.  

Ownership

The project manager owns the execution of the project per the project plan and everything leading up to it. Shouldn’t the PM have input into the initial contract with the client? Usually, the salesperson and general manager/office manager negotiate the work with the client. Finally, when everything is agreed to, and presumably when a contract is signed, it is handed over to the project manager.  It is now time to begin, or is it?  This is not to say a PM wasn’t involved with the development of scope & estimate, even the selection of the supplier should ideally include the project manager.  However, rarely is the PM involved with completing the contract, ensuring deliverables and expectations are defined clearly and objectively and have not morphed over the interim before the contract signing.

Procurement

The Project Manager (PM) is accountable for the budget, and ensuring the scope is well articulated and what constitutes good quality. The PM tracks commitments, including contracts and purchases. The PM verifies the commitments match the budget or estimates, usually after the fact. So, why is it that PMs rarely approve or rarely see the initial contract or purchase orders?

The project manager at a minimum should review the first purchase orders issued for a project. Budget estimates may not include any fees or shipping costs, and this may erode the business case for the project, as project costs may trend higher due to actual purchases.

The project manager should not tell buyers how to do their job but should be involved with any negotiations on price and/or delivery. Remember the PM owns the budget and the schedule, and the contract signing content and date may have serious implications on the project.
Should there be a problem with any purchase the buyer should include the project manager to resolve, even if the project manager is not able to resolve, they should be aware so as to take appropriate actions. Again, the PM owns the budget and the schedule, if the event can impact the cost or delivery, the project manager must know.

Ownership Example

A piece of equipment arrived at the client’s plant. The crate was very slightly damaged. The crate was slowly disassembled and the legs of the equipment inside had been broken. The buyer said they were going to call the fabricator. The PM insisted on sitting in on the call. The supplier’s rep told us one of the shipments was sent by train and the other was delivered by truck. It was the one delivered by a truck that was damaged.

Why were two shipping methods used? The second shipment was falling behind schedule so it was shipped by train to get to the plant faster, making uptime. The supplier admitted the truck shipment was dropped but since the crate was only marginally damaged the decision was made to ship it anyway.

The supplier and the buyer were negotiating the repair when the PM interrupted. First, the supplier would pay for shipping back to their facility to fix. The supplier would have 7 days from pick-up to return to the plant. The supplier would also pay for one of our engineers to fly (round trip & expenses) to their facility to monitor the repair and crating. The shipment would not be released without the on-site engineer’s approval.

The buyer was very unhappy. Muting the call, he said, “you can’t tell them to do that!” The PM replied, “Yes, I can. I am negotiating.”  The supplier agreed to all of the conditions and asked how soon could the equipment be picked up? The buyer was taking the notes during the call and a verifying email was sent to the supplier’s rep for signature.
The point here is the Buyer is a team member and has a role to execute based on company procurement policies. Whereas, the PM owns the project and has to deliver. Any impediments to success are on his/her shoulders. There is no money in a project budget for repairs to new equipment, particularly caused by someone else. It is said in negotiations; shoot for the stars but are willing to settle on the moon. And on occasion, you can get the stars.

Consider the following story which is an example from a colleague, but we have likewise seen this in our work over the decades.  The project scope is known, a plan is put together, and essentially, we await the signing of the contract.  The details of the contract have been known for weeks or longer during the negotiations.  Now down to the signing of the contract, there is reticence regarding the signing.  It turns out the supplier’s payment expectations are different than the customers, in this case, the difference between net 45 and net 30.  This means payment after an invoice is submitted, the customer’s system is set up for a net 45, but the supplier is set up for net 30.   This is a difference of 30 days, this means the supplier gets paid for the work 15 days longer than expected, which results in the supplier carrying any debt incurred and associated interest rate impact by the supplier.  

Now, when the team should be setting about starting the work, but this difference of 30 days has been noticed and requires resolution.  Is this worth holding up the project?  Is the difference in the payment terms, 15 days, or even 30, worth the risk in the project not delivering the end results by two or more weeks? Once a project is late, there are few actions we can take to bring it back under control.  Many of these actions will increase cost, and some will reduce the scope, which will mean the customer will have to sacrifice some of the expected features or performance.

Closing

All Companies have procurement policies and Terms & Conditions established to meet legal, regulatory, and to protect the company. We don’t suggest that these policies are flexible or should be worked around by a PM. On occasion circumstances and situations arise where the PM must take charge, insert themselves into procurement activities and negotiate a resolution to protect the project which ultimately protects the client and the company.

 


References:
[1]  Marom, Shim  “Accountability vs Responsibility in Project Management”, workfront.com, 5/7/2018,