Abstract
Upper management support is crucial for the success of a project; their support in sponsoring projects, however, often falls short of what is necessary to ensure project success. Why? Is it ignorance, lack of knowledge about what’s required, distaste for the role, being too busy, or lack of willingness? Well, these may be some of the reasons, but a key ingredient is the ability of project managers to manage upward and effectively negotiate with their sponsors.
Through conversations between a sponsor and a project manager, this paper highlights the steps required in the negotiating process. Pretend you are eavesdropping with a business coach; observe the good, the bad, and the ugly in what happens—or should happen—during negotiations. See how the ten rules of negotiating apply to the dynamics between project managers and sponsors. Appreciate how negotiating skills dramatically enhance the ability to obtain effective sponsorship and sustain sponsorship support all the way through to project success.
Introduction
It is important to begin with a mindset that everything about a project is negotiable and that a project leader needs to be a skilled negotiator. Define project success and establish desired outcomes; review basic negotiation principles, including how to use the four basic forces in every negotiation: power, information, timing, and approach. Understand and use negotiating techniques as a means to moving people from a stalemate situation to a solution; examples help to reinforce and apply these concepts.
Conversations between project managers and sponsors include scenarios that demonstrate:
- When to negotiate
- Necessary preparations
- Applying the ten rules of negotiating
- Courage and fortitude to negotiate through difficult situations
- Creating effective alternatives for reaching successful agreements
- Moving people from ineffective positions to more cooperative and mutually beneficial approaches to issue resolution
- Dealing with project deadlines
- Developing acceptable concessions
- Skillfully using power, information, and timing in a negotiation
- Bringing a negotiation to a successful close
The intent of this paper is to advance the state of excellence around project sponsorship, starting with the imperative for project managers to take the initiative, first by learning the “rules” of negotiation, applying them through continuous dialogue with sponsors (and all other stakeholders), and ultimately leading to improved results from projects, because effective negotiations clarify which and how projects will be implemented.
The overall objectives of this paper include:
- Identifying the negotiating skills required for project managers
- Recognizing the steps required to ensure upper management support for projects
- Applying best practices for negotiating, drawing upon an enhanced tool set
The Negotiation Process
What to Negotiate
The ideal time to negotiate is at the beginning of any endeavor. Before accepting a project assignment, ask the following questions:
- Why are we doing this project?
- What problem is this project solving?
- How was this project selected (e.g. process, criteria)?
- What strategic goal does this project support?
- Are we fully prepared to resource this project?
- What constitutes project success?
When being asked to do the impossible, quickly and with no resources, the project is likely to be in trouble. Most projects, although not quite this bad, come very close. It is not acceptable to be set up for failure; however, it may take a changed mindset—and courage—to engage in negotiations with upper management. The beginning of a project is the time to negotiate all facets relating to the project. Also, make it clear that the intent is creating an environment for successful projects (Graham, & Englund, 2004).
For example, observe this dialogue:
| What is Being Said by the Speaker? | What is Being Thought by the Listener? |
| Sponsor: I asked you here today to get you going on a new project. We have a wonderful opportunity to develop a new product based on the latest technology. You will lead a team to get this product done in time for the next major trade show. | I hear this new technology can do great things, but I don’t know a thing about it. Our department has underperformed in the past, so the pressure is on me to get something new and exciting going on. |
| Project manager: Great, when do we get started? | This sounds exciting, but what the heck is it all about? |
| Sponsor: Right away! | I hope nothing stands in our way. |
| Project manager: I’ll just finish wrapping up my current project and then start as soon as possible. | I want to do this new project, but how can I complete my current long list of tasks that I’m already working on so they are out of the way in time? |
| Sponsor: I’m counting on you! | I sure hope I’ve picked the right person for the job. |
This dialogue appears optimistic and presents a seemingly clear interchange between the two players, but many issues that have not been discussed lie beneath the surface. This is not a good start!
One “rule” of negotiating is to be positive, which, in this dialogue, is no problem. Both sides are positive and optimistic. Even in other situations, when more difficult issues are being presented, a positive attitude (Bucero, 2010) is always helpful, first to establish rapport with the other party and then to elicit cooperation with achieving a resolution.
Two other “rules” of negotiating are to be prepared and be patient. For the project manager, it is difficult to be prepared when first presented with a new opportunity; however, it is possible, to anticipate that situations like these may occur. Being prepared means thinking about what kinds of questions to ask, recognizing the need to temper the emotional excitement that comes with a new opportunity, and also resisting the temptation to accept or commit too early. Personality style may guide typical responses, such as emotionally jumping into something too quickly or being cautious and logical. A guideline is to be patient—take the time to step back, ask questions, and propose a future time to respond.
Another preparation item is to gather information and know the alternatives. What is your alternative to accepting this project? Would you be fired or viewed negatively if you did not accept it? Are you considering another job anyway? What alternatives does the sponsor have? Are there other people capable of doing this project? What would the sponsor do if the project did not happen? Should different projects or approaches to meeting the goal of this project be considered?
One area that did not surface during this interchange is the sponsor’s anxiety about the project. The right-hand column reveals the sponsor’s ignorance about the technology, pressure to perform, concern about obstacles, and uncertainty about the project manager. Exhibit 1 provides background information about how anxieties exist in the health profession. The same behaviors exhibited by the historical figures noted in the exhibit, such as avoidance and obsessions, occur, in a slightly different format, in project sponsors. A sponsor’s unexpressed anxieties can lead to larger issues in the future, such as strange behavior, lukewarm support for the project, or poor decisions made on alternatives to new technology. See Project Sponsorship: Achieving Management Commitment for Project Success (Englund, & Bucero, 2006) for examples of projects without sponsorship and summaries of sponsorship behaviors.
Exhibit 1 – E-mail Newsletter Describing Anxieties
The sponsor’s anxieties reveal a high dependence on the project manager to do well; this situation positions the project manager with a lot of power. Upper-level managers, in general, and sponsors specifically, may lack a thorough understanding about what it takes to do projects. They may be unfamiliar with the process, the means, or the technology; on the other hand, they may be experts in these areas and still want to micromanage the project and then can get in the way.
Either way, it becomes imperative for the project manager to manage upward and engage in negotiations. Because of the intimate knowledge that project managers usually possess about projects and their requisite ability to systematically get things done in a timely manner, they possess the four basic forces that drive successful negotiations: power, information, timing, and approach. With a clear understanding of these forces, the project manager is in a better position to negotiate with the sponsor. The negotiating “rule” to apply is know your status. When assigning a project, the sponsor plays the role of seller and the project manager plays the buyer. In this regard, buyers usually have higher status because they are dependent on buyers to accept their offer. The sponsors’ edge as sellers is that they possess more information about why, what, and how the projects are necessary for the organization. As buyers, project managers are in a position to “nibble” as negotiations near their end. Seek concession for every commitment requested by the sponsor and get something in return for everything given.
Ask More Questions
The dialogue may now proceed differently:
| What is Being Said by the Speaker? | What is Being Thought by the Listener? |
| Sponsor: I asked you here today to get you going on a new project. We have a wonderful opportunity to develop a new product based on the latest technology. You will lead a team to get this product done in time for the next major trade show. | I hear this new technology can do great things, but I don’t know a thing about it. Our department has underperformed in the past, so the pressure is on me to get something new and exciting going on. |
| Project manager: This sounds like a wonderful opportunity. Can you fill me in on more details about how this technology and project were selected? | I’m intrigued but need to know more. |
| Sponsor: Our strategic goal is to be the market leader, and this technology has emerged as the “next big thing.” | I’m sure glad we have a business team to pick through all the noise surrounding new technologies because that’s not one of my strengths. |
| Project manager: What other alternatives have been considered? | I hope I’m not coming across as unsupportive. |
| Sponsor: Our laboratories have conducted a thorough investigation of alternatives, and this is the only one that has commercial feasibility and fits with our goals. | We shouldn’t have to question the decisions made by management. |
| Project manager: Can I think about this project some more and get back to you tomorrow to discuss it further? | I’m worried about jumping in too soon, so I want to check around and think about whether this project is a good fit, both for me and for the organization. |
| Sponsor: Sure. | I wonder why there is a delay. |
This dialogue reveals more information but still leaves some thoughts unanswered. Although the project manager now knows more about the strategic link for the project (good), and has another project added to an already busy agenda (bad), there still remain unexplored areas relating to the sponsor’s inner thoughts (ugly). This area is often left out of the picture or perceived as forbidden territory. However, the relationship between the sponsor and project manager is incomplete without a fuller understanding of what motivates and drives each side. This can lead to conflict and undesirable outcomes down the road.
As another negotiating step, in exchange for the sponsor providing more information about why the project was selected, the project manager asks for more time to consider the proposal.
A very useful negotiating “rule” is to float trial balloons. These are the “what if?” questions that provide answers without making commitments. It is also important to limit your authority when negotiating so that there is an opportunity to check with other experts or take more time and get approval from a higher funding authority. This helps keep the parties from jumping to hasty and ill-conceived solutions.
Digging Deeper
With these negotiating points in mind, let’s see how this dialogue may explore more issues:
| What is Being Said by the Speaker? | What is Being Thought by the Listener? |
| Sponsor: Our strategic goal is to be the market leader, and this technology has emerged as the “next big thing.” | I’m sure glad we have a business team to pick through all the noise surrounding new technologies because that’s not one of my strengths. |
| Project manager: What other alternatives have been considered? | I hope I’m not coming across as unsupportive. |
| Sponsor: Our laboratories conducted a thorough investigation of the alternatives, and this is the only one that has commercial feasibility and fits with our goals. | We shouldn’t have to question the decisions made by management. |
| Project manager: What specifically are we looking for in this technology? | I wonder what the sponsor believes is the right thing to do. |
| Sponsor: You know, I’m not real clear on the details, so I expect the project team to investigate this question. | I have no clue about the technical features; this is the job of the experts we have in this organization. |
| Project manager: In that case, I need to get the right team together. As we start investigating this technology and find that something different may be better, would it be okay to discuss that approach with you? | I’m not the expert either, so I need to limit my authority. We don’t want to get stuck in the difficult position of not being able to deliver. It seems like we have a tremendous responsibility but are on our own. Do we have the leeway to explore other possibilities? Let me check out the answer to this question. |
| Sponsor: By all means, I’d like to get the best possible solution. | This is good, so maybe we won’t get stuck in a failed approach. |
| Project manager: So, in your mind, what would make this a successful project? | Here’s my opportunity to find out more about how the sponsor thinks. |
| Sponsor: The key thing is that we have something to show at the trade show so we are perceived by the market as the leading contender. | My reputation is on the line to meeting our marketing executives’ expectations. |
| Project manager: So, this is a time-constrained project. Is there anything else? | So, schedule is our key constraint. That’s risky with a new technology. |
| Sponsor: Yes, I need to be kept in the loop on the progress, because this is a high-visibility project and extremely important for our organization. | I need to make sure this project goes well. |
| Project manager: Will you be present at our project start-up meeting to share your vision and expectations with the team? Do you want to meet weekly to review the progress? | Okay, so this is really important for the sponsor. I need to get a commitment to follow through. |
| Sponsor: Yes, that’s a good idea. | I’ll have to be much more involved in this project. |
| Project manager: Can I think about this project some more and get back to you tomorrow to discuss it further? | I’m worried about jumping in too soon, so I want to check around and think about whether this project is a good fit, both for me and for the organization. |
| Sponsor: Sure. | I’m starting to feel much better about this person for the project. |
More progress is evident, but several other “rules” of negotiation remain to be covered.
Beginning and End Points
Knowing your opening offer refers to the starting point when putting forth interests that need to be negotiated. A guideline is to have the other side open first, especially when referring to money. The intent is to get the other side to reveal the desired and feasible range of the significant parameters. If a sponsor asks, however, how long a project will take, the preferred response would be to say, “Let me put together a preliminary project plan.” Very often, the sponsor pushes for an initial estimate. The danger in responding too soon is either to over- or underestimate the time. Although the project manager believes this “estimate” is non-binding, the sponsor will remember the initial timeframe as being the “plan.”
For example, a project manager may estimate a project will take between four and six months. If you ask sponsors when they want it, they may respond: “eight months,” in which case there is a cushion. If the project manager was aggressive and quoted “four months” (the bottom line), then there would be no room to negotiate. If a sponsor has no clue and asks for two months, the project manager can open first by quoting six months (the farthest ahead one can reliably quote ) and still have room to negotiate something in between.
Know your bottom line is how high or low is made acceptable. When project sponsors “demand the moon and the stars” when it is not possible to deliver, it is imperative for the project manager to push back, first gently, and then raise the volume if need be, elevating the issue up the management chain. Be careful though: Gather the facts, historical data, convincing arguments, compelling stories, and get a coalition of supporters who can apply persuasive power through their numbers, credibility, and message. Understand the sponsors’ level of risk aversion. Speak the language that sponsors speak, such as business impact, ROI, market share, reputation, customer satisfaction, and so forth. Remind sponsors of past failures that could easily occur again and suggest positive alternative solutions. Avoid the technical details and be transparent; act with authenticity and integrity. These approaches come more naturally when the bottom line is firmly established in the project manager’s mind.
By establishing limits, the project manager knows when to stand firm, negotiate with due diligence, or fall back on other alternatives. Knowing limits will determine whether to continue negotiating or walk away.
In between the beginning and end points of the negotiation process, never reward intimidation tactics. A project manager who does not push back against unreasonable scope, schedules, or resources is training the sponsor to continue a demanding behavior. Instead, set expectations by negotiating the triple constraints at project start-up and when changes occur and make concessions when the other side makes them as well. When a sponsor resorts to intimidation tactics, do not cooperate, do not make concessions, withdraw previous concessions, threaten to walk away, or call a “time-out.”
Achieving Commitments
Negotiating is a fun and productive endeavor. Apply the “rules” as described above and reach closure. Closure occurs when a resolution of a problem is agreed on, a new project with clear objectives and constraints is accepted by both sides, or commitments are achieved on courses of action. Creating the project office: A manager’s guide to leading organizational change. (Englund, Graham, & Dinsmore, 2003) is an example of a concerted effort to manage projects, programs, and portfolios across the organization. This effort may be a massive change for the organization, requiring intense negotiations to adopt, adapt, and apply a change management process.
Exhibit 2 depicts a typical interchange for achieving commitments. A sponsor makes an unreasonable demand, the project manager pushes back to say it cannot be done, negotiations ensue, a set of modified objectives are identified, the project manager confirms that the project is doable, the sponsor approves the project, and the project manager accepts the project. Sponsors need to accept that this interchange is necessary. Some old school “command and control” sponsors may not like this approach, believing that when they issue orders, others should follow and may perceive project managers as being insubordinate. The new school “lead and coach” sponsors accept the interchange as natural. Effective project managers develop and apply skills to pushing back and engaging in collaborative negotiations with sponsors, and both sides apply due diligence in fulfilling mutually satisfying roles.
Exhibit 2 – Interchange Between Sponsor and Project Manager
When the “rules” are not applied, misapplied, or forgotten, a stalemate can occur; neither side is happy or one side “wins,” while the other side “loses.” The goal is to achieve a “win-win” situation (Fisher, & Ury, 1992). Identify clear outcomes and make them happen, and do this in the beginning and throughout the project life cycle.
A Good Outcome
Now, let us observe how the dialogue proceeds using the last set of “rules.” The intent is to work through the emotions and pressures surrounding the proposed project and arrive at an agreement that is acceptable to all parties. This culminates a concerted effort to ensure that discussions with a sponsor productively reach an agreement that both sides are pleased to accept and support willfully. It is not required that the discussion be conflict free or even comfortable. Skill and perseverance are necessary to revealing feelings, assumptions, questions, and concerns that may initially be hidden or missing from a critical thought process.
| What is Being Said by the Speaker? | What is Being Thought by the Listener? |
| Sponsor: When can you get started? | I need to be strong and emphasize how important this project is to me. |
| Project manager: I have a number of questions first. Can we discuss it further? | I’m worried about jumping in too soon, so I need to get a few more issues settled before making any commitments. |
| Sponsor: Well, I need you to get started right away. We’re wasting time that we don’t have. The trade show will happen whether we are ready or not! | This is frustrating! I need to reemphasize how we have to get started now. |
| Project manager: I can’t do much if we don’t have a complete set of requirements and all the resources assigned to the project. | I’m feeling the pressure, but I need to stand firm on following the process steps, as stated in A Guide to the Project Management Body of Knowledge (PMBOK® Guide). |
| Sponsor: We’ll make that happen. Meanwhile, I need your staff and time estimates right now. | Let me turn up the volume! |
| Project manager: Anything I give you now is going to be wrong. | Now I’m feeling intimidated. It’s time to take a firm stand! |
| Sponsor: But I have to get back to the executive committee with an answer. | I see there’s no budging. Let me shift to providing more reasons for the urgency. |
| Project manager: In that case, knowing that the deadline is fixed when the trade show starts, the only estimate I can provide right now is to deliver a minimally functional prototype with a full-time dedicated team that will be ready to start within two weeks. | I need to provide some response. A full-featured project would be extremely risky in this timeframe, but we may be able to do a scaled-down version. Let me find out if this approach is feasible. |
| Sponsor: Okay, that’s a good start. | This is not the answer I wanted, but it’s okay and possibly even better for all parties concerned. |
| Project manager: I will get to work immediately on a project plan that describes what we need to do. Can I get back to you next week for your approval on this plan? | I’m starting to get excited about this project. I’m glad I stood firm on not over committing myself. |
| Sponsor: Yes, I look forward to working with you on this project. | We’ve got a good working situation going on here. |
Summary
Exhibit 3 provides a mindmap that depicts the ten rules of negotiating that are highlighted in this paper. It is not necessary that they be followed in any particular order. As seen in the dialogues, the imperative is to consciously apply the “rules” as they become appropriate throughout each negotiation life cycle. Remember that application of these rules represents the manifestations of four key forces that determine the fate of any negotiation: power, information, timing, and approach.
Exhibit 3 – Mindmap for the Ten Rules of Negotiating
