The PRINCE2 manual states that PRINCE2 is principle- based. This means that each PRINCE2 project should include the 7 principles and if even one of these principles is missing from the project, it cannot be considered a PRINCE2 Project.
I like the following definition of a Principle – Principles provide a framework of good project practice for those involved in a project.
From a PRINCE2 point of view, a Principle is a core value that must always exist in a PRINCE2 project.
There are seven principles and they can be summarized as:
- Ensure continued business justification
- Learn from experience
- Define roles, responsibilities and relationships
- Manage by stages
- Manage by exception
- Focus on products
- Tailor to suit the project
To sum it up, think of principles as guides for good practice.
PRINCE2 7 Principle – Ensure continued Business Justification
A PRINCE2 project has business justification sufficient to warrant investment to initiate the project and ongoing investment through to successful completion. If it does not, it should be stopped.
There must be a justifiable reason for starting a project, and the justification must remain valid and be
revalidated throughout the lifecycle of the project. The business justification drives decision-making to
ensure the project remains aligned with the benefits sought and contributes to business objectives.
Organizations that lack rigour in business justification may find that projects proceed even when there are few real benefits or when a project has only tentative associations with the business strategy.
Poor alignment with business strategy can also result in organizations having a portfolio of projects that have inconsistent or duplicated objectives.
Compulsory projects, such as those driven by legislation or regulation, still require justification for the chosen approach to ensure it represents the best value for money. All parties involved in the project will need a balance between expected benefits, costs, and risks for them to have business justification for their involvement.
The business justification for a project may change; therefore, it is important that what the project is delivering remains consistent with the evolving justification. If continuing with the project can no longer be justified, then it should be stopped and end in a controlled way.
Cancelling a project in these circumstances is a positive contribution to the business as the project’s funds and resources can be reinvested in other more worthwhile projects.
After the project is completed, the project should be reviewed to evaluate if the benefits have materialized sufficiently to warrant the final investment and what lessons can be learned from the project.
PRINCE2 7 Principle – Learn from Experience
A PRINCE2 project team actively seeks, records, and implements improvements as a result of relevant lessons learned from prior projects and throughout the life of the project. It applies them in future projects and shares them for others to apply.
A common characteristic of projects is that they include an element of uniqueness. This makes projects challenging as the temporary team may not have experience of a project quite like the one being undertaken.
To overcome these challenges, project teams need to find ways to learn from the experience of others and from the experience gained from the project as it develops. Learning from experience occurs throughout the lifecycle of the project:
When starting a project:
Previous or similar projects should be reviewed to see if lessons could be applied. If the project is a ‘first’ for the people within the business or if there is any content which is new or novel, then it is even more important to learn from others. This could include projects delivered by people or organizations external to the business to identify relevant lessons.
As the project progresses:
The project team should continue to learn. Lessons should be included in relevant reports and reviews and included at the end of each stage. The goal is to seek opportunities to implement improvements during the life of the project. The retrospective technique is an example of gathering lessons in agile approach.
As the project closes:
The project team should share the insights gained during the project.
PRINCE2 7 Principle – Defined Roles, Responsibilities and Relationships
A PRINCE2 project has defined and agreed roles and responsibilities within an organization structure that engages the business, user, and supplier stakeholder interests. Moreover, a PRINCE2 project management team initiates and builds relationships with and between internal and external stakeholders.
Projects need people. It is important that the right people are involved, and they know what is
expected of them and what they may expect from others in the project.
Successful projects require an understanding of the relationships with and between stakeholders and ongoing activities to strengthen them. This is why ‘People’ is one of the five integrated elements of PRINCE2.
Stakeholders can be individuals or groups within or external to the business.
Stakeholders within the business could be a work council, sustainability board, diversity board, owners, department leaders, or other project teams; stakeholders outside the business could be trade unions,
customers, suppliers, communities, interest groups, banks, or the media.
All projects have the following primary stakeholders: the business, users, and suppliers.
All three stakeholder interests need to be represented effectively in the project management team; this is reflected in the design of a PRINCE2 project board.
Defining roles and responsibilities is particularly challenging as projects are cross-functional, may involve more than one organization, often have a mix of full and part-time resources, and may be spread across multiple locations.
The management structures of the parties involved in the project are likely to be varied, with different priorities, objectives, and interests to protect. The day-to-day line management structures of the business may not be designed for, or suited to, project work.
PRINCE2 7 Principle – Manage By Stages
A PRINCE2 project is planned, monitored, and controlled on a stage-by-stage basis.
A stage is defined as the section of a project that the project manager is managing on behalf of the project board at any one time. The focus on managing by stages ensures that the project is properly initiated before work starts on delivery of the project’s outputs.
Every PRINCE2 project should have at least two stages: an initiation stage and one further stage. Many projects benefit from having more than two stages.
Advantages of managing by stages are:
- it enables adaptability to changes in the project or business context.
- it provides review and decision points, giving the project board opportunities to assess the project’s viability at defined intervals rather than let it continue in an uncontrolled manner.
- it provides the ability to ensure that key decisions are made prior to the detailed work needed to implement them.
- it allows clarification of what the impact will be of an identified external influence, such as the organizational budget setting process or the finalizing of legislation.
- it facilitates the principle of manage by exception by delegating authority to the project manager at each stage.
PRINCE2 7 Principle – Manage by Exception
A PRINCE2 project establishes limits of delegated authority by defining tolerances for performance against its plans.
The definition of Tolerance is the permissible deviation above and below the plan’s target for benefits, cost, time, quality, scope, sustainability, and risk without needing to escalate the deviation to the next level of management.
Tolerance is applied at project, stage, and team levels.
PRINCE2 enables appropriate governance by defining distinct responsibilities for directing, managing, and delivering the project and clearly defining accountability at each level.
Accountability is established by:
- delegating authority from one management level to the next by setting tolerances against the seven aspects of performance (benefits, cost, time, quality, scope, sustainability, and risk) for the respective level (project, stage, team)
- establishing controls so if tolerances are forecast to be exceeded, they are flagged as being an exception and immediately escalated to the next management level for a decision on how to proceed
- establishing an assurance mechanism so that each management level can be confident that the exception controls are effective.
The seven aspects of a plan’s performance requiring tolerances to be defined are:
- benefits: the degree to which it is permissible to underdeliver or overdeliver benefits; for example, the business case for a sales improvement project modelled with a plus or minus two percent range of increased income generation.
- costs: the degree of permissible overspend or underspend against an agreed budget (both person-hours and financial).
- time: the degree to which it is permitted to deliver earlier or later than an agreed target completion date compared to the project plan, stage plan, or work package description.
- quality: how much something can vary from agreed acceptance criteria; for example, a project to produce a new sports watch might have a target that the watch should work underwater to a depth of 50 metres with a permissible tolerance of plus or minus five metres.
- scope: permissible variation of the plan’s products; for example, a project requiring delivery of all the must-have mandatory requirements but permitted to deliver only 60 percent or more of its should-have and could-have requirements.
- sustainability: the degree to which the project product or project activities required to deliver the project can vary from sustainability targets; for example, a new production line that operates within five percent of an emissions target and was delivered using around 70 percent of workforce coming from the local community.
- risk: limits on the plan’s aggregated risks; for example, a tolerance that the cost of aggregated threats must remain less than 10 percent of the agreed budget and that the cost of any single threat must be no more than five percent of the budget.
The implementation of ‘manage by exception’ provides for efficient use of senior management time as it reduces senior managers’ time burden without removing their control. This ensures that decisions are made at the right level in the organization.
The goal is to alert the next management level in the project as early as possible that the work will move outside of agreed tolerances, and a decision is needed on if and how to proceed. The decision-maker can decide to accept the deviation and its consequences or act to remove or reduce it.
PRINCE2 Principle – Focus on Products
A PRINCE2 project focuses on the definition and delivery of products, in particular their user quality expectations and requirements.
A product is defined as an input or output, whether tangible or intangible, that can be described in advance, created, and tested.
PRINCE2 includes four types of products:
- Management products: are often documents or information needed to support the management of the project, such as a business case or a plan.
- Specialist products: are the products that are needed by the user to realize the benefits required of the project.
- The project product: describes the total output from the project as defined in the project product description.
- External products: are products developed or provided outside of the project’s control but which the project is dependent on, for example, the publication of a new standard.
Specialist products will be referred as simply ‘products’, except when a distinction is needed between management and specialist products.
The term ‘project products’ refers to the specialist and management products created during the project.
Projects that focus on what the project needs to produce are more likely to be efficient and avoid waste than projects that focus primarily on the work activity.
This is because the purpose of a project is to fulfill stakeholder expectations in accordance with the business justification. Therefore, there must be a common understanding of the products required and the user quality expectations for them.
The purpose of a project can be interpreted in many different ways, unless there is an explicit understanding of the products to be produced and the criteria against which they will be individually
approved.
PRINCE2 requires projects to be output-oriented rather than work-oriented. PRINCE2 calls these outputs ‘products.
PRINCE2 7 Principle – Tailor to suit the Project Environment
PRINCE2 is applied and tailored to suit the project environment, size, complexity, importance, delivery method, team capability, and level of risk.
PRINCE2’s value is that it is a universal project management method that can be applied to take account of the project’s context, scale or size, delivery method, stakeholder landscape, complexity, importance, team capability, and level of risk.
Furthermore, it can be used for any project type, geography, or culture. It can be used on any project because the method is designed to be applied and tailored to suit each project’s specific needs and context.
The purpose of tailoring is to ensure that:
- the project management method used is appropriate to the project (for example, aligning the method with the business processes that may govern and support the project, such as human resources, finance, and procurement)
- project controls are appropriate to the project’s scale, complexity, importance, delivery method, team capability, and risk (for example, the frequency and formality of reports and reviews).
Tailoring requires the project board and the project manager to make proactive choices and decisions on how PRINCE2 will be applied.
It may also involve adjusting the terminology to match terms used by the organizations involved or replacing some of the PRINCE2 techniques (such as the risk management technique) with alternative procedures such as those already used by the business or supplier(s).
When tailoring PRINCE2, it is important to remember that effective project management requires
information (but not necessarily documents) and decisions (but not necessarily meetings).
If PRINCE2 is not tailored, it is unlikely that the project management effort and management approaches would be appropriate for the needs of the project.
This can lead to inattentive project management at one extreme, where PRINCE2 is followed without question, or ‘heroic’ project management at the other extreme, where PRINCE2 is not really followed at all.
The project manager is responsible for tailoring and will make recommendations having consulted relevant lessons and standards. The project board is accountable and needs to approve the recommendations at the end of the initiation stage and every time there is a proposed change to the management approaches.
How PRINCE2 will be applied and tailored for the particular project is captured in the project initiation documentation. This ensures that all those involved in the project understand how PRINCE2 is to be used and how to carry out their responsibilities.
Care should be taken that the proposed tailoring is consistent with PRINCE2’s seven principles and that the resultant method retains its integrity.
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