Principles overview    

You should know and understand the following syllabus topics:

  • Seven principles
  • Characteristics of a project
1: Continued business justification

Every project should have a solid foundation: the buisness case.
This

  • should be available before actual work in the project is started;
  • should remain viable during the project;
  • should be documented and approved.

The document in which the business justification for a project is recorded is called the Business Case.

Many projects are investments that should fit the strategy of the organisation and should be convincing as to the return on investment that can be achieved. The lack of proper business cases can lead to an incoherent portfolio of projects within the organisation where it is difficult or impossible to decide on the viability of projects on a per project base.

Even projects that are compulsory (e.g. Year 2000 or Legal compliance) should be supported by a Business Case to investigate if the project as defined is the best option to comply with the externally created obligation.

During the mid-1980s, North Korea wanted to change its image by building something massive, something that would be world-renowned. The project would symbolize progress for North Korea and introduce new, Western investors. The decision was made to build a hotel that was taller than any in the world, and in 1987 construction on the Ryugyong Hotel began. It was intended to be completed in 1989, in time for the 13th World Festival of Youth and Students, but developers would face nearly every conceivable hurdle, and by 1992 the project was abandoned.

In an effort to attract Western dollars, North Koreans drew up plans for a 105 floor hotel - the largest in the world - and promised a complete laissez-faire attitude in terms of oversight of the construction and planned hotel activities. Casinos, nightclubs, and fancy restaurants were encouraged. When the project was planned, the estimated cost to build the “largest hotel in the world” would be around $230 million.

Construction began in 1987, but by 1992 numerous delays and problems had driven the cost up to over $750 million, or 2% of North Korea's entire GDP. The building finally reached its full architectural height by 1992, but a broke government and a lack of foreign investors meant the project would be abandoned before completion. Had the hotel been finished as originally planned, it would have stood as the tallest hotel and the seventh tallest building in the world.

In fact, the unfinished Ryugyong was not surpassed in height by another hotel until 2009.

2: Learn from experience

Projecten zijn uit hun aard uniek, als het routinewerk zou zijn zou het beter als reguliere lijnactiviteit uitgevoerd kunnen worden! Juist hierdoor worden projecten vaak voor uitdagingen gesteld in organisatie en (technische) uitvoering. Het advies van PRINCE2 is daarom te onderzoeken of er wellicht al eerdere ervaringen zijn opgedaan op de gebieden waarop het project zich beweegt.

Eleven well known mistakes in projects

  1. Not assigning the right person to manage the project.
  2. Failing to get everyone on the team behind the project.
  3. Not getting executive buy-in.
  4. Lack of (regular) communication/meetings.
  5. Not being specific enough with the scope/allowing the scope to frequently change.
  6. Providing Aggressive/Overly Optimistic Timelines.
  7. Not being flexible.
  8. Not having a system in place for approving and tracking changes.
  9. Micromanaging projects.
  10. expecting software to solve all your project management issues.
  11. Not having a metric for defining success.

Routine and Experience

soorten werk

Work can basically be organized in three ways:

  1. In routine work is allways based on experience: there is one way which works best;
  2. In improvisation what works and what not is discovered along the road;
  3. In projects this exploration fase should be as short as possible, and therefore it is advisable to gather knowledge on best practices before the works starts.

By their nature projects are unique, if it was a mere routine undertaking we would rather see the work performed as "business as usual". This uniqueness creates challenges in organisation, control and (technical) execution. PRINCE2 advises to examine if perhaps we have prior experiences in areas where the current project will be undertaken.

Therefore look for previous experiences:

  • At project startup: Has something similar been done before in our organisation? If not: can we learn from other organisations?
  • During Execution: collect and document experience gathered during the project for use in later stages of the project.
  • At project closure: Projects should share their lessons learned with the organisation at large. Lessons that are identified but not shared do not contribute to the development of the organisation.
    PRINCE2 insists on all project members actively contributing to lessons learned!

PRINCE2 stresses the importance of all project members actively seeking new lessons to be learned.

3: Defined roles and responsibilities

Projects are carried out by human beings…. Good planning and control will not work if people do not know what is expected of them, or what their exact responsibilities are. Furthermore: projects are often set in a complex organisatorial context, where more than one department or even several organisations are involved. It is obvious that conflicts of interests can be the order of the day!

The normal hierarchy in the organisation is not designed for projects and therefore, for a succesful project, carefull design of it's organisation, with a view to it's place in the host organisation, is a must.

The PRINCE2 approach to organisation is based on interests: in the project all stakeholders should be involved in a proper way and be represented in the project management team.

stakeholders

Three interests, three Stakeholders

  1. Business
    Must support the project'ss goals and assure that the project gives "value for money".

  2. Users
    Will use the deliverables from the project in the operation to create the benefits.
  3. Suppliers
    Must supply resources and expertise to develop the products of the project.
4: Manage by stages

People rarely have an overview of large matters: big amounts of money, many activities, many risks. What we as human beings are better capable of is chunking: small may be beautifull, it certainly is surveyable. Predicting the future is also better feasible for a short period.

In projects this is also true. Therefore PRINCE2 advises to divide the project in smaller parts that are linearely sequenced in time. Doing this we divide the project in "Stages". The end of each stage gives a natural break to take stock: what is the project's status in terms of progress against planning, expenditure against forecasted budget. What is the risk status, and last but not least: is the project still viable?

In dividing the project in stages it is of the essence to find the correct balance: many short stages give the Project Board more control, but demand more effort on their part. On the other hand: with longer stages there are fewer moments the Project Board can evaluate the project's status.

PRINCE2 advises to:

  • Divide the project into a number of management stages;
  • Make a global plan for the whole project and detailed plans for the stages as they present themselves;
  • Plan, delegate and monitor per stage;

Each project should have at least two stages: one for planning, one for execution.

gate

After each stage in a project the door to the next stage is "ajar". The project should prove it is sound to proceed!

Here it is important to establish if:

  • The business case is still viable;
  • The risks are still under control;
  • The next stage can indeed be planned in detail.
5: Manage by exception

No single project proceeds as planned. When no arrangements have been made about the handling of deviations from planning, the management of the project will become unworkable. In a PRINCE2 environment there will be three levels (Project Board, Project Manager, and the performers of the actual work) where authority on handling deviations will be determined. Authority to decide and act will be determined through:

  • Delegation between the various levels of management within the project. For each level the tolerance for deviation from the established plan will be determined. Tolerance for deviation can be established for each of the six parametersthat need to be controlled. For the parameter cost for instance it could be determined that the Project Manager can over- or underspend 10% without the need for escalation;
  • Establish a procedure for escalation that is activated as soon as one of the established tolerances is threatened;
  • A mechanism to assure that the project manager "plays by the rules" so the higher level of management in the project (the Project Board) can rest assured that the established procedures will be adhered to.
 
exception

"What, 1 euro over budget?!"

By using this form of management the call on the time of senior management is reduced considerably, while keeping them well positioned to govern the project.
6: Focus on products

The generic term PRINCE2 uses for the deliverables of the project is "product". In the project it is all about delivering the products and to a much lesser extend about the activities! That is why PRINCE2 advises to focus on products while planning the project. The products constitute the scope of the project (everything that is to be realised) and are a basis for planning and control.

By "thinking products" it is much easier to agree with the users on the project: unambiguous, user approved descriptions of the products contribute to a large extend that the project in the end will deliver usefull results that will help to realise the Business Case. For defining products PRINCE2 proposes a convenient format, the Product Description, which is used to define every product in such a way that no doubt can arise about what is to be delivered and to what criteria it should perform.

 

producten

Advantages

Focus on products has several advantages:

  • Solid base for acceptance;
  • Contributes to satisfaction of users and customers;
  • Underpins all discussions on scope and changes.
7: Tailor to suit the environment
PINO: Prince In Name Only

When applying PRINCE2 two types of error are generally made: too rigid, leading to a bureaucratic and inflexible way of working and too lax, which results in PINO: Prince In Name Only.
A major advantage of PRINCE2 is it's generic and flexible design with an eye on adaptation all along.

Tailoring serves two ends:

  1. Adapt the method to the wishes and demands (and capabilities) of the organisation which hosts the project. Connection to existing organisational processes (e.g. finance, purchasing) will support the practical usability of PRINCE2.
  2. Adapt the controls to the scale, complexity and level of risk in the project. A multimillion project, covering a number of countries has different needs in the area of reporting, communication and formality than € 50.000,- project within one department.

The specific way PRINCE2 will be applied in the context of the organisation will be recorded in the Project Initiation Documentation.

confucius

About principles

Obey the principles without being bound by them.
(Bruce Lee)


He who merely knows the right principles is not equal to him
who loves them.
(Confucius)