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PRINCE2 principles

by PRINCE2 Online
Master the seven essential PRINCE2 principles to enhance your project management skills and prepare for your exam.
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PRINCE2 principles | prince2-online.co.uk

Introduction to PRINCE2 principles

The PRINCE2 framework is recognised globally for its structured approach to project management. It’s designed to be comprehensive yet flexible enough to adapt to any project’s unique demands.

Central to its methodology are the seven PRINCE2 principles, which serve as the foundation for successful project delivery, applicable to a variety of industries and project scopes. Aspiring professionals aiming for the PRINCE2 Foundation certification must grasp these principles thoroughly, as they are pivotal in understanding the essence of PRINCE2’s approach to managing projects effectively.

Overview of PRINCE2 principles | prince2-online.co.uk

The 7 principles in PRINCE2 are:

Understanding these principles is not just about passing an exam; it’s about equipping oneself with a mindset and tools that are essential in today’s project environments. As part of a suite of study guides, this article lays out the groundwork for mastering the PRINCE2 principles in preparation for the PRINCE2 Foundation course and the subsequent exam. It also serves as your companion in the practical application of PRINCE2 to everyday project challenges.

As the project management landscape evolves, PRINCE2 continues to advance. The latest updates, reflected in the 7th edition released in 2023, incorporate contemporary developments in project management. It’s advisable to familiarise yourself with these updates by exploring all the study guides related to PRINCE2 – practices, processes, people, and the project context.

Ensure continued business justification

A project must always prove its worth, from inception to delivery. For PRINCE2, this is encapsulated in the principle of continued business justification. The idea here is straightforward: if a project cannot maintain its balance of costs, risks, and benefits to remain both viable and desirable, then it should not proceed. It’s not enough to justify a project at the start; its business case must be reassessed constantly as the project moves forward.

Continued business justification - PRINCE2 principle | prince2-online.co.uk

The business case is the lifeblood of the project, containing key reasons for its initiation and the expected measurable benefits. It’s continuously updated to reflect changes in the project’s environment that may affect its outcome. Be it economic shifts, such as the COVID pandemic lockdown, or changes in market conditions, the business case must stand resilient, justifying the project’s existence at every stage. If benefits fall below set tolerances, it’s a signal to reassess or even halt the project.

Evaluating business viability

The project’s viability is tested at each stage. A project manager must provide updates to the project board at the end of each stage, furnishing details that inform critical go/no-go decisions. When circumstances change to the point where the expected benefits are unlikely to be realised, the responsible action may be to close the project prematurely.

Yet, justification isn’t always about financial returns. Projects with social or environmental objectives, such as installing safety systems in buildings, may have justifications beyond the financial aspect. They could encompass broader societal benefits like safety and well-being, which must be measured and assessed against the project’s goals and tolerances.

Learn from experience

Humans have a tendency to circle back to familiar mistakes, a pattern that PRINCE2 seeks to disrupt by elevating the practice of learning from experience to the level of a principle. A project manager in the PRINCE2 framework stays vigilant and actively seeks out lessons throughout the lifecycle of a project. This proactive learning stance ensures that knowledge is captured, managed, and shared effectively.

Learn from experience - PRINCE2 principle | prince2-online.co.uk

Documenting and applying lessons from past projects is just as crucial as adapting to new information. The initial steps of starting a project in PRINCE2 involve reviewing a lessons log, ensuring that insights from previous endeavours are considered. Every stage should contribute new learnings to this repository, which then becomes a valuable asset not only for the current project but also for future ones.

Building a culture of continuous learning

It is a project manager’s duty to record lessons identified during the project. They must then be communicated through lessons reports to the project board, which then disseminates these insights across the organisation, fostering a culture of continuous improvement. Assurance auditors may seek evidence of this continuous learning process, demonstrating a firm’s commitment to adhering to PRINCE2’s principles.

Internalising lessons isn’t just about documentation; it’s about action. Adjusting strategies in response to new insights, hiring experienced individuals, or purchasing relevant documentation are all concrete steps to leverage past knowledge. An effective project management office (PMO) will maintain a lessons repository to ensure that the collective wisdom from past projects is accessible and actionable.

Define roles, responsibilities, and relationships

Clarity is king in project management, and PRINCE2 underscores this through its principle to define roles, responsibilities, and relationships clearly. In a well-managed PRINCE2 project, there’s no ambiguity about each team member’s contributions and duties. Defined roles and responsibilities help prevent common pitfalls, such as a lack of clear leadership or murky accountability, which can cause projects to falter or fail.

Define roles, responsibilities, and relationships - PRINCE2 principle | prince2-online.co.uk

A structured hierarchy ensures that responsibilities are cascaded down from the project board, through the project manager, to the team managers and members. This delineation of roles covers the project’s managerial spectrum, ensuring that each level of management is empowered to act within their designated sphere of influence.

Optimising team dynamics

For both large and small projects, the formation of the project board is critical. In PRINCE2, the project board is the apex of the decision-making hierarchy and represents three key roles: executive, senior user, and senior supplier. Each role is tailored to represent business, user, and supplier interests, respectively. This triad ensures balanced decision-making that considers the full spectrum of project stakeholder concerns.

When the size and complexity of a project grow, the project board may evolve accordingly, drawing in a wider range of expertise and perspectives. This flexibility in the composition of the project board is a hallmark of PRINCE2’s adaptability.

Manage by exception

The manage by exception principle in PRINCE2 is all about efficiency. By establishing clear tolerances for project objectives – such as time, cost, quality, scope, risk, and benefits – PRINCE2 projects define the limits of delegated authority, empowering managers to act decisively when necessary and only when necessary.

Manage by exception - PRINCE2 principle | prince2-online.co.uk

Regular highlight reports keep the project board in the loop on progress, sparing them from the nitty-gritty details of daily project management. This high-level oversight ensures that the board steps in only when an issue threatens to breach the agreed tolerances, known as an exception. The ensuing decision-making process is then streamlined and focused.

Navigating tolerances and exceptions

Setting and managing project tolerances is woven into the fabric of the PRINCE2 methodology. These are established at the outset and can only be altered by the project’s sponsor, often referred to as the business layer. If a deviation from a project-level tolerance arises, it’s escalated for a decision.

At a granular level, stage and work package tolerances are managed by the project manager, who is responsible for acting on issues that don’t threaten to breach stage tolerances. Should an issue escalate to the point of jeopardising stage tolerances, an exception report is created, and the matter is raised with the project board.

The advantage of managing by exception is clear: it maximises the efficiency of senior management’s involvement in the project, ensuring their attention is focused only on the most critical decision points.

Manage by stages

PRINCE2 divides projects into stages, creating natural checkpoints for evaluation and decision-making. This principle ensures that the project is thoroughly planned during the initiation stage and that subsequent stages are monitored and controlled effectively.

Manage by stages - PRINCE2 principle | prince2-online.co.uk

It is during the initiation stage that the groundwork is laid out – a thorough, detailed plan that accounts for all project variables. Skipping this step can lead to misjudged costs and timelines, hence the insistence on a dedicated initiation stage. This is followed by the delivery stages, where the actual work of the project takes place.

Assessing viability at each stage

The initiation stage concludes with the project initiation documentation (PID), a comprehensive dossier that the project board examines to evaluate the project’s viability. The PID serves as the reference point for the project’s commitment to proceed.

Each subsequent stage of the project acts as a decision point. The project board reviews the updated project plan and determines whether the project should continue or be shut down if it’s no longer viable. These decision points are crucial for managing investment and risk – they allow for stage-by-stage investment decisions, which are inherently less risky than a one-time, all-in commitment.

Managing by stages also ensures that the project board has the most up-to-date information, which is essential for making informed decisions about the project’s future. By reviewing actuals from the current stage and forecasts for the remainder, the board can confidently assess the ongoing viability of the project.

Focus on products

Success in project management is measured by the quality of deliverables, and PRINCE2’s focus on products underscores this truth. Meeting or exceeding the established quality criteria for products is a direct path to achieving the intended benefits and satisfying stakeholders’ expectations.

Focus on products - PRINCE2 principle | prince2-online.co.uk

This product-focused approach is what sets PRINCE2 apart; rather than dwelling on activities, the methodology prioritises the identification and delivery of the project’s products. By adopting product-based planning, the project team is better positioned to manage scope and avoid issues related to acceptance and user satisfaction.

Creating shared understanding through product descriptions

In PRINCE2, products are meticulously described and agreed upon. These product descriptions clarify the purpose, composition, and quality criteria for each deliverable, laying a foundation for understanding and agreement amongst all project participants. They guide the estimation of work, resource allocation, and the steps necessary to bring each product to completion.

By defining the project’s deliverables clearly, PRINCE2 ensures that all stakeholders are aligned on what constitutes project scope, success, and the criteria for product acceptance. This clarity is instrumental for planning and controlling project work with precision.

Tailor to suit the project

The final PRINCE2 principle celebrates the framework’s versatility. Each project is a unique endeavour, with its own cultural, geographic, and risk considerations. The ability to tailor PRINCE2 to fit these specifics while still adhering to its methodology is one of its most valuable characteristics.

Tailor to suit the project - PRINCE2 principle | prince2-online.co.uk

A frequent application of tailoring involves the periodicity of project board meetings. While PRINCE2 itself doesn’t mandate these meetings, they can be incorporated if they’re part of an organisation’s culture. It’s critical to document any such adaptations in the project initiation documentation (PID) to provide a clear audit trail and demonstrate compliance with the PRINCE2 methodology.

Avoiding the pitfalls of over-customisation

It’s essential to remember that tailoring doesn’t mean omitting elements of PRINCE2. Even in small projects, aspects such as risk, quality, and change must be managed. Over-tailoring risks running a project in name only—a ‘PINO’ project. Organisations can measure their adherence to PRINCE2 through the PRINCE2 Maturity Model to ensure they’re not straying too far from the methodology’s principles.

The goal of tailoring is to make the PRINCE2 methodology work for the project, not to enforce a rigid, template-driven approach. By adapting the methodology judiciously, project managers can ensure that decisions are based on timely information and authority is appropriately delegated.

Embracing PRINCE2 principles

In summary, the seven PRINCE2 principles form the bedrock of a methodical and adaptable approach to project management. While some organisations may claim to employ PRINCE2, only those that apply all seven principles are fully harnessing its power. These principles are not set in stone but are intended to be practical guides that can be adaptably applied to any project, no matter its type, scale, or complexity.

As a project manager, applying PRINCE2 principles judiciously can lead to the most significant benefits, enhancing not only the success of your projects but also advancing your career in project management. The PRINCE2 methodology remains the most popular project management approach globally, and by mastering its principles, you position yourself at the forefront of the field.

For further insights on how PRINCE2 can bolster your career, consider exploring how PRINCE2 qualifications can help your career.

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