Management products will be mentioned in the following sections – it may be an idea to refer to these in Appendix A of the PRINCE2 manual as you read through. All Management products are shown in italic
Management by Exception
Management by Exception is the term used to describe the delegated method of working within a PRINCE2 Project Management Team. Traditional project management practice has foundered to some extent on the inability of the PM to make decisions which are outside their level of authority. For instance, the PM usually has no Line Management authority over the project resources and so cannot enforce any instruction. What was needed was a new stratum of Management within the project, composed of people who did have the requisite authority and hence we now have the Project Board.
However, given the level of authority needed, the people suitable to be Project Board members within an organisation tend to come from the Middle, Senior or Executive management levels and are busy people in their own right. One thing they cannot do is to be present 24/7 on your project to make day-to-day decisions – that is the PM’s job. What they can do is to agree to be available for such things as major review points (eg Stage boundaries) and also for exception conditions as they arise. This allows them to make the major decisions demanded by the project whilst leaving the more prosaic decisions to those lower down the team.
Clearly there are many factors which enable this approach within a PRINCE2 project, and the first is the overall Process Model. There are separate main processes for the PB, the PM and the TM, these being Directing a Project (DP), Controlling a Stage (CS) and Managing Product Delivery (MP). These processes clearly separate out the responsibilities of each role and, as such, are complemented by the role definitions of the PB members, the PM and TMs. The Process and Organisation pictures in PRINCE2 therefore allow the delegation which we see between PB/PM and PM/TM.
This delegation can only work if there are clear controls in place to ensure that a given management level cannot drift too far off what is required before the next level up get involved.
The first major controls exercised by the PB will be the setting of Stage Boundaries (which dictates how long the PM can operate for without a major project review by the PB) and the subsequent approval of ALL Stage Plans (which confirms the allocation of the planned resource to the Stage under consideration – something the PB members have the authority to do, but which the PM usually does not).
Another example of this from the PB’s perspective is Stage tolerance(s). Tolerances dictate the degree of decision-making freedom the PM has before he/she has to ask the PB for guidance. If the PM is keeping the Stage within tolerances, then there will be no need to ask the PB for additional guidance. The PB will also be satisfied with this state of affairs since the PM is keeping the project within the limits they have set, thus freeing them to do their day jobs. Of course the PB will require on-going assurance that these limits are, indeed, being maintained and this is where the Highlight Report comes in. The PB will also invoke their Project Assurance roles as they see fit during the project, to ensure that the project really is delivering to its objectives.
If any of the Stage tolerances given by the PB are under threat, then the PM must produce an Exception Report and await the PB’s decision on what to do next (although the PM will have made recommendations within the report). The PB may request an Exception Plan (to see how the recommendations pan out in terms of deadlines and resource usage for instance, but also to examine the effect of that plan on the Business Case). Of course the PB may also at this point simply instruct the PM to close the project down – the report itself was enough to frighten them off without any need to see a plan!
All the above measures provide for Management by Exception between the PB/PM, but the same principle can be extended to the PM/TM relationship.
The PM gives the TM a discrete piece of work to perform by authorising a Work Package (like the PB giving a PM a Stage). The PM hands down a portion of the Stage tolerances to each TM, thus generating the same conditions for this relationship as for the PB/PM relationship. Now the TM is in a position to make his or her own decisions within the limits (tolerances) set, and only needs to invoke higher authority (the PM) when those limits look likely to be breached. Regular reporting is still required to the PM, and, in this case, is handled by the regular delivery (as specified by the PM) of a Checkpoint Report. A method for reporting Work Package deviations (tolerance breaches) will also have been documented within the Work Package itself, and this should be actioned by the TM as needed.
It is worth pointing out that the same conditions apply between the highest levels of the project – ie between the Project Board and Corporate/Programme Management – don’t forget that Project tolerances are handed down to the PB by this highest level of management. The PB can only operate within these tolerances or else seek guidance from above if they are breached (or are predicted to be breached).
The overall effect of these various mechanisms is to provide an environment within which each level of management has significant autonomy, and yet is under the direct control of the level above. Management by Exception !!