Effective project boards for the PRINCE2 method White Paper

Having the right management, organizational structure, processes, and information are all important. However, surveys continue to show the added necessity of good leadership and senior management engagement (and commitment) for successful project delivery.

It is also important to note that active engagement of senior management is not an excuse for micromanaging, taking on the project manager’s role or delegating everything to the project manager and abrogating all responsibility.

A senior manager on a project board is accountable for three aspects of an organization’s performance:

• maintaining current business operations or ‘business as usual’ (BAU)
• transforming business operations to survive, thrive, and compete in the future
• developing new or improved products or service offerings.

Project board positions are very demanding and should work in tandem with the project management team. Most senior managers, whatever their level of experience, are likely to be involved in one or more project boards as a way to support change within their organization.

To be effective in that role, project board members need to understand the duties, behaviours, responsibilities, and accountabilities expected of them.

This white paper addresses some key questions raised by those who sponsor or direct projects, such as:

• What is expected of me and when?
• How do I delegate authority to the project manager but keep control?
• What decisions am I expected to make and when?

To direct projects effectively, project boards need to understand what is involved in projects and what makes projects different from current business operations or BAU.

Several characteristics distinguish project work from BAU:

• Change: projects are how we introduce change in the organization.
• Temporary: projects are temporary in nature. Once the desired change has been implemented, BAU resumes in its new form and the project is no longer needed. Projects should have a defined start and a defined end.
• Cross-functional: a project involves a team of people with different skills working together to introduce a change that will impact others outside the team. Projects often cross the normal functional divisions within an organization and sometimes span entirely different organizations. This frequently causes stresses and strains both within and across organizations; for example, between customers and suppliers. Each has different perspectives and motivations for getting involved in the change.
• Unique: every project is unique. An organization may undertake many similar projects and establish a familiar, proven pattern of project activity. However, each one will be unique in some way: a different team, a different customer or a different location. For this reason, it is far better to learn from previous mistakes or successes than to repeat them in ignorance. With regards to project management, organizations need to learn from experience.
• Uncertainty: the characteristics already listed will introduce threats and opportunities beyond those typically encountered during business as usual, so projects involve more risk.

Projects bring about change within and for organizations. As the pace of change accelerates and the consequences of failing to adapt to change become more evident, there is a need to focus on achieving a balance between BAU and business change. Projects are how we introduce change and, although many of the skills required are the same, there are some crucial differences between directing business functions and directing project work.

Project management is the planning, delegating, monitoring, and control of all aspects of a project, including the motivation of those involved to achieve the project’s objectives within the expected performance targets.

PRINCE2 identifies six performance targets for a project:

• time
• cost
• quality
• scope
• benefits
• risk.

These are used to establish tolerances (a range of allowable deviation from the target level) for each of these performance targets. It is an example of the type of project control that is recognized in PRINCE2.

PRINCE2 is principle based and has the following seven principles:

• continued business justification
• learn from experience
• defined roles and responsibilities
• manage by stages
• manage by exception
• focus on products
• tailor to suit the project.

These principles must be adopted when managing a PRINCE2 project.

For projects using an agile approach, it is worth noting that agile has a very strong focus on principles. The Agile Manifesto (first published 2001) and most of the agile frameworks and methods all promote a set of principles in some form. The PRINCE2 principles align with these principles and are complementary to agile ways of working. Some of the PRINCE2 principles are very much agile, such as continued business justification, learn from experience, focus on products, manage by stages, and manage by exception; the last being synonymous with giving people autonomy and empowerment.

PRINCE2 provides a comprehensive, flexible, and fully integrated set of best practices for setting up an appropriate project management team, establishing plans, monitoring the six performance targets, and maintaining control through effective decision-making as the project progresses through its lifecycle. To achieve optimal benefits with PRINCE2, the various roles, including the project board, must come together to form a cohesive project management team.

Delegation is a vital skill in this environment. There are two distinct aspects to delegation. First, it requires leadership ability and motivational skills. Second, it requires a hierarchical organization structure to operate in, which, in project work, is typically cross-functional. PRINCE2 addresses this aspect of delegating direction by defining an organizational model that is both flexible and temporary, with defined roles and responsibilities that are optimized for project work. The defined roles and responsibility principle allows the project manager to manage the project within the agreed tolerances without the risk of being micromanaged by the project board.

Guidance, such as the OGC NAO lessons learned – common causes of project failure, and surveys and benchmark reports, such as Project Management Institute’s Pulse of the Profession and those conducted by the National Audit Office, all provide insight into the way projects succeed and fail. All these documents show that success is attributed to recurring factors, such as:

• Ensuring user involvement: without this there will be no buy-in for the change being proposed.
• Speed of decision-making: this tends to be quicker in a project environment since there are many difficult decisions to be made as the project proceeds, therefore preparation is key.
• Senior management commitment and drive: the project board members are the leaders and should be committed to the project and support the project manager. Even allowing for the project manager’s expertise, drive, and commitment, it is the project board that is ultimately accountable for the project’s success.
• Building a facilitative culture: although it is the function of senior management to provide leadership and direction, this is not simply ‘command and control’ and requires working together in tandem with the project manager.

Other factors to consider are:

• Ensuring the right users are involved and used correctly: this increases the chances of a successful output and outcome being delivered and hence a successful project.
• Supporting decentralized decision-making and empowering teams to succeed: this fosters a top-down/bottom-up working structure.

The latter is particularly the case with agile ways of working. When projects use agile approaches, support and authorization need to be provided promptly. This is achieved by empowering the project manager and delivery teams. Practising transparency and collaborative interactions helps to ensure that the project remains viable and on schedule, as any risks or issues can be detected quickly and responded to immediately.

The PRINCE2 principle ‘manage by exception’ enables the appropriate level of empowerment to work appropriately with agile approaches (including both development and delivery). The use of tolerances (for the six project performance targets) will be very useful in this perspective because they support the PRINCE2 Agile ‘fix and flex’ approach.

Leadership demonstrates commitment to the project and provides a steady hand at the wheel, which has a positive effect on the team, giving them the confidence to succeed. Leaders need to have the following characteristics (there are many, but these are of relevance to the project board):

• Capable: they know what they are doing and have reached a senior position in the organization which reflects this status.
• Honest: they are trustworthy, not just with their peers but with the project team reporting to them.
• Creative: they contribute to, and sometimes provide, the solutions to risks and issues being faced by the project team.
• Confident: they have the respect of the other project board members and the teams reporting to them. They take the responsibility for making decisions and sticking with them. They have a confident aura and are able to reassure their teams when necessary.
• Driven: they drive the project. They should retain this quality even, and especially, in times of difficulty.
• Courageous: they are responsible and accountable. They are able to make tough decisions and stick with them.
• Visible: they are approachable and supportive to the project management team.

The project board is ultimately accountable for steering the project through to completion; it needs to support and direct the project. If its composition is deficient, the project is likely to struggle. This is a challenging area for senior managers, and it requires unified direction. Appointing the right project board members is probably the most important factor in achieving a successful project.

The project board has the authority and responsibility for the project. Corporate management, programme management, or the customer sets the boundaries within which the project board can operate. In PRINCE2, the main project board roles are:

• The project executive, the focus of accountability for the project, who accordingly retains the ultimate decision-making authority within the project board. The executive represents the interests of the business.
• The senior supplier (or supplier representative) represents the interests of the designing, developing, procuring, and implementing parties of the project’s products. The role is accountable for the quality of the products delivered by the supplier(s). They are responsible for the technical integrity of the project and will provide supplier resources to the project.
• The senior user (or user representative) specifies the benefits and is held to account by demonstrating to the business that the forecast benefits, which were the basis of project approval, have been or are being realized. The senior user is responsible for ensuring that the project product delivers the stated benefits, which may not be realized during the lifetime of the project. The senior user is also responsible for providing user resources to the project.

8.1 THE PROJECT BOARD’S MAIN DUTIES

Apart from directing the project throughout the project lifecycle, the main duties of the project board are:

• Ensuring benefits are planned for, monitored, and recognized in order to meet the project business case.
• Ensuring the project remains viable, deliverable, and desirable for the business environment (both internal and external).
• Facilitating cross-functional integration across the business. The project team is temporary and, very likely, a cross-functional structure. It is important that that the project board ensures that this is recognized and respected in the line management organization and that the project board’s authority is not undermined. If all cross-functional teams work together, understand each other’s role and position, and trust each other, the project team can achieve much more than as separate individuals.
• Committing resources: the project board members collectively should have the authority to deliver all the resources required for the success of the project. Lack of available resource as a result of, for example, operational work is one of the major causes for project delays or failure.
• Confirming the tolerances involved for the business performance metrics for the project; the tolerances provide the project manager with a defined measure of discretion before decisions must be escalated for resolution by the project board.
• Ensuring effective decision-making. The project board makes the key decisions during the project. Decision-making is the means by which control is maintained and PRINCE2 provides an optimized method for this purpose. The project executive is the ultimate decision-maker, supported by the other project board members. It is important to note that by approving plans/proposals, the project board is:
  • endorsing the effort and costs involved
  • committing to make the necessary resources available.
• Ensuring effective progress. Once the project has been initiated, the project board becomes primarily a progress control function where plans are approved and progress is assessed and reaffirmed at project board reviews, principally at stage boundaries. All project board reviews should be based on the same simple agenda:
• • understand where we were and where we are now, which involves reviewing the status in relation to the current stage plan (or exception plan)
  • look forward: preview the next stage plan (or exception plan)
  • assess the overall project viability: consider the current status of the business case, project plan, and risks/issues
  • decide whether to give authorization to proceed by approving the next stage plan (or exception plan) or to close the project.
• Managing risks, issues, changes, and exceptions: decisions on minor risks, issues and changes can usually be delegated to the project manager. However, due to their level of severity some should be referred to the project board. This should be agreed when initiating the project and documented in the project initiation document.
• Structuring the project management team: the project board needs to carefully consider the proposals for the structure of, and appointment to, the project team. Those involved need to have extensive knowledge.

8.2 THE PROJECT BOARD’S MAIN BEHAVIOURS

Apart from directing the project throughout the project lifecycle, the main duties of the project board are:

• Project accountability: the project executive within the project board is accountable for the ultimate success or failure of the project. Being accountable means accepting and ‘demonstrating’ ownership of the project.
• Providing unified direction: the project board needs to provide unified direction, which can involve difficult compromises. The project board should work together to achieve mutually agreed solutions. In order to do so, the project board needs to have clearly defined authority for decision-making.
• Be an effective leader: we have touched on this topic earlier, but here we shall focus on the term ‘servant leader’. This means that you are willing to put the team members’ needs above yours, while remaining true to the objectives of the project. A team ethos of ‘we’ is endorsed. Project board members should act as servant leaders. It is not just a participative leadership style, it is a behaviour that you adopt over the longer term. For more information on servant leadership, refer to AXELOS’s PRINCE2 Agile^® (2015) (Section 10.5.1).
• Value the team: the project board should ensure that everyone is made to feel valued and respected and knows what they need to accomplish.
• Delegate effectively: the project board should delegate effectively using the PRINCE2 organizational structure and controls. Several aspects of PRINCE2 are designed to promote effective delegation, such as:
  • the well-proven structure of roles and responsibilities in the project team
  • plans designed to meet the needs of managers at different levels
  • implementation of management stages, where the value management of the project is delegated to the project manager on a stage-by-stage basis, which could also include a ‘stage contract’ between the project manager and the project board.
• Responsiveness: the project board should respond swiftly to requests or escalation of project exceptions from the project team.
• Support the project manager: the project manager is the focus for the day-to-day management of the project work and this is often a busy and stressful role. The project board can relieve some of the obstacles by demonstrating visible, effective, and sustained support. Some examples are:
  • provide unified and consistent direction
  • act as a mentor as appropriate
  • listen carefully to the project manager’s concerns
  • be accessible for consultations, advice and guidance
  • respond promptly and constructively when matters are escalated
  • participate in all the formal project board reviews.
• Ensure effective communication: the project board is responsible for directing communication with stakeholders and acting as champions for the project. On large or complex projects with many stakeholders, a communication management approach will be essential. A rich communication environment within the project should be created, one where information passes freely in a culture of commitment and trust. There is still a need for documentation but, by making use of more effective channels, it can be complemented and greatly reduced in quantity.

The project board is primarily concerned with the following PRINCE2 processes:

• Starting up a project
• Directing a project, which involves authorizing:
  • initiation
  • the project
  • a stage plan
  • an exception plan
  • project closure.

During the lifetime of the project, the project board is also required to give ad-hoc direction (as appropriate) and be involved in benefits reviews.

Ultimately, project board members are there to make timely decisions. If the decisions are delayed or poorly informed, then the project itself could be delayed and put at risk.

9.1 STARTING UP A PROJECT

The purpose of this process is to ensure that the prerequisites for initiating a project are in place by answering the following questions:

• Do we have a viable and worthwhile project?
• How does the project support and contribute towards the organization’s strategy?

Starting up a project is as much about preventing poorly conceived projects from being initiated as it is about approving the initiation of viable projects. The aim is to do the minimum necessary in order to decide whether it is worthwhile to initiate the project.

Where an agile approach is being considered, the project board needs to assess the suitability of a proposed agile approach by looking at which agile ways of working exist or need to exist, as well as their respective advantages and disadvantages.

9.2 DIRECTING A PROJECT

The primary activities involved in directing a project are described in more detail below.

The purpose of authorizing initiation is to decide whether developing the outline business case further by initiating a formal project is worthwhile. The project board decides whether to proceed by assessing the project brief. If the decision is to proceed, the project board needs to review and approve the stage plan for initiation. One outcome from initiation is the project initiation document (PID), which is used to approve future activity.

9.2.2 Authorize the project

The purpose of authorizing the project is to decide whether to commit to the project as a business investment. The decision is based on the detailed PID, which has been developed by the project management team in the initiation stage. Once the project board has approved the PID, it becomes the baseline for all forms of project control, covering; benefits, risks, scope, quality requirements, costs, timescales, and tailoring guidelines followed. The project board can then consider and approve the stage plan for the next stage.

At the start of the project, it may be unclear whether an agile delivery approach is appropriate for some or all the specialist products. It is during the initiating a project process that the decision is likely to be made as to which parts of the project are best approached using agile. By authorizing the project, the project board is attempting to cover the following questions:

• Why do we want to undertake the project?
• What does the project need to deliver?
• How will the benefits be measured?
• Who will be the key players in the project management team?
• How much resource and finance will be needed?
• When will the effort be needed?
• Are the risks acceptable?
• How do we tell people about the project?
• Are we ready to start?
• Have we established the right level of governance?

9.2.3 Authorize a stage plan

Once the project has been authorized and the PID approved, the project progresses as a series of one or more delivery stages during which the project product is created which is what the project must deliver in order to gain acceptance. Authorizing a stage plan is the activity performed by the project board at each stage boundary.

The purpose of authorizing a stage plan is to provide the project board with an opportunity to review progress, reaffirm the viability of the project, and give the project manager approval to proceed based on an agreed stage plan.

In this step, the project board manages by exception, which means that the project board’s focus is on the control points only, with the stage plan being the notional contract (including the preferred delivery approach) between the project board and the project manager.

9.2.4 Authorize an exception plan

Authorizing an exception plan is the activity performed by the project board in the event of a project exception. An exception is a condition occurring during a stage which requires escalation to and resolution in a timely manner by the project board. An exception prevents the project manager from completing the stage within agreed tolerances for scope, time, cost, quality, benefits, and risk.

The implementation of ‘manage by exception’ principle provides for very efficient use of senior management time as it reduces senior managers’ time burden without removing their control by ensuring decisions are made at the right level in the organization.

9.2.5 Authorize project closure

This is the last project activity. Its purpose is to confirm that the project has been concluded in an orderly manner before the remaining project team is disbanded.

When using an agile approach, project closure is still likely to be a formal event. However, most of the information is already known and most of the work is already completed, owing to the iterative and incremental nature of agile ways of working. Examples of this would be that benefits may have already been realized, most of the project product’s functionality is in operational use with documentation just needing to be finalized. Many lessons will have already been identified during retrospectives at the end of each sprint.

In addition to the sequential processes described above, the following activities will occur throughout a project’s lifecycle.

9.2.6 Give ad-hoc direction

This is an important task for the project board: providing opportunities to support the project manager and communicating and delegating effectively. The project board can provide direction individually or collectively. The purpose of this activity is to ensure that there is a consistent and thorough mutual understanding between the individual project board members, the project manager, project assurance, and the external stakeholders throughout the project’s lifecycle.

9.2.7 Reviewing benefits

A benefits management approach is produced and approved alongside the business case during project initiation. This details who will do the benefit reviews, when they should be done, and how they will be conducted. The project board must ensure that benefit reviews are planned and executed post-project.

If benefits are achieved during a project, they are reviewed at stage boundaries. This means that when authorizing a stage or exception plan and authorizing project closure, the achievement of benefits is the measure of the project’s success.

When using an agile approach, benefit reviews are still likely to be a formal event. However, most of the benefits may already be being realized due to the iterative and incremental nature of the agile way of working.

Directing Successful Projects with PRINCE2^® is designed to support senior managers, whatever their level of experience, who are undertaking project board roles. The guide covers the essential elements that project board members need to consider when driving successful projects. It covers the duties, behaviours responsibilities and accountabilities expected of members of the project board and can be used as a reference tool at any stage of the project to check what is required. It is intended to be used in conjunction with the latest edition of Managing Successful Projects with PRINCE2^® *(AXELOS, 2017) and, like Managing Successful Projects with PRINCE2^®, Directing Successful Projects with PRINCE2^® contains extensive guidance on how to tailor the method to the particular requirements and specifics of any project at every key stage in the process.

The guide answers the following questions raised by those who sponsor or direct projects:

• What is expected of me and when?
• What should I expect of the project manager?
• How do I know that the project manager is applying PRINCE2 appropriately?
• How do I delegate authority to the project manager but keep control?
• What decisions am I expected to make and when?
• What information is required/available to help me make decisions?
• How do we tailor the use of PRINCE2 for projects of differing scale or type?
• What does an effective project board look like?

Table 11.1 is a reference that project board members can consider throughout the lifecycle of the project. These are not glossary definitions and it is by no means exhaustive, but it is a good place to start. Refer to Directing Successful Projects with PRINCE2^® for more detail. Appendix B contains process-oriented checklists as a quick reference tool to ensure that the project is following the PRINCE2 method.

Being on a project board is a demanding but rewarding activity as you see change rolled out across your organization and the benefits being achieved/realized. When the project team makes timely decisions, gives direction and delegates authority and activities, it helps ensure that the project board members are significantly involved and can gain satisfaction from seeing their projects succeed.

Allan Thomson has over 25 years’ project and programme experience. He has worked with companies such as British Gas and BP in Customer Relationship Programme Management and Risk Programme Management respectively. He joined AXELOS in 2014 and has acted as a Programme Manager and SME (Subject Matter Expert) for PRINCE2 Agile, and as an SME on the PRINCE2 2017 update. He is presently a PPM (Project and Programme Management) Product Ambassador.

AXELOS. (2018). Directing Successful Projects with PRINCE2®. TSO. London. AXELOS. (2017).

Managing Successful Projects with PRINCE2®. TSO. London. AXELOS. (2015).

PRINCE2 Agile®. TSO, London.

Office of Government Commerce (2009) OGC NAO lessons learned – common causes of project failure [Online]. Office of Government Commerce. Available from: www.finance-ni.gov.uk/sites/default/files/publications/dfp/OGC-NAO%20Lessons%20 Learned%20-%20Common%20Causes%20of%20Project%20Failure.pdf [Accessed 15/09/2020]

Project Management Institute (Yearly) Pulse of the Profession [Online] Project Management Institute. Available from: www.pmi.org/learning/thought-leadership/pulse [Accessed 15/09/2020]

* Note: in the United States, Managing Successful Projects with PRINCE2^® is entitled Effective Project Management; the PRINCE2® method (AXELOS, 2020)