Never be late or over-budget again

During this week’s PRINCE2 Practitioner course, there was a student who worked in what I would describe as a “poisonous” project environment.  The company was hiring experienced project managers (a good start), but the attitude of management was that if things went wrong it was the Project Manager’s FAULT.  This is obviously an organization that does not understand what the role of the PM is, and more importantly the role of the Executive and the Board on a project.

All that being said, the biggest learning that this student took away from the class was the idea of Manage by Exception and escalating issues to the next highest authority.   She described how many issues came up during the project and in true PRINCE2 form, she escalated them to her project board, but all she got was resistance and push back, people who did not want to sign for approvals because they didn’t want to be held accountable or responsible, people who did not want to decide or come to resolution on issues.  

While this is an extreme case, degrees of this situation are everywhere. SO, WHAT TO DO?

In PRINCE2, issues that can be fixed within tolerance (all 6 tolerances of Time, Cost, Scope, Benefits, Risk, Quality) can be decided by the Project Manager.  This is great news assuming that the Board has given you some stage tolerance and assuming that corporate has given some project level tolerance. Unfortunately, those organizations that blame project managers for everything, typically do not understand, therefore don’t give any tolerance. 

What does this mean? It means that the PM must escalate most issues as an exception.  Exception reports must contain options to “fix” the situation. The basic options are do nothing, forms of do something or cancel the project. 

 When the board makes a decision to do nothing, they are by default agreeing to the consequences of do nothing. If they respond with “You are getting no more money to fix this, we are not escalating to corporate/programme, we are not prepared to negotiate a change in scope or deadline- YOU DEAL WITH IT”,  they are giving the PM authority to proceed without resolving the situation.  In PRINCE2, this exception has removed the PM’s authority to proceed, but we know that from a practical sense, these projects do not stop.

The PM will always do their best to minimize the impact of an issue on a project, but at no time can a PM decide to, extend the project end date, increase the overall project budget or change the project scope.  Eventually, the PM will run out of money to do the work required. At this point, in PRINCE2 we will raise another issue/exception.

In my experience, the board at this point says “keep going”.  They have by definition given me the authority to overspend (spend more than was originally planned) and therefore have by default changed the budget. Same discussion with time. If something happens to jeopardize our schedule, who is it that gives the approval to extend the project end date? It is the board.

Both of these implicit approvals are by definitions changes to the baseline PID which includes the overall project budget and schedule.  So when we compare the baselined PID to what was accomplished, during the Closing a Project process, are you ever over budget? Are you ever late?


I think the answer is NO.