Why people are central
People are one of the five integrated elements of PRINCE2, and they sit at the centre of the method. Projects succeed or fail through people: leading successful change, leading successful teams and communicating well. This page defines the key people concepts and explains the two distinctions the exam tests most: people within the project versus people affected by it, and leadership versus management.
Organizational ecosystem and project ecosystem
Projects unite people from organizations that already have defined organizational structures and corporate governance requirements. PRINCE2 describes two related environments:
- The organizational ecosystem is the wider organization (or organizations) that the project sits within and serves, with its existing structures, governance, people and culture. It is where the project's products will be used and where business as usual continues.
- The project ecosystem is the temporary environment created for the project: the people, structure, ways of working and culture set up to deliver the project's objectives. It develops as a distinct entity from the organizational ecosystem.
An understanding of the organizational ecosystem is needed to design the project organization successfully and to decide how the project ecosystem will develop. At the end of the project, the products and any remaining team members transition back into the organizational ecosystem.
People within the project versus people affected by it
The people element covers two groups:
- Those working on the project: the project management team and everyone else who allocates time to delivering the project.
- Those affected by the project: people in the organization and beyond who do not work in the defined project team but whose work or lives will change. For example, they may need to integrate the new products into their area of the organization.
Activities performed by people outside the project team need careful handling because the project cannot simply instruct them. Leading across organizational boundaries depends on influence and relationships.
Stakeholders
A stakeholder is any individual, group or organization that can affect, be affected by, or perceive itself to be affected by, the project. The definition is deliberately broad. It includes perception, and it includes people outside the business as well as inside it: for example senior executives, end users, suppliers, contractors, finance and legal teams, auditors, industry regulators, unions and the public.
Stakeholders relate to a project in very different ways:
- some back it, while others resist it;
- some stand to benefit from what it delivers, while others stand to lose;
- a stakeholder may regard it as endangering their position, or as strengthening it;
- any of them may turn into an active champion of its progress, or an active obstacle to it.
Culture
Culture is the set of shared attitudes, values, goals and ways of working that characterize a group of people. A project culture may be distinct from the culture of the business but should be aligned with the wider ecosystem. Agreeing ways of working, bringing behaviours into line and setting the culture all depend on first building a shared understanding with key influencers.
Change management
Projects exist to move an organization from a current state to a target state. Change management is about establishing the target organizational state the project needs in order to meet its objectives, and the means by which the business will shift from the current state, through any interim states, to that target. Leadership and change management work together to lead successful change.
Leadership and management
PRINCE2 distinguishes between two ways of getting work done through people:
| Leadership | Management | |
|---|---|---|
| Definition | Motivating people to achieve a project's objectives | Instructing the execution of tasks in line with agreed ways of working |
| Typical behaviours | Persuading, influencing and co-creating with a focus on managing key relationships; seeking regular feedback to keep team members aligned to the objectives | Giving clear instructions so that agreed tasks are carried out as agreed |
Both are needed. Leadership is especially important on projects because project managers often lead through influence rather than formal authority. Team members may have competing priorities and multiple reporting lines, may create hierarchical tension, and may even be more senior than the project manager.
Collaboration and co-creation
- Collaboration is people from across the project ecosystem working together to achieve the project's objectives.
- Co-creation is a specific form of collaboration. It involves users and key influencers in the design of products and agreed ways of working, so that the products and ways of working are adopted by the project and organizational ecosystems.
Co-creation is a subset of collaboration. Its distinguishing feature is involving users and influencers in design so that the results are adopted.