PRINCE2 7 Foundation · Study lesson 06
Stage gates and delegated control
Plan the next commitment and know when authority runs out.
10 minute study lesson · Principles · Original learning material
What you will understand
- Connect management stages to staged investment decisions.
- Explain delegation across four management levels.
- Recognise a forecast tolerance breach before it becomes an actual overrun.
The idea
A board needs enough control to protect an investment without managing every task. The principles manage by stages and manage by exception create that balance. Stages provide planned opportunities to assess evidence and authorise further work. Tolerances define the freedom available between those decisions. The result should be purposeful delegation, with early attention when a forecast moves beyond agreed authority.
A project has at least two management stages: initiation and one or more subsequent delivery stages. Stage boundaries are selected to support useful decisions about further commitment. The next stage can be planned in detail while later work remains at a broader level. This avoids pretending that distant work is fully understood, while still providing a project-level view of objectives and likely investment.
Four management levels provide a useful authority chain: the business layer above the project, the project board directing it, the project manager managing day to day and the team manager or delivery team managing product delivery. Each receives authority appropriate to its responsibilities. The board does not have unlimited freedom: if project-level authority is forecast to be exceeded, it must refer the matter to the business layer.
Tolerances describe permitted variation around agreed targets. They can relate to time, cost, quality, scope, benefits, risk and sustainability. A lower level should understand which tolerances apply to its plan and what must be reported. Delegation does not mean silence: routine progress information still matters. It means that decisions inside the agreed boundaries do not all require approval from above.
An exception is triggered by a forecast that tolerance will be exceeded. Compare like with like: a work-package forecast against work-package tolerance, a stage forecast against stage tolerance and a project forecast against project tolerance. A stage can be outside the project manager’s authority even if the overall project still appears affordable. Spare project contingency does not silently increase a stage’s delegated limit.
Escalation gives the appropriate authority a decision to make. Explain the cause, consequences, options and recommendation rather than merely reporting that something is late. A forecast exception does not automatically authorise extra spending, require project closure or create permission to replace the plan. An exception plan may be requested and then considered by the authority that controls the affected plan.
Delegation over a stage
| Situation | Decision level |
|---|---|
| A team forecast exceeds work-package tolerance | The team manager raises it with the project manager. |
| A stage forecast exceeds stage tolerance | The project manager escalates to the project board. |
| A project forecast exceeds project tolerance | The board escalates to the business layer. |
| An agreed stage ends | The board considers fresh evidence before authorising more work. |
An original fictional example
A seed bank installs new storage
A stage is planned to finish in ten weeks, with an upper time tolerance of one week. At week four, a supplier confirms a delay that makes the forecast finish twelve weeks. The overall project has three weeks of remaining schedule flexibility.
The decision
The project manager reports the forecast stage exception to the board now, with options. The board considers the response within its project-level authority and decides whether a replacement stage plan is needed.
Why it makes sense
Twelve weeks exceeds the stage’s permitted eleven-week limit. Project-level flexibility may help the board choose a response, but it does not give the project manager authority to ignore a stage breach.
A common confusion
The mistaken idea: If the project can absorb a delay, the project manager can exceed any stage tolerance.
The distinction: Authority belongs to a particular level and plan. Project-level headroom does not automatically change delegated stage limits.
Forecast the whole plan; compare with its limit; escalate to its owner.
Points to remember
- Use forecasts rather than waiting for actual breaches.
- Differentiate stage boundaries from routine reporting dates.
- The business layer, board, project manager and delivery level have distinct authority.
Your takeaway
Use stages for informed commitments and tolerances for everyday freedom. Escalate a forecast breach of the relevant plan while options still exist.
This independently written explanation is supplementary study material. It is not official examination content. Read about our content and its limitations.