Like a contract between you and a car salesmen the project charter acts as an informal contract between the organization and the team, department or group of individuals who will be executing the improvement initiative. Project Charters are used in Lean, Six Sigma and many other Project Management Initiatives to provide guidance and direction for what you have been tasked to do.
What is a project charter?
Let's start by first defining what a project charter actually is. The project charter is one of the first essential steps in many different types of projects. Like we mentioned earlier the charter acts as an informal contract between the organization and the team. It sets a clear outlook on what the team's objective is and how their success factors will be measured.
We have included a business case sample format in the charter template for you to use when you download it. The next piece of information that a charter includes is a problem statement. The problem statement gives a more detailed look at the issues or the symptoms that are a result of the problem the team will be focusing on. A good problem statement will answer what is wrong, where it is occurring, how big the magnitude of the problem or opportunity is and explain why the opportunity or problem is so important.
After the problem statement the charter will typically define the goal. In summary this is a statement that describes the anticipated results of the project. The goal statement is usually connected to predefined measurements. The measurements are referred to as key performance indicators. These measurements should define the baseline or the current state so that the team knows where they are starting from. The team will also define where they think they can get to or the future state measurements. These measurements must be agreed upon. The final set of KPI's that will be collected and added to the charter afterwards are the actuals. The actuals will help establish measurements for tracking and continued improvement.
Like a contract would do we also outline the project scope. A simple way to understand the project scope is to think of your scope as boundaries for the project. They help the team understand what is acceptable and what is not. This is very important so that the Organization get's the results they want and the team is empowered enough to be able to get results.
There are two more critical aspects of a project charter that should be defined. The first is your team structure. This one is pretty self explanatory just be sure to outline each member of the team all the way up to the sponsor. The last piece of our project charter puzzle is the schedule or inch, foot or mile stones. These are critical parts of your project that show your start date, estimated completion and the total number of days for each one. Remember the charter is an informal contract between the organization and the team so whatever schedule you put on their is what the team will go by.