Cheap Insurance: A Project Charter
When I first began managing manufacturing projects, I have to admit that I thought completing project charters were not necessary. Really, just a waste of effort. Just give me a project and let me complete it. As Nike advertises, “Just do it!”. However, as I matured as a leader and gained project management experience, I found the value in it.
Project charters are a cheap project insurance policy. Project charters align the project team with the project stakeholders. They establish project safeguards in a variety of aspects.
Let's say that you were sitting at your desk and you get an email that says, “Let’s meet”. That’s it, “Let’s meet”. Nothing more. You notice that it came from a coworker and was sent to the entire company. I’m sure the questions that pop into your head are: Who’s meeting? What are they meeting about? What is the meeting objective? When are they meeting? Where are they meeting? Is it one meeting or a series of meetings? What is the agenda? Are you invited? Do you need to prepare anything? Does the meeting fit your schedule?
It sounds crazy to get an email that says simply, “Let’s meet”. But it is no different than starting a project without a project charter. The project will be vague, the team directionless, the stakeholders will be in the dark and the project will be at risk of failure.
A Real Life Example
Here’s a actual project example that occurred at an electronics plant I worked at for 10 years.
The Project: We needed a new machine. It was unique to our business and the technology was proprietary.
Attempts #1 using No Project Charter: The machine was custom designed in-house by our engineering team. The mechanical design was created in CAD. The subcomponents were individually machined in our machine shop. The components were assembled and the machine looked great. We were a year in at this point. It was now time to finalize the electronics and program the machine. Again, this was unique and proprietary machine technology. An electrical technician was assigned the work. Control panels were bought and installed. Programming was being developed. Programming was being developed. Programming was being developed. ….and developed, …. and developed. Four years later, the technician quit. Still no functioning machine. A new grad, Electrical Engineer was assigned the project. Twelve months later… “the programming was being developed.” After five years, many dollars and wasted resources, the project was aborted.
Attempts #2 using a Project Charter: A project charted was created for this project. Now there as a description of the project, a business case, a budget, a timeline, milestones, a project leader, a defined project team, project goals, a scope and assumptions. The project stakeholders were identifies, and department heads approved the project charter via signatures. Now, with a project charter and a strong foundation, the team got to work. They understood their goals and their boundaries. The team decided to contract out the build under a confidentiality agreement and nine-months later, we had a fully functional machine in operation on our production floor.
What happened during the first attempt? Well with no project charter, there was no officially assigned team. Support resources worked under the premise that any work they did was a “favor”. They had other priorities. The resources that were directly assigned to the project had no timeline and no budget. Opportunities to complete tasks in parallel were overlooked. They didn’t have clear objectives and so they missed the mark. They didn’t have a clear scope, so scope-creep engulfed their progress. Technical issues were not communicated to the stakeholders and were not solved. What a giant mess!
The second attempt was successful because a project charter provided the team with a solid foundation. Not having a project charter is like playing a down of sand lot football. There are no designed play. Every player does their own thing. Having a project charter provides the players with a play. They understand the goal and the scope and can alter a play based on the defense and in this way, everyone remains on the same page. A project charter is simply a play in the playbook of plant success. It's a professional approach to project management.
Breaking Down a Project Charter
If your company doesn’t already have a project charter form, I recommend finding
one or developing one that best fits your business model. An experienced project manager can complete the project charter form in about an hour. As I said earlier, a project charter is a cheap insurance policy that can be used to eliminate expensive project failures. Below is a breakdown of the major aspects of a project charter, each explained in detail:
1. Project Title
The Project Title provides a clear and concise name for the project. It should be specific enough to indicate the project’s focus but broad enough to encompass all relevant activities. A well-chosen title helps stakeholders quickly identify and track the project throughout its lifecycle.
2. Project Sponsor
The Project Sponsor is the individual or group who provides the financial resources and executive support for the project. Sponsors play a critical role in championing the project, resolving high-level issues, and ensuring alignment with business goals. They also sign off on the charter and key milestones.
3. Project Manager
The Project Manager is responsible for planning, executing, and closing the project. They oversee the team, manage day-to-day activities, and ensure that project goals are met on time and within budget. The charter names the project manager and grants them the authority to lead.
4. Purpose/Justification
The Purpose or Justification section explains why the project is being undertaken. It outlines the business problem, opportunity, or strategic initiative that the project will address. This section ensures that everyone understands the value and importance of the project.
5. Objectives
Objectives are specific, measurable goals that the project aims to achieve. These targets should align with the organization’s strategic goals and serve as the criteria for success. Good objectives are SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
6. Budget
A project budget within a project charter outlines estimated costs, allocates resources, and sets financial boundaries, ensuring the project remains financially viable, controlled, and aligned with organizational expectations.
7. Scope
The Scope defines what is included in the project and what is not. It sets boundaries to prevent “scope creep” and clarifies expectations for stakeholders and team members. A well-defined scope ensures that the team remains focused and efficient.
8. Deliverables
This section outlines the tangible and intangible Deliverables that will result from the project. Deliverables are outcomes such as reports, new processes, training materials, or system updates.
9. Project Timing
Project completion timing in a project charter outlines the expected duration of the project, including the start and end dates. It sets the timeframe for achieving objectives, helps manage stakeholder expectations, and ensures alignment with organizational priorities and resource availability.
10. Project Milestones
Project milestones are key checkpoints that signify the completion of major phases or deliverables within a project. They help track progress, align stakeholders, and ensure timely execution. Milestones provide structure and visibility, aiding in schedule management and performance evaluation.
11. Assumptions
Assumptions are factors considered to be true for the purpose of planning the project, even if they are not guaranteed. They influence project planning and must be monitored for risk.
12. Constraints
Constraints are limitations or restrictions that affect project execution. These may include time, cost, technology, resources, or regulations. Identifying constraints early helps mitigate potential issues.
13. Risk Assessment
Project risk assessment identifies potential challenges that could impact project success, such as delays, budget overruns, or resource limitations. It involves analyzing risks, estimating their impact, and planning mitigation strategies to reduce uncertainty and support proactive decision-making throughout the project lifecycle.
14. Approval Signatures
Signatures from the sponsor and project manager confirm the agreement and authorization of the project. This formal approval provides the project team with the authority to proceed.
15. Discussion
A project charter is the basis for project discussions before kickoff. Project charter discussions involve collaboration among stakeholders to define the project's purpose, scope, objectives, and responsibilities. These conversations ensure alignment, clarify expectations, and address potential concerns early. Effective discussions lead to a well-structured charter that serves as a guiding document for project execution and accountability.
The project charter insurance policy only takes effect if the stakeholders and department heads take it seriously. Never approve a project charter without careful review and a good conversation with the project leader. A good project conversation can make or break the success of that project.
Summary
Project charters benefit companies by providing clear project direction, aligning stakeholders, improving communication, and defining roles. They enhance resource efficiency, reduce risks, and support informed decision-making, ultimately increasing the likelihood of successful project outcomes.
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