Who Needs a Charter?

Recently a newscaster interviewed a retired General about the possibility of U.S. military intervention in Libya. The reporter asked the General how that would be done. He said he couldn’t answer the question without first understanding the objectives of such a mission. If the desired outcome was to ground the Libyan air force that would require a very different approach than if the U.S. were trying to topple the Libyan government or actively support the Libyan freedom fighters on the ground. In short, the General was saying it would be foolish, if not impossible, to plan a military campaign without first understanding what was to be achieved and what resources would be available. In the world of project management, few of us are planning military campaigns but we still need to understand the reason our organization is running a project and agree on a high-level approach and the available resources before we really get started. We can use a project charter to begin defining these parameters.

What’s In a Project Charter Anyway?

The Project Management Institute (PMI) would have you believe your project won’t be funded and detailed planning cannot begin until a project charter is approved. According to PMI the project charter authorizes resources to be utilized by the project. While this may be true in large, mature organizations, I’ve worked with clients ranging from those who didn’t require a charter at all to others whose charters were such a burden they sometimes outweighed the benefits delivered by small projects. One project manager at such a client told me his charter for a six-month project with no capital expenditures cost the company over $30,000. Ironically his team completed 75% of the project before the charter was actually approved.

Every organization must determine how to derive the most benefit from their project charters but I firmly believe charters should always be required in some form. Simply put, they help your management and project teams develop a common understanding of what you’re doing and why. The act of creating a charter forces discussions around delivery strategies and project constraints.

Here are some key concepts to consider including in your project charter:

  1. Project Description
  2. Criteria for Success
  3. Scope
  4. Constraints
  5. Requirements
  6. Risks
  7. Schedule
  8. Resources Required
  9. Stakeholders

Since a charter is normally approved early in the project lifecycle, it is unusual for it to be very detailed. Instead the charter contains high-level information intended to align key stakeholders’ understanding of the project. Budgets, resource requirements and schedules identified in a charter are normally no better than +/- 50%.

Each of the above items is described in a little more detail below.

Project Description

The project description should help stakeholders understand what will be accomplished by the project. It should explain the purpose of the project and answer the question “why are we doing this?”

Criteria for Success

While the description answers the generic question of why the project is important, the charter should also explain how the sponsor or other key stakeholders will determine whether the project is successful. For example, a project to deliver a new software system may be considered successful when the legacy system is retired, ongoing maintenance costs are reduced, or new functionality increases productivity.

Scope

The project scope should make it clear what the project will deliver and may also state what the project is not going to deliver. It is generally best to assume undocumented items are out-of-scope but if you’re planning to exclude activities normally carried out by similar projects it can be helpful to call attention to them. For example, if a project is going to replace existing building mechanical systems and another project will dispose of the old systems, consider explicitly noting disposal of the old systems as outside the scope of the project.

Constraints

Any hard constraints the project team will face should be highlighted in the charter. Constraints can relate to resources, schedule, and scope. Some examples are externally defined deadlines, previously determined budgets, and the availability of people to work on the project.

Requirements

It’s usually a good idea to document the requirements as they are known when the charter is drafted. Requirements could include specific business benefits to be delivered as well as features and functions of products.

Risks

The process of writing the charter often uncovers risks. When you’re forced to think about the project’s strategy, constraints, scope and resource requirements early on, you’ll find yourself thinking about the potential problems the project team may encounter.

Schedule

The schedule included in a project charter is normally very rough and typically only identifies key deliverable start and finish dates.

Resources Required

Writing the charter is the first formal opportunity to notify the sponsor of resources needed to successfully complete the project.

Stakeholders

Identify as many of the key stakeholders as you can in the charter. Who is the project sponsor? Who is the project manager? Are there other end users or consumers of the project’s deliverables? Who will decide when the project is complete or whether it met its goals?

Conclusion

Writing a charter can seem like bothersome paperwork to some people, but it provides your organization with a chance to think through why you’re executing a project, how you’re going to achieve the desired results and what it will take to succeed. Remember, the information known at the beginning of a project is normally very high-level so you should allow estimates to be refined as the project matures. A rough order of magnitude (ROM) estimate is generally considered +/- 50% so if you don’t give your project team members a chance to refine estimates later, don’t be surprised with large performance variances on project budget and schedule. At the same time it should be understood that changes to the project charter require justification and approval. Just don’t make it so onerous that your project managers are afraid to commit to anything in their charters.

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