What’s in a project charter? I started in the Motorola Six Sigma Program in 2001. At that time, they did not include DMAIC as part of the training. The focus was on organizing data to explore variation and measure correlation. The problem with this approach is that we can study many different things, but not all of them matter or matter equally when we are chasing improvement.
I remember a story that one of my instructors told us. It was about a study of blueberries in the blueberry muffins in the cafeteria. We had a really excellent cafeteria in Schaumburg and while I didn’t often eat breakfast there, I am sure the blueberry muffins were excellent as well. According to my instructor, a Six Sigma project was conducted on the daily and weekly variation of blueberries in the blueberry muffins. It was found that there was some correlation between the day of the week and the quantity of blueberries in the blueberry muffins. If you are wondering what the cause might be, you have already ventured in the wrong direction. I can’t tell you if there was causation with the correlation or if any changes occurred as a result of the project. The point of the story is that this was a Six Sigma study and it was performed on a mostly unimportant area of the business, the employee cafeteria. A good project charter prevents us from wasting time on projects that are not valuable to the company.
The need to define what is important and what is not important is crucial to both selecting the projects that will help the business and focusing the project team on identifying causes and solutions. Without thinking about “what is important” and Defining a clear business case, we waste a lot of effort on things that are interesting but not important.
Following DMAIC in our application of Lean Six Sigma avoids this pitfall. The Define phase answers the question, “What is important?” The charter, where we build the business case, is possibly the most important artifact in the Define phase of a project. The charter asks the questions that help us determine what is important. The nature of any organization is that the resources to execute the work, the resources to manage the business, and the resources to improve the business are scarce. This means that we have to focus on a vital few set of initiatives that provide the most benefit to the mission and objectives of the organization. Many things can look like a problem, but how do we know that it is a problem worth solving? The Define phase asks the big question, “What is important?” The Charter asks smaller questions to focus our improvement work and set the project up for success.
I have come across many different charter formats over the years. There are a few questions that every good charter format asks to help determine what is important.
The first consideration in building your charter is to define the business case. A business case provides written logic that connects an operational opportunity with the mission and vision of the organization. It connects the opportunity with the requirements of the customer, the business, and the employee. It spells out a quantifiable objective and a financial impact, or at least the financial opportunity if that objective can be achieved. It also provides some guardrails around what can be expected and what should not be expected: in scope, out of scope, risks, constraints, and assumptions. A strong business case is a crucial part of the charter, but that is not all.
While the business case ensures that the work to be done will help the company achieve its objectives (blueberry muffins not having an important business case for Motorola), the charter also needs to help the project team align. The charter must also define the measure of success. The question we were always asked at reviews (and I still ask today) was “how do you know?” How do you know that you have improved? It cannot simply be that we took a bunch of actions and they were successfully deployed. We need to know how the actions impacted our objective. This is a crucial part of Defining success. This requires a measure. A good charter defines that measure and the target we need to achieve to claim success. Without these things it’s simply activity without accomplishment.
Given that we have scarce resources, the charter has to let us know what resources are required to achieve the target. We need to know the effort of each person and over what time period. A good charter outlines the specific people that will be involved (this is both project team and stakeholders), their roles, the timeline of the work, the effort required and their methods of communication and interaction. Without defined resources, we will fail to identify and implement the changes to meet the target and further lack what is needed to address the business case.
The charter is the major artifact of the Define phase, it connects the mission/vision of the organization with the opportunities to achieve them. It aligns the team on how they will collaborate and defines their measure of success. Building the charter often requires other artifacts, a schematic of measures, a cause and effect diagram, and a simple process map. This helps determine the specific information that will go into the charter. When you have leadership and the project team in agreement on the charter you know that the Define phase is complete and you can move on to the next phase.
The project charter, the main artifact of the Define phase, is crucial to creating the case for change. This is one of the reasons why the DMAIC approach is so successful in driving continuous improvement. People are not motivated or aligned if the case for change is not clear.