Bob and Uma took the project charter that had been approved by the steering team back to the project core team for a signing ceremony. The steering team also recommended an incentive of 10 percent of salary for the successful on-budget, on-time completion of this vital project. Everyone enjoyed refreshments as they celebrated the successful close of the project initiating stage and prepared for the project planning stage. The project charter is shown in Figure 2-4.
Figure 2-4: B2B Project Charter
The initiating stage of a project is complete when the project team and the sponsor sign the charter. The charter is one of the most important project documents and, arguably, the one that project sponsors have the most personal involvement in creating. Project sponsors must ensure that other planning and control documents are completed, but they must be personally involved in the creation of a charter. Other project leaders (that is, the project manager and the core team members) will have extensive personal involvement in creating other planning and control documents in addition to the charter.
A project charter is a contract between the project core team and the sponsor (who represents both senior management of the organization and the outside customer). As with a contract, the people who sign the charter should ensure that they understand and agree to every detail within it. Either party (the sponsor or the project core team) can write the rough draft and then very candidly discuss each part of the charter with the other party. Sometimes the sponsor tells the core team right at the start which items are especially important, but more often either the team creates the rough draft or both parties develop it together. When both parties work together, the session is often facilitated by either an outside consultant or a disinterested executive from the parent organization (that is, one whose own area will not be substantially impacted by the project). Many organizations understand that serving as a project facilitator is a learning experience for rising executives and choose to assign this role to managers who show promise.
Essentially, a charter has two purposes. First, everyone involved in the upcoming project needs to develop a common understanding of what the project is all about. Second, each person needs to personally and formally commit to doing their best to achieve the agreed-upon project results—even when things do not go as planned. Many organizations have developed their own ideas of what must be included in a charter to accomplish these two goals. Organizations value speed and simplicity when creating charters. The charter is written to get a quick understanding of what is involved in completing the potential project with the knowledge that, if something is not acceptable, the project may not get approved. In many organizations projects are not considered official until a charter is completed and signed.
Listed below are some of the typical key sections that are included in a project charter. For ease of remembering, we present these sections as the three "W"s to be accomplished, subject to the three "H"s, by using the three "C"s. We briefly define each section and list popular alternative names. Note that while the intent of most of these sections is included in many charters, many organizations combine sections or leave out one or two. As long as the two purposes of the charter (agreement and commitment) are accomplished, the exact format is certainly negotiable.
The Three Ws:
Why—also known as mission, purpose, objectives, or business case. This is the reason for undertaking the project. It is hard to commit to something unless you understand why it is important.
What—also known as scope overview or deliverables. This describes what will be accomplished.
When—also known as milestone schedule. This lists when key portions of this project should be completed. Critical success factors or metrics are a brief listing of what should be monitored closely to ensure that the project is making adequate progress; they are often the basis for the milestone schedule.
The Three Hs:
How much—also known as budget or spending authority. This shows how much the project is expected to cost and may include limits on specific aspects.
Hazards—also known as risks and assumptions. This identifies what might go wrong, how likely each risk is, the consequences if the risk happens, and what the project team plans to do about each risk.
How—also known as team operating principles or methods. This describes how the team will function. Organizations often have this established for all project teams and incorporate it by reference.
The Three Cs:
Communication plan—also known as reviews, approvals, and reports. This describes who needs to know what information, when, and in what format.
Collection of knowledge—also known as lessons learned and lessons shared or post mortems. This describes how this project team will perform this project better based upon what they learned from at least one previous project. A wise sponsor will not sign a charter until the project team has convinced her that they have learned from studying previous projects.
Commitment—also known as signature block or roles and responsibilities. This lists who is involved and often describes the extent to which each person can make decisions. It also is how the project team members publicly and personally show their commitment to the project by signing the charter.
The B2B team did the most important thing by constructing the charter that each team member and the sponsor representing top management publicly signed. The charter is pretty good as far as it goes.
The purpose statement includes two of the Ws: what and why. The deliverables expand on the what and the milestone schedule addresses the last W: when.
The three Hs are also covered, but are not very complete. The budget is how much (although it often must have more detail and support). The risks are the hazards. While these are listed, having three high-risk items should raise come concerns about the project approach. Team operating principles (the how) such as "team members will trust each other" seem pretty simplistic and hard to enforce.
Notably missing are most of the Cs. Commitment is the most important C and that is included in the roles and responsibilities. However, the communication plan and the collection of knowledge are entirely missing. Collection of knowledge (lessons learned and shared) will help a project team make better plans based upon the successes and mistakes of previous projects. These lessons learned should also be in the charter. Project teams often put the communication plan off until the planning stage. That is also acceptable—as long as it is accomplished. It is very important to remember who needs project information, when, and in what format, and then to provide that information. When people do not have the information they need, they are likely to guess and the rumors they spread will frequently cause problems for a project. A wise project leader will try to balance the needs for these W, H, and C elements for their charter with their interest in keeping things simple and keeping them moving.
A Project Leader Needs to:
Accept his or her responsibilities as a project leader
Have the courage to help other project participants accept their responsibilities
Exercise the wisdom to understand the difference between these two types of responsibility.
Now that the charter is approved, the project team is ready to move into detailed project planning. The role of senior project leaders (sponsors) may diminish somewhat as they oversee the details rather than plan them personally; the role of the junior project leaders (all others) remains high during planning. Depending on the needs of each project, the amount of time that project leaders need to personally spend will sometimes diminish during project execution and closing.