You’re eager to kick off your new project. But your stakeholders are unsure of the project’s validity. Maybe they don’t have all the information they need. Likely this is because you don’t have a project charter.
The point of a project charter is to establish a sort of “contract” between stakeholders, project team and beneficiaries. Its purpose is to document the what, who, why and how of the project. This serves to communicate the shared goals and objectives of the project, making sure everyone’s on the same page.
The charter proves especially useful when issues risk derailing or deviating the project from its original purpose. It’s the agreement everyone can refer back to, to help stay on course. And the bigger your project, the more vital it is to have this.
A business case, on the other hand, is a pitch for a project. It comes before the project charter, making the argument for investment to management or the board. This validates if your project is aligned with organisational strategy. If it is, then you can go ahead with building your charter.
Project Charter Fundamentals
Your project charter should address the following:
- Purpose and objectives. Your business case outlined why this project matters and benefits the overarching business strategy and goals. In your charter, it’s also crucial you clarify your project objectives. An example of this could be increasing productivity by X%, which you could achieve through your project deliverables. For your objectives, consider using the SMART method to measure not only what you’re trying to achieve, but also why and how. Though of course, not all objectives can be measured with numbers. If your company uses Objectives and Key Results (OKRs), ensure you always link your project activities back to them. And of course, highlight the OKRs of the project itself.
- Scope and main deliverables. This section sets the boundaries. It covers what you’ll do and how. To avoid scope creep, it’s worth outlining state what you won’t do during the project as well. It also needs to include any potential prerequisites for the project to be a success. For example, you might be reliant on a current IT modernization project to complete on time to be able to roll out your new platform effectively to the right teams.
- Budget and resources. Because you’re pitching to stakeholders, you need to get granular. It’s not just the financial investment you need for the total project. Where’s the money going? Take into consideration the resources working on the project, the amount of time it will take, and any training they’ll need. And don’t forget to factor in the efforts needed by contributors and beneficiaries to the project.
- Risk assessment. This will enable you to identify potential risks and analyze their consequences. For instance, if a project management team wants to adopt a new project portfolio management tool, they should take onboarding and change management into account. This may impact their productivity levels and delay the project. A risk assessment also allows you to understand which tasks, deliverables, and milestones you need to achieve for your project to be successful. And remember to consider not only operational risks, but also possible interdependencies with other projects or processes.
- Timeline. Once you understand the scope of the project, you can split it into milestones. Examples of milestones might be when you gain client and stakeholder approval, or when you have important presentations. From there you can build at least a semi-detailed plan of phases and main activities in the project. The more details the better.
- Project governance. You need to define who is doing what on your project. Identify all stakeholders at every level that are required to execute the project. This means strategic (sponsorship), decisional (team managers) and operational (subject matter experts) levels. Be sure to identify external as well as internal resources and their full- or part-time status on the project.
How To Increase Your Chances of Getting Your Charter Approved
It’s not enough to simply communicate your project scope to stakeholders. Think of your project charter like a more in-depth continuation of your business case explaining not just what you’re going to do, but how you’re going to do it. You can use it to document the relationships between your project and business strategies. As such, it’s your project’s best marketing tool.
But a project charter’s power goes beyond the approval and set up stage. It’s there as a communally agreed “contract”, like we mentioned. As time passes, it’s common for projects to drift and deviate from their original purpose. A project charter keeps the project on track. It ensures everyone, as they come and go, understands why the project is important and what it's trying to achieve. It maintains approval for your project.
This is not to say a project charter can’t be modified. Flexibility is key in project management. But changes must result from a controlled process that makes clear the what, the why and how it will affect the project. These are commonly known as “change requests” and agreement to them requires the same level of buy-in as the original charter.
Given its potential power, you want to ensure your project charter is set up to work most effectively for you. This means doing the following:
- Research, research, research. Assess your project scope and talk to your project experts so you can determine resource needs, how much time they will need, and any risks involved.
- Prioritize your stakeholders’ stakes. Be it productivity, quality, cost—you need to know what your stakeholders’ priorities are. Then you can then gear your charter towards them, improving your chance of approval. This is especially important if multiple business areas are impacted. Each area has different priorities, but as a project manager, and with the help of the sponsor, you have to figure out an absolute priority for each stake.
- Manage uncertainty. With so many projects failing, it’s important to have a solid understanding of your project requirements and timeline. Look to your historical data. Information about your past projects is your best indication of what you’ll need going forward. You might, for instance, see that you allocated a budget of X to a previous project and ask for X plus 10% for the upcoming one. A buffer such as this will show stakeholders you’re setting realistic spending goals and assure them you won’t go over budget. Realism is key when it comes to every aspect of your charter. Don’t set out to define the exact number of deliverables and time it will take to complete your project. When you don’t live up to these expectations, it’s frustrating and often counterproductive. Allow for flexibility because, in essence, a project charter is a bet. It can be challenged, provided that challenge happens in a controlled way.
- Make your project charter accessible. Ensure you and your stakeholders have easy access to the project charter by uploading it to your project management software. And make sure all stakeholders validate it. This will enable you to reflect on what you did right and why stakeholders approved it and use this knowledge when creating a new charter.
And understand that you can’t write a charter in a day. It’ll likely take a couple of weeks as you wait for feedback. For larger projects, you might even recognize the need for multiple charters to address different project stages.
A Real-world Example
Mitsui Sumitomo Insurance Group, USA (MSIG USA) has a project charter template called the “Opportunity Document.” A Strategic Planning Office Manager and a Chief Planning Officer create the charter. They then recommend a sponsor and project manager, while a committee of 5 senior officers reviews the charter, approve it, reject it, or ask for changes. Once approved, the document is an “iron-clad charter”. This means that the project manager has the authority to work on the project, thanks to having the blessing of the top officers of the firm.
Because the project charter template is simple (only 2 or 3 pages long), the approval process for projects is simple too. In fact, some projects progressed from the idea stage to authorized project in just 7 days. Furthermore, the approval process has never delayed a project. It’s proof that other organizations can create a project charter that gains approval in a short period of time.
But remember, your charter isn’t set in stone. You can change it as you go when teams or other stakeholders identify better, faster, more mature project management practices. What’s important is that you have specific procedures for implementing changes, such as having team members fill out change request forms. Then you have a record of why they aren’t following the original plan, and what they plan to achieve with their new approach.
The bigger challenge is knowing if your project management practices are paying off. How can you tell if you’ve squashed all issues? Or, if your project is snowballing out of control?
Good project planning without data insights into project progress is still a shot in the dark. Maybe one with a steadier hand. But that’s not a risk a mature PMO would take. Instead, use data-driven technology for your project management, so you can bolster your project charter—and the resulting project—with intelligent insights.