The conception or initiation phase of a project typically culminates in the preparation and publication of an important artifact – the project charter or initiation document, assuming of course that the proposed project has survived the various selection hurdles along the way. A project charter is a formal high-level written contract agreed between our project sponsor, ourselves as project manager, and sometimes other key stakeholders, that formally authorises us to commence our project.
Strictly speaking we do not have a project until our charter has been agreed, signed and published. Until the charter is finalised we only have a possible or probable project, and if we are managing a project at present and do not have a written signed charter, we should prepare one and get it signed off by the project sponsor as soon as possible. This charter is needed because:
- It acknowledges that the project is worth implementing.
- It formally appoints us as the project manager.
- It ensures that we understand the project purpose, goal and basic parameters.
- It provides key information needed for us to plan the undertaking.
- It documents a common understanding and provides a basic reference thereafter.
- It gives us authority to commit time, money and resources.
- It designates the parameters within which our project work is to be completed.
A well-written project charter is a very useful tool for judging the effectiveness of our project efforts. It becomes a compass to keep us firmly directed at the project’s goal. A good project charter is a reference point for settling disputes, avoiding “scope creep,” judging the potential value of new ideas, measuring progress, and keeping the team focused on the end-result.
As project managers it’s in our interests to be involved in the preparation of our project charter given that, among other things, we will be able to help ensure that it is an achievable challenge. Left to the sponsor, the charter may have unrealistic constraints. Yet, some project professionals may consider the project charter as ‘just more documentation’ or a ‘mere useless formality.’ But the truth is that if they were to create a thoughtful charter, many problems and issues will be eliminated. And I have talked with project managers who manage their projects without referring to or even knowing the existence of their project’s charter. Some reasons for not having a charter are these:
- Project management immaturity, lack of project approaches or poor project governance by the sponsor or organisation. There’s a lack of awareness of the need for a charter or formal authorisation process.
- At project initiation, there are no clear measurable objectives or reasons for the project. Hence, there is nothing to useful or definitive to record.
- The charter may have been written, but is filed away or lost within the organisation’s documentation system. This could be a symptom of high staff turnover or a poor information system.
- Requirements and other changes to the project deemed the existing project charter obsolete. It was discarded, rather than updated.
- The project has been initiated or is continuing without executive commitment.
- The project is considered too small or simple to warrant a charter, so writing a charter is considered a ‘waste of time.’
- A charter may exist but contains information that is too rigid. Details, budgets and milestones may be unrealistic and unachievable, and therefore dismissed and not referred to further.
- Alternatively, the metrics and information contained in the charter may be too broad and ambiguous and therefore not helpful.
However, without a proper charter, a project is headed for problems, such as:
- Risk of diminished value and importance of a project, if its purpose and benefits are not documented, agreed and formally recognised.
- Delayed decision-making. Getting management and sponsors to sign off on discisions becomes difficult. There is no one to champion the project and responsibility for it is passed around or avoided.
- Difficulty managing expectations. Without a collectively agreed-to charter, there may be frequent disruptions and disagreements from stakeholders. They will have differing intentions, opinions and understanding of the project’s outcomes.
- Risk of failure. When there is no clear, recorded charter, the project is more prone to fail. The project charter serves as a constant reminder of the project’s purpose, goal, objectives and critical success factors.
- Lack of authority. The project manager will be plagued with problems from lack of authority to spend the budget, the ability to acquire and assign resources, and the power needed to make day-to-day decisions and take action. This will also make it harder for the project manager to attract good contractors and other resources to work on the project, which can create a culture of dissatisfaction and apathy within the existing project team.
- Subject to scrutiny, delay and bureaucracy. The project can expect numerous changes and deviations, which increase the risk of not achieving the project goal or benefits and could eventually become a burden to the organisation.
The charter protects us from uncontrolled scope changes that will invariably arise if we begin the work with only a vague or assumed and undocumented understanding of the project. The charter document also helps us project managers communicate our authority and explain to project participants and stakeholders such things as why the project is needed, who it involves, how long the project will take to complete, how much it will cost, and how successful completion of the project will help the organisation. Once created, the document may need occasional amendment as circumstances change and some objectives become unrealistic. A new or amended charter also needs sign-off. So charter version control is important.
While the project charter establishes the authority assigned to the project manager, it also serves as an efficient and consistent means of communicating the project definition to people who were not involved in the charter development, such as those who join the project team later, contractors and other resources who will work on the project, or managers of the functional departments from whom the team members are drawn. We might also have those functional managers, who lend their resources to the project, endorse the contract and any subsequent amendments. Of course, the charter is not the end of the project management process but rather the beginning. It is the launch pad, a set of broad guidelines to empower the team and set them in the right direction with an understanding of the boundaries within which they must work.
NZIM Diploma in Project Management (DPM) programme participants’ first assignment is to prepare a charter for their selected project, which may be a personal project, a community project or a work-based project of sufficient size and complexity to properly practise participants in the application of the various tools and techniques they learn during the classroom sessions. The suggested format for this charter document is at Appendix Three (pages 489-491) to “The Framework” textbook. Check here. While ideally the same project should be used for all four DPM assignments, in reality this is not always practicable. Projects can be stopped for all sorts of reasons. In some instances a different project might be used for each of the four assignments. Also, on occasions the project duration may be such that the final assignment (project assessment report) will need to be an interim assessment report. All assignments are treated as commercial-in-confidence documents.