articleLeanSix Sigma

How The Project Charter Evolves

By John Knotts Updated on September 7th, 2022

A Project Charter is a contract that clearly explains what the process improvement project is all about, while also clearly stating when the team intends to accomplish the objectives of the project. The Project Charter should be carefully created and then shared in such a way that the team members and leaders from the organization understand what the project is all about.

In other words, the Project Charter should not be created and then tucked away inside of a filing cabinet or drawer.

The Project Charter clearly explains the following:

  • The problem to be solved
  • How the problem will be measured
  • The objectives and benefits to be met
  • The team members
  • Intended completion dates

The challenge I run into all the time with process improvement practitioners is their concern about putting objectives and benefits on a project charter when they know very little about the problem that they are about to try to solve. This is where process improvement projects differ so incredibly from normal projects.  A normal project knows what the project will implement at the very start.  Thus, it is very easy to predict the objective of a project and the ultimate benefit.

In a process improvement project, we only know these three things:

  1. The process expectation from the business or the customer.
  2. The defect of the process (i.e., how much the process is not meeting the expectation).
  3. The impact this has on the business — the “so what?”

Typically, our expectation (or objective) at the start of a process improvement project is to improve the process so that it is meeting the expectation of the business or the customer.  If we do this, then the benefit of the project would be the amount that the problem is currently impacting the business.

Project Charter Evolution

However, typically at this point in the process improvement project, we do not know why the problem is occurring or if we really can solve it. This is why the Process Improvement Project Charter is an evolving document.  Typically, the project charter goes through at least three evolutions.  These evolutions are best associated with the benefits of the project.

Projected Benefits

When we start out working on a process improvement project, as pointed out above, we know very little.  We know the expectation, the problem, and what impact that has.  So, our goal at this point of the effort is just to get the process operating at the expectation of the business or the customer.  And, if we do this, then we should know what that benefit should look like.  At this point in the project, that is all we know, so our benefits are only “projected.”

This often scares new process improvement practitioners, because they feel that they are signing up to solve a problem to a specified objective and do not really know if that is possible.  Thus, they are worried about being held to this project charter as written at the start of the project.  The answer is, “No, the project charter will evolve throughout the life of the project.

Adjusted Benefits

As we start the process improvement effort, we start with discovery.  We are determining what is happening, where is it happening, who is causing it, and the like. Our effort is to first pinpoint or hone in on the biggest areas where the problem is occurring. This could be a process step, a specific defect, a shift, a plant, or even a person. Once we know this, we ask, “Why is this happening?” Check out my blog last month on a simplified way to get to the root cause.

Once we have the root cause identified, we can propose solutions or countermeasures.  This is where the real project starts!

Now we know exactly what we plan to do about the problem and we have a much better idea as to what the cost of these solutions will be and what impact they might have on the overall problem. The process improvement project charter is then updated with an adjusted objective and adjusted benefits. Sometimes, the project is determined at this point to not be viable because the cost to fix the problem outweighs the benefits. Thus, some process improvement projects are canceled at this point in the effort.

Actual Benefits

Once you know what you will do and you are approved to move forward, the “project” begins and you implement the solutions proposed. Once implemented, you set your process improvement controls in place to ensure the improvements stick and do not return to the old problem and you measure your results. With enough data from the new and improved process, you can now predict what the actual annual benefits will be for the process improvement.

Recognize that this is only a prediction because you are only using a snapshot of the process results to determine the benefits. However, this is when you would update the charter for one final time to reflect the actual results and benefits of the process improvement.

Charter Signatures

Most project charters have at least three signature blocks on them.  These are for the Project Champion or Sponsor, the Process Owner, and the Benefits Lead. This is another area where some newer process improvement practitioners struggle. At each stage of the charter’s evolution, these three people should be signing the charter.

Project Champion or Sponsor

The champion or sponsor of a project is typically someone who has the authority in a company to “spend” resources. By signing the charter, they are approving that company resources (time, money, and people) can be used to work on this process improvement project. At each phase of the project charter, they are approving the objective and benefits.

Process Owner

The process owner is the person that is responsible for the process that will be improved. Sometimes this person might be the same person as the champion/sponsor and other times they might not. They are acknowledging that work is being down on their process and in their area of operation and what that work will entail.

Benefits Lead

Typically, this is listed as the “Financial Lead,” however, not all process improvement projects result in a financial benefit (hard or soft savings). Some projects improve the employee experience, improve the company brand image, reduce risk, improve safety, etc. Thus, the person that would be designed as the signer here is someone that can agree to the benefit that this project proposes. This could be human resources, marketing, risk, safety, etc. This person is validating that they agree with the benefits determined at each stage of the project charter’s evolution.

 


  1. Mike F

    September 19, 2022 - 4:39 pm
    Reply

    I believe that this post will be helpful for people who might not know what a project charter is. The information walks someone through the different steps. One of the main points in this post that I personally believe was important to add was how a project charter differs from a normal project. Stating that it is possible to do all of this work and find out that there really isn’t a solution is also a great point to make. Lastly, I think it was important to share that this is a long process and will not be complete over night. I enjoyed this read. Keep up the great work!

  2. Alyssa Figarsky

    September 21, 2022 - 9:41 am
    Reply

    I enjoyed reading this post because I can relate to it. When I first began my lean journey last year, we were assigned to create a project charter for our topic. It was intimidating, as you said, I felt as if we were putting objectives and benefits on a project charter when we knew very little about the problem itself. For this class, we did not go in depth with our projects, just barely scratched the surface to go through the motions. I am relieved to hear that the project charter evolves with our knowledge and findings during the beginning phases. I will keep in mind that the real project begins after the root cause is identified. You mentioned that the process improvement project charter usually evolves at least three times. Does the last evolution always occur after the root cause is identified or can there be multiple evolutions after the fact?

  3. Emily Pires

    September 27, 2022 - 4:49 pm
    Reply

    This is a great post that really outlines what a project charter is. It is good to hear how much a project charter can evolve and if something is not working, it can be changed. This post mentions that sometimes the project is found not viable because the cost to fix the problem outweighs the benefits. I wonder how often a project gets cancelled? Do they just leave the problem to continue happening with no fix? I did not know that the project charter should be getting signed at each step of the evolution by the Project Champion or Sponsor, the Process Owner, and the Benefits Lead.

  4. Muhammad Hasan Ashraf

    September 28, 2022 - 7:23 am
    Reply

    We important information in this blog. At times we do feel confused regarding the actual process improvement plan since we have very little information about the process. All we need at this stage is information regarding three things: What is the problem, what are the goals, and who will benefit from it. I like how the process improvement projects give the flexibility to let the charter evolve as we continue working on the project. Having said that, keeping the key stakeholders such as project champions, on board is critical. They should be made aware of the changes and advancements made in the charter. Also, it is extremely important to understand that not all the outcomes would be in terms of monetary value. Therefore, it is important to determine what the benefit would look like upfront.

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