The project charter is a set of documents that provide purpose and motivation for the project, serves as a working document for the team and as a reference for the rest of the company, and acts as a guiding hand for the Plan-Do-Study-Act cycle (Deming wheel, Shewhart wheel). Use it as a guide for managing the project, meeting production schedules, etc.

It can also be a suitable method of problem identification as it clearly documents the scope and business impact of the problem the Six Sigma team is attempting to solve.

The project charter should also clearly state the intended goals and how success will be measured.

Project Charter Overview

Remember, a project charter is a living document. You will update this throughout the project.

“Any road will get you there, if you don’t know where you are going.” – Lewis Carroll

The Elements of a Good Project Charter

Problem Statement

Start the project charter with a clear problem statement. The problem statement should use quantitative logic to describe the conditions that negatively impact the business, which must be solved through the Six Sigma projects. The problem statement describes the gap between the current and desired states. It represents the problem you are trying to solve or the opportunity you are attempting to take advantage of objectively without comment or opinion.

Do not suggest a cause or solution or assign blame in the problem statement; jumping to a solution is a bad idea. There will be a time for root cause analysis in the analysis phase. Keep an open mind at this point of the define phase. A micro problem statement is a short statement of the problem defined in the charter; hence, a summary will suffice.

Project Charter Goals and Objectives

Now, continue with the goal statement. Here, we want to turn the Problem Statement into objectives (things that need to be completed to consider the project a success) to understand the benefits of what the project will deliver.

The goal statement should be most closely linked with the Opportunity statement. It defines the project’s objective to address the specific pain area and is SMART (Specific, Measurable, Achievable, Relevant, and Time-bound).

The goal statement should cover the expected benefits. Furthermore, the project’s expected return should drive you to provide the necessary time, labor, and budget for the effort. Once you have completed a Critical to Quality tree, it would be a good idea to add it to your appendix and list the Critical to Quality items here.

Business case

The next step is to take what you’ve listed in the problem statement and the objectives and lay out a case for management that is clear and to the point so they can see the value of the project. Remember, even though the team may need this project significantly, it still has to compete against projects created by other teams at the department, division, or even corporate office for scarce resources. Since no company has resources for every project it needs to tackle, you want to give management a good reason for spending resources on this project.

The business case might also be referred to as the financial drivers behind a project related closely to the problem statement. The business case is a short statement that explains why the project should be started. Usually, you identify the project needs as a first step; however, it is essential to remember that this differs from the client’s wants.

A business case helps to understand how the project is linked with the overall business goals. In other words, it describes how the project impacts the company’s strategic imperatives. If there is no tie to strategy, there should be no project! These ties also drive the Six Sigma team to get the job done! Linking to business strategy is critical. (Note: Jim Collin’s books are excellent for this purpose.)

Project scope

Project scope defines the boundaries of the project. It helps to understand the start and end of the process and gives an insight into the project constraints and dimensions. It attempts to define what will be covered in the project deliverables: team champion, team leader, and the team involved in creating the project scope.

Also, remember that no organization has an endless appetite for cost, schedule, or scope. Hence, there is always a chance to do a second project to address items you don’t have in your first one. Identifying and naming project scope usually helps you decide where to focus on the organization’s most critical needs.

Process maps, Pareto charts, and other quality tools help define a project’s scope.

Process Maps

A process map is a tool that graphically shows a process’s inputs, actions, and outputs in a clear, step-by-step map of the process. They can be used to define the scope of a project by identifying the boundaries of the process being studied. This information can be used to set clear goals and objectives for the project and identify potential areas for improvement.

 Pareto Chart

A Pareto Chart is a graphical tool for mapping and grading business process problems from the most recurrent to the least frequent. It can be used to define the scope of a project by identifying the most significant issues that need to be addressed.

By identifying the most frequently occurring problems or separating the vital few from the trivial, many project teams can prioritize their efforts and ensure they first address the most critical issues.

Fishbone Diagrams

A Cause-and-Effect Diagram (aka Ishikawa, Fishbone) is a picture diagram showing possible causes (process inputs) for a given effect (process outputs). They can be used to define the scope of a project by helping project teams to understand the underlying causes of the issues they are trying to address

Control Charts

The control chart is a graphical display of quality characteristics that have been measured or computed from a sample versus the sample number or time. They can be used to define the scope of a project by establishing a baseline for the process performance and identifying when it deviates from that baseline.

Project Charter Milestones

Teams should ensure a date is provided for the end of each DMAIC phase and that all team members agree that the dates are reasonable given the group’s goals. List the tollgate meetings. In some cases, milestones might be set by the project sponsor or champion, but the team should agree that milestone dates are possible.

If the team feels the due date will not be met, they can review with their sponsors and present a counter schedule with logical arguments regarding why the original schedule would not work. For schedules, use project management tools to reverse engineer the tasks and activities needed to complete the objectives and ensure that you have the appropriate time to finish everything necessary.

 Stakeholders

Listing major Stakeholders on the project charter helps the team remember who and what they are likely to impact in addition to end customers. Having the list visible during meetings reduces the chance that the team will begin working on changes that might hurt other process owners, and it helps direct the team to resources outside of the team that can provide help, access, or information to areas related to the project. Learn how to identify your Stakeholders here.

Review the project goals and operating plan with the Stakeholders. Be ready to provide any relevant information. Perhaps they can help solve problems or find better ways to reduce risks. Sometimes, stakeholders with a greater or deeper view of the organization will be privy to issues and solutions that your team is unaware of.

Constraints & Dependencies

Identify constraints and dependencies of the project, including some global variables that must be true for the project to succeed and its impacts if not true. For example, if oil prices are below $90 / barrel or less than 50% of Americans support self-driving cars. Identify the crucial things for the project’s success and also the showstoppers. In other words, are potential events that could totally derail our efforts?

Note: You could list everything in the world on this list. The best course of action is to focus on the critical few worth considering.

Roles & Responsibilities of team members.

A team performs optimally when all the members have appropriate roles and understand their roles in terms of the overall functioning of the team. You can find a list of Six Sigma team roles here.

Possible Project Charter additions

Risk analysis– sometimes projects arise from prior risk analysis activities (like an FMEA). If so, you should include them in the appendix for context. Also, include the budget or reference analysis, but it is not mandatory.

Project Charter Template

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