The project charter is a set of a documents that provide purpose and motivation for the initiative, 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 to managing the project, meeting deliverables, etc

It can also be a good 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 what the intended goals are and how success will be measured.

Project Charter Overview

Remember, a project charter is a living document. You will update this throughout the course of 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 quantitatively describe the conditions that adversely impact the business and have to be addressed through the six sigma projects. The problem statement describes the gap between the current state and the desired state. It describes the problem you are trying to solve or the opportunity you are trying to capitalize upon in an objective manner without commentary or opinion.

Do not suggest cause, 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 analyze phase. Keep an open mind at this point of the define phase. A micro problem statement is a granular statement of the problem defined in the charter, hence a brief summary will suffice.

Goals and Objectives

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

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

The goal statement should cover the anticipated benefits. Furthermore, think about anticipated return by providing precious time, manpower, and budget to this effort. Once you have performed 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 clearly and concisely lay out a case for management to select this project. Remember, even though the team may have a great need for this project, it still has to compete against projects in a larger portfolio at the department, division, or even corporate level for scarce resources. Since no company has unlimited resources, thus you want to give management a compelling case 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 provides a reason the project should be undertaken by identifying the project needs, remember this differs from the client’s wants.

Business case helps to understand how the project is linked with the overall business objectives. In other words, it describes what the project does to impact the company’s strategic imperatives. If there is no tie to strategy, there shouldn’t be a project! These ties also serve as motivation for 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 process’s start and endpoint and gives an insight into 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 the creation of project scope.
Also, remember that no organization has an infinite appetite for cost, schedule, or scope. Hence, there is always a chance to do a follow-up project to address items you don’t on your first one. Identifying and naming project scope usually involves tradeoffs to focus on the organization’s most critical needs.

Milestones

Teams should ensure a date is provided for the end of each of the DMAIC phases and that all team members agree that the dates are plausible given what the group wants to do. 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 dates seem implausible, teams can review with your sponsors and present a counter schedule with logical arguments regarding why the original schedule wouldn’t work. For schedules, use project management tools to reverse engineer the tasks and activities needed to complete all of the objectives and ensure that you have the appropriate time to accomplish everything necessary.

 Stakeholders

Listing major stakeholders on the 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 initiate changes that might have a negative or unwanted effect on other process owners or processes, 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 assumptions and dependencies with Stakeholders. Be transparent. Perhaps they can remove some obstacles or know of better ways to ameliorate the risks. Sometimes sponsors who have a greater or more comprehensive view of the organization will be privy to dependencies that your team is not aware of.

Constraints & Dependencies

Identify constraints and dependencies of the project, including some global variables that need to be true i

Identify constraints and dependencies of the project, including some global variables that need to be true for the project to be a success and its impacts if not true. For example, if oils’ price is below $90 / barrel or only less than 50% of Americans pro with self-driving cars. Identify the crucial things for the project’s success and also the showstoppers. In other words, are potential events out there that could totally derail our effort?
Note: You could list everything in the world on this list. The best course of action is to focus on the critical few that are worth considering.

Roles & Responsibilities of team members.

A team performs optimally when all the members have appropriate roles, and they 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 a FMEA). If that’s the case, you would include them in the appendix for context. Also, include the budget or reference analysis, but it is not mandatory.

Project Charter Template

Helpful Project Charter Videos

Six Sigma Black Belt Certification Project Questions:

Question: In order for a problem to be solved correctly, which of the following must occur first? (Taken from ASQ sample Black Belt exam.)

(A) The problem must be defined.
(B) Relevant data must be gathered.
(C) The measurement system must be validated.
(D) The process must be mapped.

Answer:

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Project Charter Questions

Question: What is wrong with the following Business Problem statement?

We (Santa’s elves) started receiving a lot of letters complaining about erroneous coal deliveries on Christmas. Our goal is to create a specialized group of senior elves to handle this topic.

Answer:

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Question: What is wrong with the following Business Problem statement?

The Tooth Fairy’s tooth-reclamation process is not optimal and a lack of communication leads to poor results.

Answer:

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Question: What is wrong with the following Business Problem statement?

The Letters to Santa client communication effort has led to poor results. We are unable to receive children’s toy request in a quick enough manner and our turn around cycle time leads to additional poor practices. By creating a computer-based system to handle all external communication we should be able to reduced cycle time to 2 days and reduce incorrectly-delivered toys by 75% by December of next year.

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Question: What is wrong with the following Business Problem statement?

The average processing time for Santa’s elves to verify the Naughty and Nice list exceeds staffing allowances. The distribution of verification times is not even and the outliers in morally grey areas can take weeks. This significantly impacts the staffing model.

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Question: What is wrong with the following Business Problem statement?

The travel policy for the tooth fairy’s teeth collection unit is not documented and the practices are not uniformly applied. The opportunity exists to document the process, update the training modules, and monitor compliance with strict controls.

Answer: 

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Question: What is wrong with the following Business Problem statement?

Some group inside Global corporation X has a client acquisition cost of $20 per client. That group has an internal goal of client acquisition costs of $15 by the year 2020.

Answer: 

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