Are Project Charters Important?

A student in my Lean Six Sigma Black Belt training course asked the following question:

Hi Tom,

In the lesson on “Choosing the Project – Carefully Assess Candidate Projects to Assure Success”, slide # 21 – it states that the project charter has low relative important criteria, second to the last important criteria. Why is this so? This seems to contradict PMP’s recommendation that the project charter should be one of the most important items that must be completed before getting the project’s kick off. PMP suggests that each successful project needs a completed and signed off project charter. On this slide #21, are you saying that based on your experiences with the LSS organization, many of the LSS organizations put low priority on the project charter? Does this mean that many of the real life projects started without a completed and signed off project charter? If the answer to the above question is yes, please comment why.

Thanks, Mike

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Here is my reply to Mike

These criteria were arrived at by me and some of my clients using a technique called AHP (which is covered in a later lesson.) We looked at a large number of actual projects, some which were successful and some which were not (a judgment made by me and Master Black Belts after consulting participants involved with the projects.) We brainstormed a list of criteria for success or failure, then performed pairwise comparisons and calculated the importance weights. It turned out that the quality of the project charter, while important, was less important to project success than the criteria above it. This might simply mean that the projects considered all had reasonably good charters so that this wasn’t a big factor in determining success. However, the fact that the project charter made the final list indicates that it’s a big deal. For different portfolios of projects it is likely that you would get different criteria and different weights. However, the criteria have been used by me and others to evaluate hundreds of projects in high-tech manufacturing, call centers, and aerospace. I think they’re pretty solid.

This does not contradict the PMP recommendation regarding process charters. Every item on the list is important and my clients (and The Pyzdek Institute) require that all of the items must receive a non-zero score before any project is approved. Consider that there are literally hundreds of things that could be considered when evaluating a potential project; this set of 9 criteria is a very select group. The relative importance weights are used to score projects so you will have a rank-ordered list to help you choose which projects to pursue, as shown on slide 22 of the lesson. Note that I say “to help you choose.” In other words, the scores and rankings are just one input. Your judgment is also needed, and it may be that your leaders tell you to do a project despite its score.

PS: Note that all of the projects on this list have a top score of 9 for their charters. As I recall, most of the projects we looked at when putting the criteria list together also had decent charters. This would account for the relatively low importance score for the project charter criterion. It’s not that it’s of low importance, it’s just that it’s not the best way of differentiating one project from another.