What is a Business Charter

You need a charter for your projects. Here's what that means.

All projects should have a charter defining the type and extent of the work and management's expectation of the results. Charter is a succinct text that contains some or all of the following points: The creation of a charter obliges leaders to formulate clearly what the action should be. Philip was the patron of his company's efforts to overhaul its order processing and client services.

For a long period of his life, he was unhappy with the amount of order processing and with the company's poor level of client support, and he thought the expense was too high. So, he hired Lila to do a job on her to make her better. So what kind of reduction in expenses did Phil expect?

Exactly what were his grievances about the present system? How would your results look like? Purple tried to commit Phil to these issues, but without succeeding. It was too preoccupied to think everything through and too keen to assign responsibilities for the result of the work. Others, like Phil, had no clear idea of what the desired results would be, but were excited to see improvement.

When Lila asked the executives about this topic, they did not name any concrete targets. Without instruction, Lila and her teammates would develop their own objectives and performance metrics. Lila told Phil about the 10 months of work and the results of the work. Resource has always been a concern, especially as Lila was never sure how much she could afford to pay and how many members she could bring into the squad in important phases.

In the end, the squad did its job and fulfilled all its self-imposed targets. As a result, order completion times were reduced by one third and total order processing and after-sales services by 12%. Members returned to their normal roles and the teams had a great supper. This is a usual situation, but can be prevented with a charter that defines the aims, timeframe and size of the work.

The case of Lila shows that more than a comprehensive outline of the goals for which they will be accountable is needed by those in charge of the projects. "What exactly does that mean? Hurry, what's "fast"? How far does the location have to be cost-effective? Any of these should be addressed in agreement with the promoter and the main interest groups.

As well as defining concrete, quantifiable goals, you need to set a timeframe for their achievement. You can' t have an indefinite duration. Sometimes the period must be fixed, and the extent becomes flexible. Projects teams must adjust the size of their new release by either including or omitting functionality to keep to each release date.

Conversely, when the size of the projects is defined, a logic time limit can only be defined after the leader of the projects and the teams have divided the goals into terms of reference and estimated the length of each one. However, the Charter should contain a suitable period of time which can be modified if the action plan teams learn more about what they have to do.

Naturally, there are always more rich opportunities than just timing and resource. A useful way to make the right decisions is for the main interest groups and actors involved in the projects to participate in a brain-storming session to identify what should and should not be within the limits of the scale. Consider the sponsor's expectation (the objectives to be sought) as part one of the charter and the action plans (the means) as part two.

Usually the volunteer program leader prepares the schedule, but it's important to get the sponsor's consent so you don't run into the same issues that Lila had with Phil. In the ideal case it will represent the best idea of many or all members of the group. It' serve as a roadmap for the entire group.

Project management for large and small scale ventures, Harvard Business Review Press, 2004.