Six Sigma Project Charters Explained

A Six Sigma project team’s first official act is to create a project charter. Before one piece of data is gathered or one statistic is calculated, the team creates the charter, which lays out the 5 W’s of the project. A well-written project charter should answer these critical questions:

• What is the object of the project?
• Who will work on the project?
• When will the project be completed?
• Why should the company support the project?
• Where will the team get the resources it needs?

Team members who are new to Six Sigma may consider the meticulous process of creating a charter to be “busy work” and may be tempted to pass it over so they can begin the real work. This would be a mistake. The charter is an essential part of any Six Sigma project, and the foundation for the project’s success.

The charter helps the project team stay on course by concentrating on predetermined goals and objectives. It also might require management to answer some tough questions to justify the project.

• Do the project’s benefits outweigh its costs?
• How will the project impact other departments?
• How will we measure project success?

The charter has several different sections, and each one helping guide the project team to success.

Problem Statement – This initial section of every project charter lists the problem and states how the process is currently performing.  The statement should provide as much quantifiable data as possible to show the effects of the problem.  Remember, the charter is a living document that can be updated as soon as new information becomes available. So if no actual data is on hand, using an estimate is acceptable.

Business Case – This section establishes how the project advances the organization’s objectives. A well-written business case helps demonstrate how the Six Sigma project supports the organization’s strategic goals and describes how the project solves your customer’s problems. It also shows how the project will impact employees, shareholders and customers.

Objective – This is a measurable statement that illustrates how much the Six Sigma project will improve the process (e.g. reduce application processing time by 10%).

Scope – This statement tells exactly what will be included within the project. A well-defined scope statement protects the project team from scope creep. Scope creep happens when a project gradually expands and takes the project team outside its area of expertise and beyond its allocated resources. Scope can be expressed in one sentence that indicates the project focus.

Resources – These are the assets that the team requires to successfully complete the project, such as a database and key members of the project team.

Deliverables – These are the measurable benefits that the project is expected to yield (e.g. decrease costs by 15% or increasing sales revenue by 10%). Deliverables help the organization gauge the project’s success once it is complete.

Creating a Six Sigma project charter helps project teams answer difficult questions on paper to avoid making costly mistakes while executing the project. A clearly defined charter helps teams eliminate projects that have a poorly defined scope, deal with unimportant issues, pursue vague deliverables, overlap or conflict with other projects and/or focus on symptoms instead of root causes.