1. Project Initiation: Setting the Stage for Action Chapter 4 Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2. Chapter Learning Objectives Describe the importance of a sponsor-initiated project charter. Create a project charter where none exists by obtaining answers to key project initiation questions. Work with a team to establish a clear, shared understanding of a project’s mission or purpose. Create a clear, specific objective statement with measurable goals. Assess stakeholder needs and develop a plan for gaining and maintaining their support. Define project deliverables and associated performance measures. Create an effective team in the context of organizational structure. Establish and maintain contractual relationships to support the project. When you have mastered the material in this chapter, you should be able to: 4-2

3. Project Initiation: Setting the Stage for Action “The beginning is the most important part of the work.” Plato 4-3

4. Exhibit 4.1 From Business Case to Project Initiation Document 4-4

5. The Project Charter A document that announces a new project has begun and shows the project has been sanctioned by the organization. The project charter establishes the authority of the project manager and links the project to the organization’s broader mission and strategic goals. Although funding and deadlines may be modified as the detailed project plan unfolds, the baseline data provided in the project charter give the project team a general sense of the purpose and scope of its task. 4-5

6. Questions the Project Charter Answers What is the purpose of this project? What is the project objective—what is the project supposed to accomplish? What business result is expected from this project? Who is the customer and how will the customer judge the performance of this project? Who is the project sponsor? Who are the other project stakeholders? What specific deliverables are expected? What is the preliminary budget? When is the project expected to be complete? How will the project fit within the larger organization structure? (e.g., will it be contained within a single function, will it be cross functional?) Will the work be performed by existing employees, new employees, an outside contractor, or a combination? What is the relationship of this project to other current projects? How will my performance as a project manager be measured? In the absence of a formal charter, ask these questions, document the answers, and discuss with the sponsor. This informally generated charter can then be distributed to key stakeholders. 4-6

7. Exhibit 4.2 Sapphire Medical Devices Project Charter continued 4-7

8. Exhibit 4.2 Sapphire Medical Devices Project Charter 4-8

9. Project Initiation Elements Confirming Project Drivers: Why Are We Doing This? YB4WHAT Expected Outcomes Deciding on a Course of Action Project Objective Statement Project Metrics Determining Scope, Boundaries and Deliverables Identifying and Understanding Stakeholders 4-9

10. Exhibit 4.3 Agenda for a Project Launch Meeting 4-10

11. Project Objective Statement (POS) A simple statement of what the project will accomplish. POS should be: Shared: Reflects the team’s consensus regarding what the project will actually involve. Short: Between 25 and50 words. Limiting the statement length forces clarity; if the team cannot explain the project goal in a brief paragraph, then the team itself may not understand the objective. Simple: Free of jargon and acronyms Specific Measurable Time constrained 4-11

12. Exhibit 4.5 Project Objective Statement Examples 4-12

13. Exhibit 4.6 What Versus How Teams fare best when given clear goals but asked to apply their own talents and skills to determine the best means by which to achieve those goals. Failing to specify the intended goal leads either to chaos— unspecified activities with no particular objective—or worker turnoff—people are told what to do but do not know where they are headed. The organization’s resources are squandered and team members’ contributions devalued when talented people are given a specific objective but also told how they should go about achieving it. 4-13

14. Exhibit 4.7 The Contribution of Goal-Setting Research to Project Management 4-14

15. Developing Detailed Project Metrics A project team must understand how the success or failure of the project will be assessed – how key stakeholders will evaluate project performance. The business case and charter provide preliminary ideas on project metrics. Teams may also engage in success visioning: A process used to identify key success measures for a project. The project team envisions what the successfully completed project will look like and uses this to develop a list of specific measures that would assess the project’s success for each of the identified stakeholders. 4-15

16. Exhibit 4.8 Success Metrics for Sapphire Medical Devices PMO Project 4-16

17. Project Scope, Boundaries and Deliverables A scope statement expands on the project objective statement by articulating, in finer detail, what will be done, by when, at what cost, and with what resources. The statement also describes what is not in scope. This can help reduce the likelihood the project will later become subject to scope creep, the tendency for a project to grow in size beyond its initially envisioned boundaries. A key output of deliberations around scope, boundaries and deliverables is a set of acceptance criteria that define the finished product. 4-17

18. Exhibit 4.9 PMO Project Scope Statement The scope statement is more detailed than the charter. It incorporates some changes, which have been underlined as a way of emphasizing that they are new additions or modifications. For example, the team’s research and analysis about the volume of projects at Sapphire has led team members to recommend eight project rooms instead of the six prescribed in the charter. 4-18

19. Identifying and Understanding Stakeholders A stakeholder is anyone who participates in the project or who will be affected by the results of the project, and may include the project manager, the project team, managers at various levels, the project sponsor, the customer, and other people and groups within and outside the organization. Customers are those who will use the final deliverable and, depending on the project, can be external or internal to the organization undertaking the project. Beyond customers, external stakeholders might also include shareholders, the community in which the organization operates, the organization’s supplier base, and so forth. 4-19

20. Exhibit 4.10 Stakeholder Analysis Process 4-20

21. Exhibit 4.10 (continued) Stakeholder Matrix 4-21

22. The Project Communication Plan Continuous, effective communication is a defining characteristic of most successful projects. A communication plan is a written strategy for getting the right information to the right audience, at the right time and via the most appropriate medium. The communication plan should address (1) Communication with key project stakeholders (2) Communication within the project team Status reports and meetings are the typical mechanisms for communicating within the project team Tailor the format and content of the communication to the intended recipient. 4-22

23. Exhibit 4.12 The Distribution List That Fills the Screen. DELETE! 4-23

24. Exhibit 4.13 Sample Status Report Agreement 4-24

25. Exhibit 4.14 Sample Team Reporting Template 4-25

26. Project Team Composition: Key Points to Consider Knowledge and Technical Requirements Team Member Representation Working Together Team Size Time Available Co-Located or Virtual 4-26

27. Exhibit 4.15 Assessing Team Skill Needs – Sapphire PMO Project Skills Requirements 4-27

28. Exhibit 4.16 Internet Resources for Virtual Teams 4-28

29. Where and How Does the Team Fit Within the Organization Structure? As part of the chartering process, the team and project manager must establish: How they fit within the larger structure of the organization. How informal structures will interact with their efforts. These relationships will determine: The authority of the project manager The nature of the work assignments for team members (e.g., full or part time) How performance will be reviewed How decisions will be made Where there will be links with entities outside the boundaries of the organization Many project managers have faltered because they failed to understand these contextual matters. 4-29

30. Structural Forms and Projects: Some Options Functional Organization Structures Projectized Organization Structures Hybrid Structural Forms Matrix Organization Strong (heavyweight) project structure Weak (lightweight) project structure\ Balanced matrix structure Composite Organization Structure Networked Organization Form 4-30

31. Exhibit 4.17 Functional Organization Structure Advantages of this structure for projects? Disadvantages? 4-31

32. Exhibit 4.18 Projectized Organization Structure Advantages of this structure for projects? Disadvantages? 4-32

33. Exhibit 4.19 Matrix Organization Form Advantages of this structure for projects? Disadvantages? 4-33

34. Exhibit 4.20 Composite Form: Functional, Projectized and Matrix Combined Advantages of this structure for projects? Disadvantages? 4-34

35. Exhibit 4.21 Factors to Consider in a Project Contract 4-35

36. Exhibit 4.22 Project Initiation Document continued 4-36

37. Exhibit 4.22 Project Initiation Document continued 4-37

38. Exhibit 4.22 Project Initiation Document 4-38

39. Chapter Summary A project may begin with a formal charter or with less definition. When there is no charter, the project manager should ask a set of questions about the project’s purpose and parameters, with a goal of creating a charter for approval by the sponsor. With a formal or informal charter in hand, the project manager can initiate the project with a team kickoff meeting. During initiation, and with the support of background research, the team expands and revises the charter to more fully develop project parameters and create a project initiation document. If this document differs in substance from the charter, the team will need approval from the sponsor before it proceeds. Project launch activities also include clarifying and gaining an understanding of who will be on the team, where team members will be located, how the project links with the organization’s structure, and the nature of external contracting needs. 4-39