The Essential Guide to Creating an Effective Team Charter

Smartsheet Contributor Kate Eby

January 27, 2017 (updated July 25, 2022)

What’s the difference between an effective, cohesive work team and one that isn’t? There are a lot of factors, but one often-overlooked, yet highly important aspect is a team charter. A team charter spells out the “North Star” for your team - not just the goals of management, of one stakeholder, or of the loudest team member. A team charter can help create energy, focus, and buy-in from members joining your team, or it can help recharge a team that has been in existence for a long time, but needs to regroup and refocus.

In this article, we’ll explain why team charters can be effective and present a strong opportunity for everyone on a team to do their best work. We’ll walk through the steps of creating a team charter that includes every team member’s input, which will not only hold everyone accountable, but also empower individuals to contribute in a focused, effective way.

Definitions: What Is a Team Charter?

A team charter is a document that states a team or project’s mission, scope of operation, objectives, consequences, and time frame. All team members help to create the team charter.

Team charters are essential because they are used to pinpoint shared goals, get buy-in from individual members, and keep the team cohesive. They also help keep the team on track by articulating the overall purpose.

This leads to the question, what is a team? A team is a group of employees, managers, and even long-term contractors who work together over a lengthy period on a variety of related projects. If members come and go over time, it’s important for the new team to regroup on its charter, and not simply pass it along, or it will become an unhelpful relic.

Some executives may be more familiar with a project charter than a team charter. They serve similar purposes, but for different groups and goals. A project charter covers terms of a specific project, which may last weeks or months (or even years). The defining factor of a project charter is that it applies only to the team and for the duration of a specific project. Such projects could be the creation of collateral for the release of an update to a product, a public-relations initiative, the construction of a building wing, and so on. After the project is concluded, the charter no longer applies.

A team charter, however, takes a bigger look and a longer view. Team members may also find themselves as members of various project charters in their work, and as such the project charters should fit together with the team charter agreements.

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What Is the Benefit of Having a Team Charter?

A team charter should provide a succinct vision and mission that everyone on the team supports. The charter should also be a yardstick that can be held up against any activity considered or pursued by the team. 

Once a team has been announced or created, all members should come together, before tackling any specific deliverables, to create the charter. In this way, all members get a voice, which can help assure their support and buy-in, and increase accountability. The purposes of a team charter include:

  • Getting the buy-in of all team members, including ones who may have initially resisted being included 
  • Holding team members, including leadership, accountable to all the same principles
  • Spelling out roles and responsibilities in a clear, measurable way
  • Defining operations, including ways to adapt to change, address roadblocks, and even define actions like attendance
  • Demonstrating the team’s purpose and mission transparently to others in the organization 
  • Providing clarity and reducing confusion in cases where conflicting asks or projects arise

 

“Why you’re creating the team in the first place should lead your team charter,” says Debbi Tillman, Director of Program Management at Mitchell International in San Diego. “And you need a team charter any time you need to form a deeper synergy among team members.”

“This can be especially critical if you are bringing together two teams that have previously worked separately,” Tillman continues, “Getting everyone’s input and buy-in is really critical to the success of your new team.”

Skipping the Team Charter: Risks to Optimal Success

Although it takes time to create a team charter, it’s risky to skip this step. Not having a charter often results in chaos and missteps because there is no clarity around roles, operations, or the team’s overall direction.

“It doesn’t have to take a long time to create the charter,” Tillman says. It could range from an afternoon or up to two to three days, depending on the size and scope of the team. “But as the principles of Agile say, ‘You have to move slow so you can move fast.’ In other words, take the time for everyone on the team to create the charter, so that everyone is clear and feels empowered to move forward.”

When a team charter is written down, it becomes a powerful toolbox. “It becomes deliberate instead of guesswork,” Tillman adds. “A big risk to not having a charter is inertia. In other words, the loudest or most intimidating team member may end up pushing forward his or her agenda. And this isn’t what the entire team signed up for.”

How to Create an Effective Team Charter

Since teams are made up of individuals with different motivations, team charters should reflect the team’s many dimensions. Additionally, they should include the team’s focus, priorities, and values. 

From who’s involved to the charter’s duration, consider the following questions:

  • Who is involved: Every person on a team should be involved, or it will end up struggling or failing. Working through resistance or ambiguity in the creation of a team charter at the beginning will “forge bonds and set the foundation” for success, says Tillman. No one gets to opt out.
  • Who is the team leader, and who resolves conflict: A key element to decide early on is the team leader, who is second in command, and so forth. If the team is big enough, there may be leaders over different subject areas. These should be agreed upon together and written as part of the charter. The same thing goes for how conflicts are resolved, and if there is an escalation path that should be documented.
  • How long does the process of creating a charter take: This can vary. Many business leaders say the time frame can be from a half day to a two- or three-day workshop. The key is ensuring that all members of the team contribute, and that once the charter is created, everyone feels good enough to sign it and proceed with their work.
  • How long does a team charter last: The team should decide if the charter will cover all work for a quarter, a year, or ongoing. If the team can agree on a charter that covers a full year, with occasional check-ins as needed, they can feel empowered knowing that it won’t be subject to frequent change.

Below is a diagram that shows typical steps involved in creating a team charter. Note that these pieces don’t necessarily have to be done in any particular order, but all these steps are required to create an effective team charter.

First Element of a Successful Team Charter: Background

Team members should come to the charter creation meeting with any actions or decisions that have led them there. Bring as much information as possible to make your team background outline. 

From identifying leaders to stakeholders, here are some questions to ask:

  • Who is the team leader? When that person isn’t available, who is the second in command, and so on?
  • What do key stakeholders need and expect from this team?
  • What does each team member bring to the team, and what are their individual expectations? This last question is essential to get support and buy-in, especially if there are any reluctant parties.

Second Element of a Successful Team Charter: Mission & Vision Objectives

Once you have established the background and leadership of the team, you can focus on the deeper aspects of the charter. These items will become the guiding principles that all team activities should support. 

Key items are as follows:

  • Decide what success looks like. How is it measured?
  • Spell out the principles to guide the team for the length of time  they will work together.
  • Define the key role that the team plays in the success (financial and otherwise) of the company.
  • Craft a mission statement that is succinct. This may or may not be shared more widely beyond the team, but keeping it succinct means it’s easy to mentally grasp and perform checklists against. Tillman says, “My [program management] department’s team mission statement is: ‘We operationalize calm.’ This is part of our value proposition to the entire organization, and we really try to measure everything we do against that.”
  • Create interim deadlines, goalposts, and milestones, to determine how work, performance, and team interactions map back to the charter.

Third Element of a Successful Team Charter: Roles and Responsibilities

Once you have created your mission statement and each team member has shared their background and motivations, define the team’s roles and responsibilities. 

You can now write down and define these roles, as follows:

  • Spell out who is doing what and for whom.
  • Assess all the expertise needed for the team to achieve its goals.
  • Note gaps to fill. Are new team members needed (contract, part-time, occasional participants from within the company)?
  • Create a RACI (Responsible, Accountable, Consulted, Informed) matrix of roles and responsibilities.
  • Ensure that every team member’s voice is sought, recorded and reflected in the definitions. This is key to both the charter and the team success. If even one team member doesn’t feel heard or involved, or doesn’t support the structure, the team likely won’t succeed.

 

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Fourth Element of a Successful Team Charter: Budget and Resources

Once you have defined roles and responsibilities, the team can assess its budget and resources for the tasks at hand. There are typically two ways to determine a team’s budget: the top-down method and the bottom-up method.

  1. The top-down method: In this scenario, the team uses the budget provided for the relevant time period, and decides how to divide it up among projects and tasks.
  2. The bottom-up method: There is often not enough time allotted for this method to be used, but it can be much more strategic and useful. In this method, the team as a group (or a dedicated sub-group) decides what kind of budget and resources it needs for its operations, and requests it of the larger organization.

However the budget is ultimately determined, it’s up to the team to ensure that the resources are then allocated correctly. Then the team can create a team budget that reflects projects and milestones.

Fifth Element of a Successful Team Charter: Internal Checks, Balances, and Reviews

A team charter is as effective as the actions that are measured against it, so it’s important for the team to discuss how it will handle internal checks, balances, and reviews. Charters should establish expectations, check-ins, and members’ individual goals. 

Team leaders should decide, also, whether team goals assigned to members will be reflected in the team members’ annual reviews. An efficient system is the use of SMART goals. These goals should be:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Time-based

On Debbi Tillman’s team at Mitchell International, some of the team’s goals become akin to a company “service-level agreement.” For instance, as part of her program management department’s team charter, members have agreed that for every request of someone in the department, that person will get back to the requester within two hours. Additionally, any request and next steps will never have more than a two-day wait.

It’s also critical to spell out team members’ accountability. This applies to everything from attendance at team meetings to broad deliverables.

Finally, this step should ensure that there is no confusion about performance and individual comportment as they map back to the highest levels of the team charter.

Sixth Element of a Successful Team Charter: Team Member Assessment and Evaluations

To ensure the team doesn’t revert to a top-down model for evaluations, individual contributors should have the opportunity to give feedback on team leaders’ performance. Additionally, creating a culture of peer-to-peer feedback ensures that everyone’s perspective is heard.

Where to Learn More about Effective Team Chartering

If you’re interested in learning more about the theory and application of team chartering and how to create an effective team charter, there are several business books with useful information. Here are a few:

“The Six Sigma Way: How, GE, Motorola, and Other Top Companies Are Honing Their Performance”, by Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh.

“Creating Effective Teams: A Guide for Members and Leaders”, by Susan Wheelan.

“Creating Productive Organizations: Developing Your Work Force Manual”, by Elizabeth A. Smith.

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