TECHNIQUE 10 Project Charter

Scenario To demonstrate the basics of innovation financial management, we ll continue the Pikes Peak Coffee example from the Project Charter technique (Technique 10). The company can use this approach to determine the profitability of adding a healthy, portable breakfast offering to its menu. 

What job, problem, or task creates the focus for your innovation effort What are its associated customer and provider outcome expectations Have you already created a project statement or job statement See Jobs To Be Done, Outcome Expectations, and Project Charter (Techniques 1, 2, and 10 respectively). 

Regardless of the degree of innovation you re hoping to accomplish, you should always make time for a Project Charter. It s important to note that the Project Charter is not a static document you finalize early on, but rather a dynamic technique that should be revisited, refined, and updated throughout the life of the project. 

The Project Charter and Innovation Financial Management are two of the most important techniques in this book. After all, you can generate thousands of clever ideas, but if no one needs or wants what you have to offer then your time and money is wasted. Therefore, don t overlook the value of spending time up front, and throughout the project, continually verifying that your innovation is marketable, feasible, and able to bring your organization a profit. 

Scenario Pikes Peak Coffee owns 32 coffee shops in three Western states. For the past three quarters, the company has failed to deliver the type of growth that stockholders are accustomed to seeing. One idea to spur growth is to add a healthy, fresh breakfast item to the menu. Thus, the innovation project Operation Feeding Frenzy was begun to determine what type of breakfast offering would outperform the competition. We ll use the company s Project Charter to demonstrate this key technique (Exhibit 10.1). 

To ensure that your innovation will provide real value to customers, it s important to understand the major outcomes that are not currently satisfied by existing solutions. Use Outcome Expectations (Technique 2) to generate a list of expectations associated with the JTBD. Then, on the Project Charter, list the key unmet expectations. Use the format direction (minimize), measurement (time needed to acquire), object of action (breakfast), and context (in the busy morning). 

Most business endeavors evolve from a series of assumptions related to functionality, outcomes, value, process, price, and so on. To identify which key assumptions need to be tested for your innovation, start by creating a comprehensive list of assumptions that are built into your idea. You can use the approach of Innovation Financial Management (Technique 11) to help with this task. Once you have a comprehensive list, prioritize your assumptions and select ones that will have the greatest impact on the success of the innovation. List these on the Project Charter. 

Financial projections are often one of the most scrutinized aspects of an innovation Project Charter, especially when executives are trying to select which few innovation projects to fund. Almost all financial projections include estimates of revenue. Or, you can estimate profitability using Innovation Financial Management (Technique 11). Either way, the financial projections listed on the Project Charter should be estimated from the point your innovation will be available to customers, and should align with the company s current accounting periodicity (monthly, quarterly, annually). 

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