Why “Red” May Be Good for Your Project

By Jack S. Duggal, MBA, PMP | 09 October 2009

Do you use a traffic light approach to communicate project status? Do you get frustrated at times that the color does not necessarily represent the true status of your project? Do you spend a lot of time defending the color, and find that even after detailed explanation the status is misunderstood by your project stakeholders? You are not alone.

Traffic light project status reports are popular with senior managers and executives, but they are also a source of misinterpretation, confusion and frustration. Red, amber/yellow and green—also known as RAG—reports are widely used because they are a simple, visual way to communicate project status.

Just like traffic lights on the street are wired to a timing mechanism that causes the light to change color, the status reports should be wired to objective criteria. For example, if a project is within a 5% variance it may be green; between 5-10%, yellow; and greater than 10%, red.

Unlike street lights, though, project status lights are often misinterpreted. Typically, nobody likes red status on a project, which is interpreted as bad, so everybody wants to see green.

But contrary to conventional thinking, red may not necessarily be bad and green may not necessarily be good for your project.

Red may mean that there are some changes or issues caused by customers or stakeholders that have pushed the project past the variance threshold. Despite this, it may be good for the overall achievement of the project objectives. It may mean that the project manager is doing a good job of engaging and listening to the stakeholders, or that the project team is not complacent.

On the other hand, green may be a symptom that the project team is narrowly focused and is actually underachieving the project goals. It can also signal that the project is being re-baselined frequently. A prolonged green status can also make the project team too comfortable, and not prepared for unforeseen risks and issues.

Because of these misconceptions, traffic light status reports are prone to being gamed by project managers, who learn to manipulate the colors to fit their management’s expectation and organizational culture. There can also be mistaken expectations, since, while traffic lights change in a linear, predictable pattern, projects can change state at random, and jump from green to red in an unpredictable way, often without warning.

It may be a good idea, then, to try a different approach, even if you find it difficult to abandon the traffic light reports because senior managers are used to them. Instead of traffic light colors, use straightforward data and numbers to communicate status.

Here are some tips to make your status reports more effective:

  • Calculate the overall health of the project with a balance between objective measures like schedule variance and cost variance, and subjective measures like number of issues and stakeholder engagement.
  • Periodically review and recalibrate the variance thresholds that trigger project status change.
  • Provide a balanced perspective by using two lights—one based on the objective calculation of defined thresholds, and the other a subjective light based on what the project manager feels is the true status of the project.

Traffic light status reports can be frustrating for project managers. You have to educate senior managers about the purpose and intent of traffic lights reports and why, because of their tendency to be misinterpreted, you may be better off without them. Remind them why “red” may not necessarily be bad for your project.


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