Some organisations use one overall RAG status but this can be too macro a level to be useful. For example, if you have a project RAG status of red, you have no understanding of why it is red unless you look at a commentary against the RAG.
In Bestoutcome, we use a number of RAG traffic lights as well as an overall RAG indicator. This advantage of this approach is that stakeholders can scan down the set of RAGs and quickly see the underlying cause of a red status. In PM3, our PPM tool, you can have up to 10 status indicators for a project or a programme. Our standard ones that we use are:
So you may have an overall red status for the project and a red status for team indicating that the overall red traffic light is because the team is underperforming.
Although, in our opinion, having a set of RAG indicators is an improvement over having just an overall one, there are two problems with this type of reporting.
First, some people have different interpretations of what red, amber or green actually mean. Some people are more conservative and would mark their project red whereas others are more optimistic and would assess the same project as green. There is therefore a lot of subjectivity in the use of RAG traffic lights. What is needed is a more objective assessment of each RAG indicator. For example, in PM3 if the default tolerances are used, and the costs of a project exceed the original budget by 10% then it should be assessed as red. If it exceeds the budget by between 3 and 9% then it should be amber and if it is within 3% then it is green.
If you define criteria for each RAG traffic light then this will help to ensure that you drive consistency of reporting across an organisation. Our tool, PM3, allows you to assess each project in this way giving you greater reporting consistency across your organisation.
The second problem with RAG traffic light reporting is that some project managers are loathe to assess their project as red. This can be down to many factors but it is often due to a project manager being worried that he or she may get fired if their project is assessed as red.
Red traffic lights can be a very good way of getting attention from the stakeholders or sponsor. Action can then be taken to address the root cause of the Red status. The earlier you highlight problems with a project, it is typically less costly to rectify. Hiding a red project by assessing it as amber or green is likely to cost you time and money as the corrective action happens later than it should.
A red traffic light status should not be considered as unacceptable. On the contrary, an objectively defined red traffic light should be considered as a positive statement by the project manager who may require help and support to put the project back on track. Conversely, a project manager who hides a red traffic light status is probably going to cost the organisation more in time and resources to rectify the underlying problems as they are often highlighted at the last possible moment when a red traffic light can no longer be hidden.
For more information on this blog or about PM3, please email us at firstname.lastname@example.org
Image by: alistair.gollop
About the author
David Walton – I am David Walton, Programme, Project and Portfolio Management specialist and director of Bestoutcome here in the UK. We make the PMO tools PM3, PM3time and PM3NHS, the only PMO tools designed by practitioners for practitioners.