Yellow: Potential issues with schedule or budget, but both can probably be saved with corrective actions.
Green: On schedule, on budget, all good.
The red/yellow/green approach seems simple and logical. You only worry stakeholders if something goes wrong, so green projects do not need much review or attention.
However, in my experience the color approach has many shortcomings and potential repercussions. Let’s look at few.
Expectations
What happens when a green project turns yellow or red? In my experience there is an emotional conversation with stakeholders. Here are some of comments I frequently hear when a project goes from green to yellow:
“What went wrong?”, “Why didn’t you manage this project better?, “How can we avoid this happening again?”, “Why didn’t you see this coming?”.
As a project manager I often feel great guilt with these conversations and I too question my competency. But if we spend a moment and work our way through the guilt and emotion, we can see this issue from a more analytical perspective.
Not in line with normal project uncertainty
You may be familiar with the cone of uncertainty. The cone of uncertainty tells us that you cannot completely understand all of the tasks and potential issues within a project, at the beginning of a project.
As the project progresses we learn more and there are less risks, but we can never anticipate everything that could go wrong until the project is 100% complete.
When we label a project as green we are telling the sponsor everything is OK, today.
Sponsors interpret green as everything is OK today and it should be for the entire project. It is human nature to assume the project is under control and should stay under control.
A Different Approach
But since any experienced project manager knows that green does not necessarily mean green forever, we need to speak in verbiage that stakeholders can relate to. To address this issue I have changed my color scheme when working with sponsors and removed green from my status options.
My options are now:
Yellow: The project does not have any known issues but there is still high risk that something could go wrong (as demonstrated by the cone of uncertainty). As with any project in flight, we are managing it cautiously and we are doing our best to deliver successfully.
Orange: An issue has surfaced and the project goals are in jeopardy. We are triaging the issue(s) and at this time we believe we can still be successful
Red: An issue has surfaced and we do not believe 100% project success can be obtained due to the discovery. More than likely we will either miss the desired date, or exceed budget, or not be able to deliver the desired scope by the target date.
Conclusion
What do you think of my approach? I welcome your thoughts. I know many stakeholders will “freak-out” at seeing no greens, but I believe all projects are yellow until they are delivered. We need to teach stakeholders that this a reality of doing business.
Don't forget to leave your comments below.
Comments
I think the question to ask is how can we effectively report in a quick and easy way the things that are important regarding the timeline around a project. I don't know if there a single thing that can effectively convey that. It seems you need a combination of information to get that message across to people.
Green: Project is in good shape and no risk at the moment
Yellow: (Warning for upcoming risks)The project does not have any known issues but there is still high risk that something could go wrong (as demonstrated by the cone of uncertainty). As with any project in flight, we are managing it cautiously and we are doing our best to deliver successfully.
Orange: (Risk identified with min damage. Can control the damage with proper measures in hand). An issue has surfaced and the project goals are in jeopardy. We are triaging the issue(s) and at this time we believe we can still be successful
Red: (Same) An issue has surfaced and we do not believe 100% project success can be obtained due to the discovery. More than likely we will either miss the desired date, or exceed budget, or not be able to deliver the desired scope by the target date.
Explainations.
For example, if an under control (green) item is near to deliver (in general two weeks before the delivery date), I change its status from greeen to yellow in order to point out that this particular item will deliver soon. If the item to deliver is a major component of the project, it can turn from green to red (meaning important delivery to come).
This way, stakeholders know that yellow or red do not automatically means "out of control" but can also mean "near to deliver".
From my experience, this way to manage the statuses keep the upper management more relax facing Y or R colors but another important effect is that it keeps them more aware of the progress of the project. It avoids having green items delivering without anyone noting... thinking that it was just normal and not seeing the work behind it.
Another option is defining and using a color continuum, from red to green, perhaps, with defined interim shades (this one invites a certain level of ambiguity).
Another option is a "weather report", e.g., green with a 50% chance of yellow by next week. That way, you get out in front of possible issues, and you avoid the "how did this happen" question.
However you do it, it is critical that everyone know and accept what a specific color means.
What is needed is communication on what the colours mean, then your visual communication tool (colour) will have a consitent meaning to the project team and stakeholders.