This article explores the argument for ditching this antiquated approach in favour of empirical based reporting.
Reporting a project’s health as “Red”, “Amber”, or “Green” is still very commonplace in the project management arena. The connotation these colours represent is one of the earliest concepts we develop as children and it’s understandable how they became common practice in a discipline where you need to explain complex scenarios in a concise, simplified manner. The problem with this approach is that it’s subjective, open to wide interpretation, and as a result often misleading. This article explores the argument for ditching this antiquated approach in favour of empirical based reporting.
One of the biggest shortcomings of RAG ratings as previously mentioned is how much perception of them can differ between individuals. Take a hypothetical example in which a project manager says his project’s risk profile is “Green”. The sponsor seems content and asks how many risks are being tracked and the PM replies zero. This answer doesn’t pass the “sniff test” and instantly the sponsor starts to dive deeper and becomes increasingly anxious. They learn that there are no risks being tracked because they haven’t agreed a risk management strategy. Instantly this update has gone from “Green” to “Red” as the sponsor and steering team pick at the thread exposed and pull until everything falls apart. This is an extreme example, but highlights how misleading simply labelling a colour as a status is. If a fact-based approach was used which highlighted how many risks and at what rating where open this flaw in the project’s strategy would have been highlighted much quicker.
The subjective nature also makes calibrating overall health at a programme or portfolio level very difficult. With several different project teams applying their own processes, executives cannot move between updates in an effective manner. For this reason, it’s important to not only apply an empirical approach, but one which is standardised using the same terminology, tolerances, and reporting dashboards. Having to re-learn the legends and nuances for every report is a guaranteed way to frustrate senior management.
It is possible to calibrate different RAG statuses with empirical data, for example no overdue tasks means the schedule is “Green”. This approach is not without its own disadvantages however and teams adopting it should be careful. Setting binary rules can create poor behaviours within PMOs and project teams. It can lead them to creating redundant artefacts which are not applicable to a project so they can be marked as “Green”. This leads to governance of the project becoming a “tick the box” exercise with work being carried out with little thought behind the purpose.
CloudCube, developed by Integrated Cloud, is a fully integrated Project Management application designed to present an impartial view of your project’s status. CloudCube’s Project module aims to reduce project risk, improve transparency and bring automation to project governance, allowing teams to focus on solving project issues.
The project module allows precise and detailed benefits and cost reporting to effectively track progress against business objectives. Budget and benefit targets flow down to the lowest level of project planning, helping to communicate expectations across the board. Efficient time and expense recording also ensures that financials are always accurate and up-to-date.