Red, Yellow, Green: Lessons for the Project Manager

Oct 20, 2016 by Robert Barger, MBA, PMP

This article was first published on the Knowledge Shelf on ProjectManagement.com
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red-yellow-green-pm-ratings 

Introduction

Many organizations use a RED, YELLOW, GREEN rating system to provide senior management with an easy-to-read assessment on the status of a large number of projects quickly. Green is the status given to a project that is running within budget, timeline, or expectation. Yellow is the status given when some aspect of the project is at risk or deserves special attention. Red is the status given when some aspect of the project has fallen dramatically behind, has encountered a major setback, is over budget, or is outside the expected parameters.

Left to run themselves, projects don’t get very far. Assigning a dedicated project manager helps increase the likelihood of a successful project. Notice how I don’t say that assigning a project manager guarantees success. No, we can’t fix everything, but we can be on the scene, attentive, and aware when things do take a turn for the worse. The simple fact is, projects go red. If they didn’t, the organization would not need you around. So in this respect, you have, essentially two jobs.

Why Am I Here?
As it relates to the overall health of the project, you have two jobs. You are both the security guard assigned to help protect and maintain the healthy status of the project, as well the medic, who is close at hand, ready and able to return the project to a healthy status.

Job#1 (The Security Guard) – You are there to keep the project from going red, to monitor, to anticipate, to plan, and to prepare. You should be constantly scanning, sniffing, and searching for risks or threats to the success of your project. You are looking for risks to the timeline such as:

  • Upcoming vacations that must be factored in
  • Contract expiration dates to be accounted for
  • Job satisfaction of a key resource to be maintained
  • Time zone differences that must be dealt with
  • Universal understanding of the goals and objectives that must be achieved

You are looking for risks to the scope of the project such as:

  • Ensuring that both scope in and scope out have been identified
  • Ensuring that the requirements approval has been captured (Captured, I say! Simply knowing that they have been approved does not count!)
  • Ensuring that requirements traceability in the design is clear
  • Ensuring that requirements traceability in the test scripts is clear
  • Universal understanding of the goals and objectives

You are looking for risks to the project budget such as:

  • Documenting your team’s expected burn rate throughout each phase of the project
  • Tracking their actual burn rate through each phase
  • Adding the sum of the current actual plus the future expected and comparing that to the overall project budget
  • Communicating this regularly to the project stakeholders, well before it becomes a request for more funding

Job#2 (The Medic) – You are there because the simple truth is that a project can go red all by itself. Projects can go red for any number of reasons. Sometimes, the project will go red and you will have no warning or notice. The project manager is on the scene so that when a project does go red, there is someone close to the project—someone with leadership and drive—who can step in and get the project back on course. This is where you can really show off. How will you know?

  • Have regular meetings with your team to get status updates
  • Ensure that you maintain an atmosphere where failure is& not fatal
  • Encourage honest, open, and direct reporting of negative status from your team
  • Set frequent deliverable milestones to ensure early warning of potential delays
  • Be easy to contact, offering a variety of communication methods (cell phone, email, instant messaging, face-to-face)

Zones of Control
Let’s talk a little bit about what you should expect to control and what you should not. For lack of a better term, I am calling them zones. The closer the event or situation is to the project manager, the greater the amount of control I would expect them to have. The further out the situation lies from the project manager, the less control. Zone 1 would be closer to the project manager than Zone 3 (see Figure 1).

 

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Figure 1: Zones of control.

Zone 1
Zone 1 is what I’m going to call the aspects that the project manager has direct control over. These are the things like ensuring that the requirements document gets approved before development work begins, or ensuring that the project charter is approved before spending the company's money. If the project goes red due to something directly in your control, you need to own it. That’sall you. You better have a good answer for this one. You should have expected this. In my opinion, the best thing you can do if the project goes red due to something directly within your control is to speak up, be the first one to say it was you, and learn what the better course of action should have been. I always advise transparency.

Zone 2
Zone 2 is what I’m going to call those between Zone 1 and Zone 3 (no kidding?). These are the issues you are responsible for simply because you are the project manager. These are the issues that lay somewhere between “That’s all you, buddy” and “There’s no way you could have seen this coming.” These are things like maybe you planned for X, Y, and Z, but encountered W instead. These are the things you saw coming and were able to warn senior management about ahead of time by voluntarily changing your status to yellow. I see it coming, and yup, there it is. This is a bit further out of your direct control, but still within your field of view. Things you might be able to anticipate and control through mitigation and planning. These are the things you get paid to find and eliminate. Be vigilant. Be aggressive about identifying and eliminating risks to the success of your project. While the rest of your team is working on this week’s activities, you should be thinking about next month.

Zone 3
Zone 3 gets further out from the direct control of the project manager. As the project manager, you are responsible for risk mitigation planning, identifying what could go wrong, and coming up with a way to avoid, transfer, or mitigate it. But, what if your third-party vendor based in Germany plans a ski trip/team-building exercise in which most of your developers become disabled or trapped due to an avalanche? Not your fault, probably not even something you had prior knowledge of, but guess what? Your timeline is blown, your development team is gone, and your project just went red. It is, however, unrealistic to think you could have expected this (see Figure 1).

So, some things are you, and some things are not you. The path to red is broad and varied. The project can get there with or without you. What you do next is what matters most.

Does Green Mean Good?
Be honest: Do you feel that when your project is green it means you’re doing a good job? What, then, does red mean? Does red mean you are not doing a good job? Again, be honest. You should not be afraid of reporting something other than green on your project. Instead, you should understand that this is exactly why you are drawing a paycheck; this is exactly why you have a job. Again, projects go red. If they didn't, the organization wouldn't need you around! Don’t get stuck in the thinking that green means you are doing a good job because it will be hard not to think that red means you’ve done something wrong or that red means you are not good at the job. Instead, consider this:

  • You are like the professional soldier who trains for war. You don’t hope for war, but you are there because war happens. Did you start the war?
  • You are like the medical doctor who reads the test results and tells the patient she needs to stop smoking. Is it your fault that the patient smokes? If the patient chooses not to follow your instructions, does that make you a bad doctor?
  • You are like the college professor grading the term paper. If one student gets an “A” grade on their paper and another student gets a “D” grade, does that mean you are both a good and bad professor at the same time?

No! You are responsible for reporting on the current condition of the project. You are not here to provide an emotional assessment or commentary on the current condition. You are not here to assign an emotional value to the new data you have. No, you are a professional who deals with data. It’s information and, as a project manager, you deal in information. You deal in facts, and those facts can and do change over time. The status of the project can and will change. Change is natural and should be expected. It's why you are on the scene - to be able to address the change.

This should not be taken to mean that you don't care about the status of the project. You are also a compassionate professional whose job it is to get the patient back to health. As a professional, there is no way you would simply report that the project is red and turn your back or walk away without also providing your plan for returning it to green. This is why you are here. You are on the payroll to help ensure project success and as such, you will assess the cause of the current project condition and develop a recovery plan to return the project to green. Report the red condition as soon as you can, but be able to provide at least the beginnings of a recovery plan at the same time.

  • As a professional soldier, you have trained and practiced for exactly this situation
  • As a medical doctor, you deliver the grim diagnosis, but you also give the patient the options for recovery treatments
  • As the professor, you hand the student their “D” grade, but also provide advice on how to get a better grade next time

In fact, I say, if your project goes red, rejoice!

Red Means “Time to Shine!”
Ok, look….. How are you going to get a reputation as a miracle worker if your projects are always green? In fact, do you honestly claim that all of your projects are always green, all of the time? Really? Come on. If all your projects are always green, all of the time, you are either not reporting correctly or you are the luckiest (and laziest) project manager in town.

No, real projects can go red. Yes, I would say that your ability to maintain a green project is a good indicator of your skills as a project manager. But, I would also say that your skills as a project manager are best tested and are most proven when your project goes red due to some Zone 2 or Zone 3 event. Then you can develop and execute a recovery plan that turns that project around and amazes everyone. Do you want a chance to prove that you are in the right job? Do you want to flex your professional muscles and prove your value? This is it. This is why we get the big bucks.

  • Red means time to rock and roll
  • Red means time to dig deep
  • Red means “Stand back, I’ve got this”

Oh yes…one thing…. are there any points earned for recovering a project that went red due to a Zone 1 incident? No, that’s your job. Taking credit for recovering from a Zone 1 incident is like taking credit for standing up after you fall down because you weren’t paying attention and walked into a lamppost. Best not to say anything about it and just hope that not too many people noticed. So, your project is red and you are ready to take on the challenge. What next?

Telling the Story
Now then, as the professor, are you going to let that student fail? As the physician, are you going to keep your treatment plan a secret? No, of course not. While red is not necessarily your fault, you are still a professional who is going to attack that problem aggressively and seek to return that patient to health. Three key steps are:

Confidence: It is very important that you see yourself as reporting data and reporting it professionally. If you see red as a failure of yours, then so will your audience. If you believe you are at fault, then your project sponsors will sense that, and it will be hard for them not to join you in that feeling. Confidence is important. Confidence in yourself leads to confidence from your sponsors. Confidence from your sponsors makes your task much easier. Why would your project sponsors be confident in you if you are not confident in yourself?

  • You can fix this
  • This is what you are here to do
  • This is your time to show them why they need you

Action: Don’t just sit there. Get on top of it. Ask questions to help your understanding. Challenge the assumptions of your team if they are struggling to find the root cause. Be the expert on the situation as it stands today.

  • You don’t have to have all the answers right now
  • You need to be able to report some actions taken
  • Your “action” could be a list of things you need

Reporting: It is also very important to understand your audience’s needs when reporting the incident that has caused this change in status. You will want to report the incident succinctly so that your audience can digest it quickly. I follow a simple formula. If you are reporting to senior management, you need to realize these are busy people who receive information all day long.

  • Describe what happened
  • Explain what it means to the project
  • Explain what you are doing next

To gain the most traction and the greatest amount of understanding regarding your issue, I find it best to use as few words as possible. I prefer bullet points and simple explanations, at least in order to send the initial message (see Figure 2). It’s always good to have more information to share if you are asked to elaborate. In my opinion, loading up your audience with as much information as you can will help ensure that your message gets lost in the noise. It also makes you look hurried, desperate, and rushed. The formula I follow calls out the issue, its impact, and what action you are taking (see Figure 2).

figure-2-issue-impact-action 

Figure 2: Issue, impact, action.

The Issue: This will likely be technical in nature, and will probably be only one or two bullets. Remember that the recipient of this information does not have your full understanding of the details of the project. Don’t be overly technical, but do be accurate. Provide sponsors with the specific words they need to help argue on your behalf. The sponsors will need some level of detail to be able to direct, advise, and negotiate on your behalf.

The Impact: This is a very important section because this helps raise awareness—and urgency—to the audience. This section serves to help the audience understand why this thing is important to them and to the success of their project. It answers the question, “Ok, so what?” This section also helps guide the audience in where to turn next to help you correct the situation.

The Action: This section is where you can shine. This is where you show them that you don’t just bring problems, you also bring solutions. This is where you describe what actions you have already taken so far. Don’t feel like you have to have the whole thing solved during this report. Your “action item” could simply be something like, “I’m coming to you to get better direction.”

Conclusion

  • A project can go red for many reasons
  • Green is a good sign of your professional abilities
  • Turning a project from red back to green is a greater sign of your professional abilities
  • Red is not bad; it’s just current
  • Red is not necessarily your fault, but it is definitely your time to shine
  • Report the change in status (to red) professionally, as updated information—in clear and simple terms your audience will understand
  • Be sure your reporting includes what actions you are taking to return the status back to green

About the Author
Robert Barger, MBA, PMP, is the author of Sam the Cat: A Guide for Memorizing the 42 Subprocesses Using Mnemonics and Memory Stepping Stones, a manuscript utilized by the PMI Central Ohio Chapter to assist students in preparing for the Project Management Professional (PMP)® certification examination, as well as Being Second, Lessons for the Project Manager. Mr. Barger has been in the project management field since 2001 and has worked in a wide variety of industries and settings. Mr. Barger is currently working as a principal consultant for a Central Ohio technology solutions consulting firm.

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