What is the project status? Red Amber Green what does that mean?
Red, Amber, and Green can tell us a lot!
Why are these 3 words so hard to say?
“I don’t know.”
My wife asked me about RAG Status. “What is RAG status used for?”
“Ah..” was about all I had.
It’s okay to say those three words.
RAG Status
RAG Status or Red Amber Green is used to communicate project status quickly. It is used to evaluate Key Performance Indicators or KPIs.
The three colors are similar to a traffic light. This is to create a simple reminder of where a project is currently.
Red
Red status means the project is likely to fail. To paraphrase Arthur Miller, “Attention should be paid to this project!”
Things are not proceeding. Intervention is needed. Additional resources may be required.
The red status is a bullseye. Managers and stakeholders will ask questions. They should be seriously concerned.
Amber
While not as bad as red, amber means we are slightly off course. Stakeholders should keep their eye on this.
For instance, there might be roadblocks in the way. Maybe a key resource just went out on maternity leave.
Corrective action taken here can bring things back on track. If left alone this project could quickly move to red.
Green
The green status means all systems are sound. We are moving along as expected.
We wish all projects were green. Although, we know that is not how things always work.
This is the ideal state. Understand that it can be difficult to keep a project always in green. If it is always green you may become suspicious.
Define Terms
When you use terms like this make sure you agree on what they mean.
It is very important for an organisation to be able to understand the trust what status is being reported for a project. Therefore, it is very important to have clearly defined criteria for selecting the correct RAG status. (from PM Majik).
When an organization agrees on the terms then this can be a valuable reporting tool. If not this can become useless.
Disadvantages
It can be nice to have a tool like this for a quick glance. Of course, if people don’t honor the agreement they could alter the report. This is a big disadvantage.
Another is that simple indicators may only tell part of the story. For instance, in the complex world of project management, many factors could be at play.
This article points out how we can tend to be too optimistic. “project managers have then is a tendency to play safe and report project is green when in fact it should really be amber or red.”
The optimism bias can lead us to believe things will work out. When in fact things could be heading south. If we took time and got the help we may be able to save the project.
Advantages
This can be a helpful tool to quickly communicate status. For instance, executives need to quickly see progress. RAG Status can help them briefly review.
In an organization with high trust, this will work. If you find a lack of psychological safety then there will be gamesmanship. Especially if bonuses may be tied to outcomes.
In summary, the RAG status can be helpful. Although it may not always convey the true status. As we discussed this is one data point. Consider using this in conjunction with other information.