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Three Reasons to Dim Project Stoplights

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Hardly a project status report goes published without at least one stoplight indicator. As the name suggests, stoplight indicators show the status of key project progress measurements: green (good to go), yellow (use caution) and red (stop or danger ahead).    

In recent projects, I have noticed recurring instances of "stoplight overkill." Project status reports now include all manner of stoplights, such as how the last status meeting turned out or the happiness level of every single customer group. In fact, I have even seen a stoplight indicator that, through a complex calculation, was intended to show the aggregate status of 40 stoplights. The colors on that report made my head spin.

Beyond avoiding a headache, here are three major reasons why project managers should limit stoplights:
  1. Stoplights are not progressive. Project stoplights typically have only three indications of status. They can't show a range of progressive tolerance, trends or rates of change. For example, a yellow stoplight can be overly optimistic if the value for that stoplight is just shy of the range for red.
  2. Stoplight bands mean different things to different measurements. Stoplights break down into bands of tolerance ranges. For example, zero to 5 percent variance would be green, 5 to 10 percent variance would be yellow and above 10 percent would be red. The problem is, project measurement indicators might not follow a common range. For example, how realistic is it to measure customer satisfaction with the same band as test case validation? While test case validation might make sense at 7 percent, it would be discouraging if just 7 percent of your customers were happy with your project.
  3. Stoplights can be "gamed." A major vulnerability of project stoplights is that they can be manipulated by project managers and sponsors when either wants to defer an unfavorable status. Despite the actual value of the project measurement, the project manager or sponsor will leave the stoplight to a green (favorable) value. This "gaming" of project stoplights usually precedes the inevitable -- rapid acceleration of stoplights to a red (danger) value when hidden details are discovered. 
I favor more progressive and consistent modes of status presentation that indicate position, direction and pace. 

For example, use a remaining budget marker to show the position of budget against a broader range of tolerances. For deliverables, you can show a scatter plot of projected and actual completion dates to reveal pace and true progress. Highlighting customer satisfaction on a timeline is a good way of showing the impact of a project on a sponsor's business.  

What do you consider the limitations and dangers of project stoplights? What alternate methods have you used on project status presentations? Share your thoughts below along with your Twitter handle, and Voices on Project Management will publish the best response as a blog post.

 

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4 Comments

Hi Rebecca...thanks for the commentary..some great additional insights you offer.

I would agree very much with your last comment about the need for structured escalation; having that in place would encourage more transparency and less resistance to share the exact disposition of the project...

Over the years I have had experiences with clients where escalation was deemed to be an unfavorable event...the opposite tends to be true I think...

Like any project management communication tool, a stoplight is only useful if it is defined and well-understood by the sender (project management team) and the receiver of the status (team members, sponsors, stakeholders).

Touching on the "stoplight gaming" problem, I think it's more complex than a project manager or sponsor not wanting to share an unfavorable measurement.

I've been on projects where a stoplight has been gamed because the consumers of the stoplight would have demanded an immediate crisis response to a red stoplight. In the course of the "stop everything and respond" nature of the demand, I've witnessed further delays to important team tasks. Spending the time and resources to respond to the red stoplight sometimes made things on the project even worse than the single unfavorable measurement, and frequently added work to managers and team leaders that did not assist in the resolution.

In short, publishing a yellow or red stoplight is important information. To reduce the temptation to report more favorably, it would help if the project communications plan contains the agreed process for "dealing" with an unfavorable measurement. As in, what can be requested and in what timeframe, to avoid fire drills and work that does not help to solve the problem.

(On twitter @Becky_SAP)

@arjunaraoc: Insightful. I have introduced stoplights for SPI, CPI on the project schedule while managing a complex product development project and found them to be useful to attract attention. In this case, it was possible to manage these despite being in large number as the hierarchy inherent in the schedule allows one to view at the required level of detail.

Many dashboards are gamed and organization political reality remains the challenge of the project manager - similar to the the fuzzy areas of financial statements that certified public accountants are asked to assemble on the health of a company.

I agree with your thoughts and feel multiple levels of project health provide a better pictures, just like cash flow, income statement, and balance sheet combine for a picture so to can Earned Value Management, financials, and some dashboard combine for a better picture of health.

Putting the range and the assumptions with a red, yellow, green helps and reminds people in status briefings what the quality range means.

Scatter plot is a new thought. Thank you.

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