One of the most common indicators used in measurement and status report are traffic light indicators. Traffic light indicators have been adopted because they are easy to recognize, represent complex information in a palatable manner and indicators are easy to explain. The traffic light is elegant in its simplicity; however, that simplicity can also be its undoing. There three critical issues that traffic lights often exhibit which reduce their usefulness.
- Traffic light indicators obscure nuances and trends. Traffic light indicators generally use the simple green, yellow and red scale (good to bad). The indicator can only be set to one of those states, and there is no in-between (no orange or greenish yellow). HOWEVER, project status is rarely that cut and dried. For example, how would the indicator be set if a project exhibits serious threatening risks but the stakeholders currently satisfied with progress? Regardless of whether the indicator was set to red or yellow, much of the nuance of the situation would be lost. In addition, the traffic light indicator could not show whether the risks were being mitigated or threatening to become issues.
- Traffic light Indicators can generate poor personal and team behaviors. One of the most common problems observed with the usage of traffic light indicators is sticky statuses. A status is green or yellow, then seems to suddenly turn yellow or red overnight. The change from one color to another typically surprises management and stakeholders. The change of color/status is often resisted because a change is viewed as a failure since there is no mechanism to provide a warning making the change is resisted. A second common problem is that making the indicator change becomes the project leader or team’s most important goal. When the metric becomes the goal, individuals and teams can be incented into trying to game of the metric which removes the focus from the customer.
- Traffic light indicators can lead to users of the indicator losing track of how it was calculated. Any high-level indicator, like a traffic light indicator, is a synthesis of many individual measures and metrics. Meg Gillikin, Deloitte Consulting, suggests “that you should have definitions of what each state means with specifics.” The users of the indicator need to understand how it is set and the factors that go into setting the metric. Lack of understand of any indicator can lead managers into making poor decisions…
Dácil Castelo, Leda MC, sums up the use of traffic light indicators, “The use of red, green and yellow provides a quick, visual summary of the status in a simple and easy way (everyone knows what a traffic light is). On the other hand, easy to understood doesn’t mean easy to calculate nor necessarily useful for the user.” Remember that with any indicator there is a basic issue IF an indicator doesn’t actually help teams and leaders to delivery of value it will be view as overhead