The Traffic Light Metaphor for Project Status is a Disaster

Everyone who has worked in corporate America has seen or used it. The traffic light metaphor for status. Red, there’s significant problems with a project. Yellow, there are some issues, but we’re going to make it. Green, all is good.

Recently I was meeting with a potential client and she was describing their use of this metaphor in their monthly senior executive meetings. Unsurprisingly, projects were always yellow or green. None were ever in the red. If you’re a manager and you say your project is in the red, what happens?

  • All attention is drawn to your project;
  • People question your competency as a manager;
  • People begin wondering if your budget could be better allocated elsewhere.

No thanks! 

Whether anyone admits it, the management game, especially when it comes to promotion, is about self-preservation. Even if I know my project is a level 9 dumpster fire, I’m never going to put my status as red. Instead, I’ll mark it as yellow and hope I can quietly make enough moves to actually get to yellow!

For the senior decision makers who are on the receiving end of this dance, the information they’re getting is based on hopes and prayers. Truly red projects rarely turn yellow or green unless there is intervention beyond what a manager can engineer on their own. Yet all is quiet until it’s too late and 7 and 8 figure resource allocation decisions are made based on this kind of information.

What is always unfortunate is red projects are never a surprise - to the people working on the project! Everyone working on a red project knows the project is on a path to failure. They discuss it at lunch and at the bar after work, but in an official setting? Silence. And it's no surprise why. If you're feeling relatively safe in your job overall, who wants to put their neck out and stand in front of that train?

Back in my Inkling days, we worked with a Cisco product VP who hired us solely to bring a sense of reality to his projects. Quality control issues plagued his product lines and he had a hunch that while he didn’t hear a word about it from his team, they knew the product had issues. The impact this had was significant. A product design went to production with issues, and was only addressed after production had already begun. An expensive mistake.

To remedy this, he set up a prediction market inside his product group and began asking questions about number of critical issues at certain milestones, quality control issues that would be found during testing, etc. Critically, everyone participated anonymously so as not to have to be that person to “whistleblow” on their own project or their colleagues. Instead of vague color-coded status, the manager was now measuring what everyone thought was going to happen and quantifying the situation. It was an “early warning system” for issues he could proactively address before they became fire drills.

Whether it’s a prediction market like the one I describe above, or another system, the time for a replacement for red, yellow, green status systems and their ilk are long overdue. These simple, seemingly innocuous status communication systems are responsible for billions of dollars in schedule overruns, missed milestones, failed products, and thousands of layoffs, all because of an inability or unwillingness to face reality.


You might also be interested in: New to Prediction Markets? Four Tips to Get Started


Adam Siegel, CEO Cultivate Labs

By: Adam Siegel

Adam is the CEO and Co-Founder of Cultivate Labs.

prediction markets leadership project management

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