Not seeing red? Maybe you should be
The traffic light metaphor is a powerful tool to summarize the status of projects in the IT portfolio.  An at-a-glance picture makes it easy to identify which projects require a further look.  That is, if the colours assigned accurately represent the project status.  Do yours?

Project status reporting using the traffic light system of red-amber-green (RAG) is intuitive and regardless of the formal definitions, is usually expected to mean:

Green means (almost) everything is tracking to plan; the project is expected to deliver as specified, on time, and within budget.
Amber status indicates that there are some variances, but actions have been identified or are in place to bring those back on track. Again, the project is expected to deliver as specified, on time and within budget.
Red status is a warning that the project has encountered one or more issues and there is not yet a clear, agreed plan to resolve them. This project is at risk to finish unsuccessfully unless action is taken. Red is signal that help is needed. It’s an escalation.
These broad categories are a good start. RAG is simple and effective as long as there are firm definitionsof each colour. It’s how these are interpreted by the project management office or project manager that can create a disconnect. Given that most projects go through periods where there are major issues, why are we seeing few, if any, reds on our summary reports? And why aren’t most projects showing some amber at the detail level, as something wanders off-track?
What creates this missing spectrum?  It’s human nature to not want to deliver what’s perceived as “bad news.”  A project manager may see red status as a sign of not being in full control and not being perfect (as if anyone could manage a perfect project given the complex interactions of business operations and IT services). These are irrational expectations, but we cling to them. And there is the management style of the organization. Nothing shifts the spectrum to all green like the perception that the messenger bearing bad news may be punished.
It is normal and expected that projects will encounter problems. That’s the purpose of using project management disciplines; project issues are handled as part of the normal course of business. Much of project planning deals with anticipating and allowing for corrective actions – checkpoints, milestones, contingencies. The message that has to be clear to everyone involved is that when the project manager flags a project status as red, it’s not a sign of failure. She is reporting that the project needs help – resources, additional management of the vendors and/or the business client, whatever — to get the project back on track toward successful conclusion. That’s her job. And you, the IT leader, have to understand that this means the process is working and it’s time for you to support your project manager by understanding the issues and what your project manager needs from you to resolve them.
Too often this message that red doesn’t equal failure gets lost. Flagging a project or major component of one as being in the red is the appropriate way for your project manager to raise awareness of and escalate an issue that he needs to resolve.  Contrast that to an amber status, where your project manager is raising awareness for information on an issue, and how he is dealing with it. Amber requires understanding, but not action; your project manager has it under control. Resisting the temptation to jump in and “help” is essential if you want him to feel that he has your confidence and if you want to continue to get accurate reports. Nothing changes red to amber and amber to green like an overly helpful or critical boss. And of course, all those projects showing as green need to be questioned to be sure that it’s not a “on balance it’s green because those amber and red areas are going to be OK, I just don’t know how yet” situation. Is it really OK, or a nasty surprise waiting to happen when it’s too late to turn around?
One summary status is useful to report to the client or at the executive table, but within IT more granular level of reporting  each project’s status is needed. What approach to use depends on the type of projects and your organization’s style. One common approach is reporting using the textbook project management triple constraint: cost, time, and quality. Another is by major work breakdown elements where the metrics could be earned value, percentage complete, etc. By going one level deeper, issues can be identified both within a specific project and perhaps more critically, across projects. For example, competition for a critical resource could impact several projects but not be obvious to the project managers involved. Projects with amber or red at the detail level are ones that you need to know about and be ready to help your project managers when they need it.
I’ve observed a large bureaucratic organization’s IT department, where project managers are so concerned about reporting red as it equates to bad news, that orange – “amber trending red” – project status have been used. If you’re the project manager, resist the temptation. You aren’t fooling anyone and are not using the process to signal that you need help to get the resources to get the job done. And if you’re the boss, make it clear that red is part of the tool set to be used when appropriate. After all, why have a process if you’re not going to use it and use it effectively? Eliminating all-green and orange thinking by project managers will provide a more accurate understanding and better management of a critical and often problematic IT delivery area.
A final note: Be prepared for an unintended consequence when improving your project management reporting processes. Lay the groundwork of the shift in approach for more realistic status reporting with your boss in advance. She needs to understand why your reports on the IT project portfolio status will be shifting from mostly green with a few ambers to a more colourful mix and why  this is evidence of developing a more effective set of controls and processes to better deliver and deliver better IT services.   



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