Three Reasons to Dim Project Stoplights

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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