Reports providing the RAG-status of a project are relatively common. When done correctly this simple way of reporting provides clear insight to anyone who needs it. But it is important to adhere to some simple guidelines when labelling anything Red, Amber or Green. Without agreement on the basics, providing a status report based on RAG is just a shabby way of reporting.
It starts with a baseline
First of all it is important to agree that reporting is always done against an agreed baseline. Without a baseline on the usual suspects like quality, budget and planning, reporting becomes a kind of storytelling. This type of activity could be entertaining or even informative but it has nothing to do with reporting. Especially a status Green needs a baseline as it indicates that the rated parameter is “within the pre-agreed bandwidth” which means the project is going according to planning, is within budget and is delivering the agreed quality.
Amber introduces potential ambiguity as it sometimes seems to indicate “things are not OK but everything is going to be all right” (you hear Bob Marley singing softly in the background?). Especially with optimistic project leads in challenging projects Amber is a colour occurring frequently. What it should say however about a pre-agreed parameter is: “it is outside the agreed bandwidth, but can be restored without the need for external intervention”. With that we also have a definition for Red which states a parameter is “outside the pre-agreed bandwidth and needs external intervention”. A status Red therefore needs an associated action or decision which is required from the project owner (Prince2: the Executive). Anyone reporting Red should also formulate the external intervention needed to get back within the agreed bandwidth. Stretching the bandwidth to the actual value of the parameter (i.e. ask for additional budget or resources or leadtime) is only one of the options and often not the most popular one with project owners.
With a clear pre-agreed baseline and the right parameters to be reported upon, a RAG-status can give clear insight at any level in the reporting chain. The definitions for any status are unambiguous but obviously the result can differ based on the mandate of the ‘reporter’. For example: a project-lead may need to report Red on budget while the Program Manager he reports to can re-allocate budget between projects and with that will report Amber or even Green to the next level.
With these simple definitions, RAGged reporting becomes a simple and powerful tool.