Explaining Red Lights Is Good, But That Doesn't Make Them Not Red

This article on Forbes.com caught my eye this week. It's titled Why Companies That Embrace "Red Is Good" Get The Best Results, and it makes that very argument -- that companies that rigidly adhere to an honest and unflinching measure of their success, even if it means putting those dreaded red lights on their color-coded dashboards, do better than those that purposely or otherwise fudge their yardsticks to make sure their dashboards are always covered with those pleasing green lights.

I found it reminiscent of a blog post I wrote almost six years ago. In, When Red Lights Mean Go, I describe how I typically sort the green, yellow and red lights that appear on our program performance dashboard into an "innovation matrix," where the level of risk associated with each program can more easily be taken into visual account. In that post, I made the following observation about this technique, and about red lights in general:

The red lights always scare people. By themselves, they represent failures. They indicate that we failed to meet the identified metric of success of some of our programs--and some people don't like to admit that. But in the context of our innovation matrix, the red lights also become part of our success. After all, innovation doesn't happen without them.

All of this is a timely reminder for me, as my association is beginning to assemble our final assessment of progress that will be reviewed and discussed by our Board at their strategic retreat at the end of our current fiscal year. As the data comes, we're seeing what we typically see, mostly green, a few yellow, and a handful of red lights, reflecting a year of solid success with a few areas where we fell short of the stretch goals we had set for ourselves.

For me, this is always first and foremost an opportunity for exploration. Why? Why did we not reach this goal? Typically, the answer falls into one of three buckets: lack of resources, lack of opportunity, or lack of effort; and usually in that order. Like many associations, ours is one in which our goals often outstrip the time and financial resources that we have at our disposal.

But that reality doesn't protect us from the often subliminal forces described in the Forbes.com article. People have responsibility for achieving the goals we assign to them (or that they accept themselves), and people don't like having red lights associated with their names. There is an attendant loss of prestige and, depending on the goal's connection to our bonus and compensation plan, also the possible loss of financial reward. Often, when explaining the factors that went into missing the goal, the plea will be made to change red to yellow, or sometimes even to green.

The factors are always taken into account when setting goals for the future, but the process of explaining why a light is red should never lead to changing the color of the light or the substance of the goal in question. Doing so risks creating a false level of success for the organization and, most damaging, a false understanding of the organization's execution capability. Because at the end of the day, that's what all these green, yellow, and red lights are actually measuring -- the ability of the organization to first say what it is going to achieve, and then achieve it.

And if you don't have an accurate view of that capability, how can you ever set realistic goals in the future?

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This post first appeared on Eric Lanke's blog, an association executive and author. You can follow him on Twitter @ericlanke or contact him at eric.lanke@gmail.com.

Image Source
https://www.abc.net.au/news/2017-12-20/traffic-light/9277328