Why are we so afraid of coloring red regarding metrics and KPIs? Red is only an interpretation.
I can see following reasons:
- Already starting from a very young age we are confronted with performing. Bad grades are marked with red and are discussed with your parents. Performance is being build in.
- The nature (or strength) of some among us is rather achievement oriented or even competitive. We want to be the first, be the best.
- Another pitfall could be perfectionism. Errors, deviations, unexpected results, … are not wanted.
- Coloring red can be confronting: it shows there are problems.
Red colored Key Performance Indicators (KPIs) do indicate problems, but they also are indicators for opportunities for improvement.
So red is not only an interpretation, but also an opportunity.
When a KPI colors red, you can check it out. Why is it coloring red? Is there a problem or is the data not measured correct? Who is responsible for the KPI? (see “A RACI is (no longer) carved in stone“)
The are various problem solving techniques available to take a look at the problem: Root Cause Analysis, Brainstorming, Reduction, 8D, Value Stream Mapping, GROW, … With these techniques you can identify the root cause, find a creative solution and implement the solution.
So red is not only an interpretation and an opportunity, but also a road to change!
To follow the PDCA (Plan-Do-Check-Act) cycle (or the “Deming wheel”), the next reporting period you can check the result of your actions. Is the KPI still coloring red? Let’s investigate again. If it is colored green, then you can check where the next focus can be set.
So red is not only an interpretation, an opportunity, a road to change, but can also (re)set focus!
To summarize, metrics coloring red are not bad, they provide us opportunities for change and improvements, opportunities to set focus and rethink the process. Red is not bad, red is good.
Red is the new green!
So what about those green metrics?
If red is not bad, what’s the meaning of coloring green?
Coloring green can indicate that:
- Problems are solved.
- Targets are made.
- Targets are made… too easy.
- You are using the wrong metrics.
- Management (or the KPI owner) does not see problems.
If you whole KPI dashboard is coloring green, why are you having a KPI dashboard? Why are you spending time to set it up and discuss it? Is it to be complacent? To follow a process?
When all KPIs are coloring green, an alarm bell should go off. The team is not going the extra mile, the targets are made too easy, the management is in a luxury position and doesn’t see problems, and so on.
So green’s not that good after all.
Green is the new red!