How to Use RAG Status Ratings to Track Project Performance

Project progress reports often use the traffic light rating system or RAG status definition as a visual cue to project performance.

However, the efficacy of this project tracking tool is wholly dependent on the integrity of the project manager and the accuracy of the assigned RAG status.

An inappropriate RAG rating can lead to issue avoidance and ultimately project failure. Its purpose is to show progress and make it clear when board intervention is needed.

Therefore, it makes much sense to understand the meaning behind the traffic light system and the rating for red, amber and green.

Here’s why …

Understanding RAG Status Ratings

Project tracking, monitoring and control — also see How to Report Project Progress — is about measuring progress, taking corrective action, and keeping stakeholders informed.

Therefore, the traffic light system should not be used to hide problems. Rather, the RAG rating is a way of tracking project progress and seeking support and guidance from sponsor and senior stakeholders.

Always use a common RAG status definition to communicate project performance to your stakeholders.

The RAG Status Definition

Traffic Light RAG Status Definition Action
Red There are significant issues with the project.

The project requires corrective action to meet business objectives. The issue cannot be handled solely by the project manager or project team.

One or more aspects of project viability — time, cost, scope — exceed tolerances set by the project board.

The matter should be escalated to the project sponsor and project board immediately.
Amber A problem has a negative effect on project performance but can be dealt with by the project manager or project delivery team.

Action is taken to resolve the problem or a decision made to watch the situation.

One or more aspect of project viability — time, cost, scope — is at risk. However, the deviation from plan is within tolerances assigned to the project manager.

The project board should be notified using a progress report or scheduled briefing with the sponsor.
Green The project is performing to plan.

All aspects of project viability are within tolerance. However, the project may be late or forecast to overspend.

No action needed.

How to Use a RAG Status Report

Use the RAG status definition wisely and report only on a few areas of project performance. For example, overall project progress, project schedule performance, project budget, and scope.

Why?

Because the inclusion of too much detail in a RAG status report results in the project manager and project sponsor failing to see and deal with important issues. Quite simply, you can’t see the wood for the trees.

What’s more, always report on the progress trend. Compare the current project status with an earlier period. For instance, show the RAG status for this week and last week.

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Do you use the RAG status definition?

That’s great. How often do you prepare project progress reports? Please join the discussion.

Creative Commons image courtesy Julie Gibson.

Comments

    • says

      Thanks for posting an alternative approach to RAG status definition. The most important features of this approach are the definition and action needed.

      Any yellow or red condition remaining for “X” consecutive weeks, regardless of the improvement trend, may justify management intervention

      We need to be precise about the action taken when reporting a red status. Usually this requires board intervention.

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