Better than RAG: 4 Thresholds

By Laura McAllister

Virtually every operation we deal with uses RAG indicators; Red, Amber and Green. Everyone’s familiar with them and knows what they mean.

Except they don’t. In our experience there are some real challenges such as:

  • Inconsistency is rife, with RAG rules & definitions changing from project to project, report to report and KPI to KPI
  • ‘Amber drift’ is prevalent, where KPIs and projects drift to an amber status but somehow don’t need any help – it’s not as bad as red, but it’s definitely not green.
  • Amber is often defined as ‘At Risk’ without any detail as to what that means.
  • RAG makes people less likely to seek help
  • It’s easy to game the system when you’re just shooting for a colour
  • Red is a colour with all sorts of emotional overtones – let’s save it for when it’s really needed

Really the status of something is pretty straightforward; either help is needed, nothing is needed, or it’s an example of good practice.

If nothing is needed, the status should be just that: No Action Needed.

(Not amber.)

Pivoting around that should be statuses for “need help” and “good practice”.

This gives us something like this:

  • Crisis: escalation, requires urgent attention/priority
  • Intervention Required: action required to mitigate
  • No Action Required: keep calm and carry on
  • Good: action required to revise expectations, identify best practice
  • Excellent: exceeds expectations, best in class

These 4 thresholds give much more clarity than RAG; it’s really clear that action is required and what that action should be.

We’re recommending that the colour scale goes as follows:

  • Crisis: red
  • Intervention Required: light red
  • No Action Required: white (no colour)
  • Good: light green
  • Excellent: green

You can change your KPIs right now to use the four threshold instead of the RAG. Simply change the option on the KPI Scoring Screen and set the values to determine your thresholds.

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We’re always interested in hearing from you with any comments or suggestions, feel free to get in touch.

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