The theory behind the RAG approach is simple: by color coding an action or step in a process either red, amber or green, you can visually identify its status and trigger an appropriate and prompt response.
This may sound straightforward enough, but there is a problem with this approach.
The issue is that once a process step moves to green, it’s natural for the mind to rest and attention to move to steps marked amber or red.
But is relaxing on green the right approach? Especially if you hit green at a low threshold like 90%. This still means 10% of transactions are classified as red.
Recently I was talking to a procure to pay person at Marks and Spencer, and their approach to reporting on metrics and KPIs is quite novel. Rather than highlighting the 97% compliant transactions, they report on the 3% non-compliant invoices. This helps focus the mind on the further incremental improvements that can be made within the 3%.
“When you give something a ‘green’ status, people tend to think the problem is solved”, my contact explained.
“But by highlighting that we still have some way to go, and that we’re not yet at 100% problem solved, we can drive behaviour to driving down the 3%.”
This approach seems to support a super-focus on fastidious continuous improvement.
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