Words Don’t Always Tell the Story

I have found over the course of my career that I would listen to a presentation, and sometimes, a few days later, be surprised by something that happened.  What I had heard in the presentation did not exactly reflect “real life.” So, in subject areas like investments, building projects, or, frankly, just about anything, I asked people who work with me to color-code materials red, yellow, or green before submitting them to me.  

Using investment summaries as an example:  we have several great financial advisors, and we have various investments.  So, I asked the financial advisors to code them as follows.

• RED:  those investments that were substandard
• YELLOW (as a “watch and see”):  those investments that were not meeting their goals but were not terribly off  
• GREEN:  those investments that were meeting or exceeding expectations

The color-coding allowed us to easily see where our attention really needed to be focused and, over time, seeing “red or yellow” continue for too long prompted action.  I find the color coding is very clear, while I could be misguided by words.

This same process has served me well with audit committees where we have reports on issues around the world or within a business.  If the report is coded red, the folks have a very short time to clean up the mess; yellow means some changes are needed, and we will watch it; and green, of course, means the topic is in good shape.  If the issue had stayed on the “to be addressed” list too long, it was flagged as a red.

When building a factory or a house, there are always timetables and expectations of what is to be done by when.  The same color coding by the builder calls attention to where we are seriously behind and what may need extra attention, such as bringing in a consultant.  The red, yellow, and green system works for just about anything including new system installations, a new product launch, and reports from our legal department.  It forces people to commit to a position, taking ambiguity out of the picture.

View this sample investment summary here.