I like the colour green. It looks like my garden or the forest, the sign on the road that it is safe to drive. It tempers emotions. In business shows that the process or progress is under control. A quick sign in the corner of an A3 or status report; it gives the reader an immediate signal that all is okay and it’s fine to spend time on more important topics.

Maybe I am not the only one. The top of the pile detailed End of Month reporting is often a sheet that shows the whole list of KPI’s, each with their own colour, and luckily, many are green. However, some may be red, which means something needs to be done, in order to get the beloved green again. But not always, some people don’t care!  Lists look like (and I have borrowed the name) a Mondrian painting with two (or three) colours, which hardly change over months. Those companies don’t like green, which is fine of course, there is freedom of choice. One should just question why bothering to make the overview if you don’t like green.

Not all KPI’s are truly green, some of them are actually fake. Once a KPI has turned red, people change rules, so the next reporting cycle it shows green again. They cheat! You should not change the rules! That’s too easy, the KPIs don’t deserve the deeply desired colour! But it is tempting, and almost always much easier than really solving the problem. Well known examples are accepting late delivery, as long as the customer is fine, or defining “special occasions” in which the original target is no longer needed. Or simply widen the specification limits, since the old one was too narrow “anyhow”. Do this and wow, surprise, the conditional formatting turns into the favourite colour again.

Result: the reporting system gets more complex, but green. What doesn’t change is the financial reporting. It tells the truth, all KPI’s are green, the result is not. Management asks for answers, nobody knows what to do, since it is all green.

Stop cheating, love green, but only when it is deserved. Stay in control, love red as well, since it shows the road to improvement. Red KPIs give you the chance to make a real impact on the financial performance. Change the process performance and earn green. Feel good being in the garden or the forest. And -under the condition that KPI’s are chosen correctly- approach month’s-end financial results with optimism.

Do you love red?

Peter de Bie

Managing Principal

peter.debie@argonandco.com

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