It often seems that there is an automatic acceptance that ‘green is good’ and therefore I was initially a little shocked to be sent a piece from my colleague Stephen Timbers entitled ‘Green isn’t always good’. But suspend any reactions until you read this post because it is a factual approach to finding the right balance, and as an engineer I thoroughly applaud his approach and argument. See what you make of his views! As each week passes there are more and more things that highlight the need to be green. We are encouraged to recycle, drive less, preserve heat, buy locally, and switch things off when we aren’t using them – all perfectly reasonable! But there are organisations that extend the green message just a little too far… Scorecard management Imagine running a large business and using scorecards to show all the things that are measured. In this context as well - green is good! Put simply, a good scorecard is coloured green to show progress on key deliverables or a positive status quo, and a bad scorecard is red to show a lack of movement. But is green actually good? When creating a scorecard there are numerous things that can be measured and for each of those there is a range of possibilities against which success can be defined. When managing sales for example, there are measures such as gross and net sales, with or without tax, with or without refunds, with or without loyalty costs, by area, by date, by department, and no doubt many more. On top of that there are multiple targets, not least limiting reduction in a recession, maintaining the status quo, achieving reasonable growth, ambitious growth, challenging growth, etc. In combining these options and determining thresholds, managers make choices about how green the scorecard will look. When proposing measures they recognise that people like green scorecards. Each year there is a ritual played out between managers and those that they manage: How do we agree on a measure that will be stretching but also be seen to be achievable? vs How do we agree on a measure that is seen to be stretching yet is actually simple enough that we can be confident of hitting our targets? The managers are in turn conscious of their own targets and will be looking to get the maximum amount of help from those they manage. If everything is working well then everyone is helping everyone else to succeed – and to succeed we must all have green scorecards. Green is good When you visit an organisation that makes extensive use of scorecards it is easy to accept that green is good but there is nothing about a green measure that proves success – they are, after all, much more complex than that. If the target is set low then getting green may not be much of an achievement. If it was red but is now green how much success does that show? Are all red-to-green conversions equal? Of course not, but that isn’t visible on a scorecard. It is possible (and important!) to put some quite challenging questions to such organisations. For example, if all measures are green what do managers actually do!? Does this mean there are no issues anywhere? How long have these measures shown as green? Why do you only monitor things that are ok? It seems reasonable that in a well-managed organisation there will be few things that need to be addressed. Of course some would argue that the words “well-managed” could just as easily have read “risk-averse” or “unambitious” since an absence of problems is often easiest to achieve when change is minimised. But it may also be the case that an organisation that has no challenges on its scorecards simply doesn’t acknowledge problems and avoids confronting them by acting as if they aren’t there. Red is good So, if green isn’t always good what should the alternative be? The proposition here is that progress relies on the solving of problems. In scorecard terms this requires both recognition of the problem (i.e. the creation of a measure that shows it as red) and the subsequent elimination of that problem (i.e. showing through measurement that the problem has ceased to be a problem and is now showing as green. Crucially, once it has been shown to be green then it ceases to be a problem, perhaps after allowing a period of time to show it was not a one-off measurement. This suggests that the problem, once solved, should cease to be on the scorecard. In which case its obvious replacement would be another problem returning the scorecard to red again. My point is this. In a progressive organisation managers should not be given the target of making their scorecard green. They should be given a target of identifying problems and resolving them in addition to creating measures that are red and controlling improvements in the business, its processes and its employees to make them go green. In this environment red is good as it says: “We know what our problems are, we make them visible to our managers, and we monitor them until they cease to be problems”. In such an environment people solve problems rather than recycle statistics. Green should be part of the lifecycle, not an end in itself.