Red status and watermelon projects
For the past 10 years, I have been involved in project management, developing project management practices, helping to manage, and managing projects and project programs myself. I have encountered the "red" status multiple times and know exactly what it entails.
Today, we will discuss what a "red" project is, what leads to this status, how to stabilize the situation, and "green" the project. Let me start by saying that a "red" status is no reason to panic. I don’t know a single experienced project manager who hasn’t faced it. This article is about projects in the environment of large IT and Fintech companies with well-established software development standards and IT project management and monitoring systems, as well as for small teams with a project management expert on board. Below is my personal experience and thoughts, which are not "individual project recommendations."
What is a "red" project?
A project usually turns "red" when its parameters no longer meet the initially approved criteria.
For example:
- Schedule violations. Milestones are missed or not completed on time.
- Budget overruns. The project budget or its utilization timeline is exceeded.
- Significant deviations. There are substantial deviations in the qualitative or quantitative interim results of the project.
- Other reasons. Depending on the organization's approved methodology for project statuses.
- Budget overruns. The project budget or its utilization timeline is exceeded.
- Significant deviations. There are substantial deviations in the qualitative or quantitative interim results of the project.
- Other reasons. Depending on the organization's approved methodology for project statuses.
The status preceding "red" is "yellow." It indicates minor deviations in the previously approved project parameters and the risk of transitioning to the "red" zone. It’s better to address issues at this stage and avoid turning the project "red."
What is a "watermelon" project?
What is a "watermelon" project?
This is when an IT project is formally in the "green" zone but has critical implementation issues. Green on the outside, red on the inside. In my estimation, "watermelons" can account for up to 20% of all projects in the "green" status. Such projects need to be treated with the same urgency as "red" projects, as their transition to the "red" zone is only a matter of time. Uncovering a "watermelon" is quite challenging; sometimes, the team and project manager themselves are unaware of the actual situation, and an external perspective is required.
Here are some triggers for identifying a "watermelon":
- Key results shifted to the project end date. The calendar plan for the final month of the project is overloaded with milestones, with no significant interim (weekly, quarterly) results to track progress.
- Unevenly distributed KPIs. Exponential growth of KPIs at the end of the project or immediately after its completion. For example, DAU in the first quarter after product launch is 100 users, and in the second quarter, it’s 90,000 users.
- Uneven resource distribution. Rapid team scaling up or down. For example, 10 developers work on the project in the first quarter, but 50 are needed in the second. The market may not support such rapid hiring.
- Previously "red". The project has previously been in the "yellow" or "red" zone.
Related projects in the "red" zone: If other "red" projects are necessary for the completion of your project or if they turned "red" due to shared tools, resources, or materials.
- Past team failures. Previously completed projects by the team have been in the "red" zone or failed to meet expectations after completion.
- Unevenly distributed KPIs. Exponential growth of KPIs at the end of the project or immediately after its completion. For example, DAU in the first quarter after product launch is 100 users, and in the second quarter, it’s 90,000 users.
- Uneven resource distribution. Rapid team scaling up or down. For example, 10 developers work on the project in the first quarter, but 50 are needed in the second. The market may not support such rapid hiring.
- Previously "red". The project has previously been in the "yellow" or "red" zone.
Related projects in the "red" zone: If other "red" projects are necessary for the completion of your project or if they turned "red" due to shared tools, resources, or materials.
- Past team failures. Previously completed projects by the team have been in the "red" zone or failed to meet expectations after completion.
Why does a project turn "red"?
There can be numerous reasons, including completely unexpected and unpredictable ones. Most of them, with proper planning, will be listed in the project risk map. However, it’s impossible to foresee everything.
From my personal experience, the most common reasons are:
- Ambitious timelines. Unrealistic deadlines were set initially under pressure from the client.
- Incorrect budget, resource, or availability estimates. Misjudging effort, forgetting about certain purchases, or underestimating hiring speed.
- Weak project scope and environment analysis. Failing to account for architecture, systems, and processes directly or indirectly affected during implementation.
There can be numerous reasons, including completely unexpected and unpredictable ones. Most of them, with proper planning, will be listed in the project risk map. However, it’s impossible to foresee everything.
From my personal experience, the most common reasons are:
- Ambitious timelines. Unrealistic deadlines were set initially under pressure from the client.
- Incorrect budget, resource, or availability estimates. Misjudging effort, forgetting about certain purchases, or underestimating hiring speed.
- Weak project scope and environment analysis. Failing to account for architecture, systems, and processes directly or indirectly affected during implementation.
The most unexpected and unpredictable reasons include:
- Pandemics, sanctions, or international disputes. Disrupted supply chains, altered workflows, changed material and labor costs, and revised business models and payback periods.
- Changes, arrests, or migration of owners or top executives. Accompanied by frozen funding or pauses in decision-making.
- Destruction or loss of project results. Servers, warehouses, prototypes, or their backups are irreversibly destroyed or lost.
- New laws. Emergency adoption of new laws (e.g., a record 21 days in Russia) that may prohibit or restrict the use of expected project outcomes.
- Personal conflicts. Key project participants are unable to work together, requiring a team reshuffle.
What to expect if your project is in the "red zone"?
"Red" projects typically attract significant attention from senior management and the project office. Depending on the company’s approved process, actions may vary slightly, but you will almost certainly need to prepare a project status report. The report should reflect key project parameters, existing deviations, and their causes. Ideally, it should also include a plan to return to the "green" status and a list of required project changes.
After submitting the report, stakeholders will need to decide on and approve the proposed changes, adjust the plan, or even terminate the project early. Don’t despair: view this as an opportunity. With additional attention, you can address obstacles or secure extra funding.
Moving toward "greening"
1. Eliminate the element of surprise. Ensure all stakeholders are aware of the status change. Senior management and the client will be shocked to learn about the "red" status from a weekly report rather than directly from you. Worse, they may face questions about the situation without being able to answer them. Discuss the situation with all stakeholders to avoid surprises. Synchronize understanding of the status and clarify that the project meets specific "red" criteria, the reasons are clear, and there’s a solid action plan. Emphasize that the project is being managed correctly and the situation is under control.
2. Prepare a report and change request. After analyzing the current status, submitting the report, and preparing a recovery plan, request specific changes from decision-makers to stabilize the situation.
"Red" projects typically attract significant attention from senior management and the project office. Depending on the company’s approved process, actions may vary slightly, but you will almost certainly need to prepare a project status report. The report should reflect key project parameters, existing deviations, and their causes. Ideally, it should also include a plan to return to the "green" status and a list of required project changes.
After submitting the report, stakeholders will need to decide on and approve the proposed changes, adjust the plan, or even terminate the project early. Don’t despair: view this as an opportunity. With additional attention, you can address obstacles or secure extra funding.
Moving toward "greening"
1. Eliminate the element of surprise. Ensure all stakeholders are aware of the status change. Senior management and the client will be shocked to learn about the "red" status from a weekly report rather than directly from you. Worse, they may face questions about the situation without being able to answer them. Discuss the situation with all stakeholders to avoid surprises. Synchronize understanding of the status and clarify that the project meets specific "red" criteria, the reasons are clear, and there’s a solid action plan. Emphasize that the project is being managed correctly and the situation is under control.
2. Prepare a report and change request. After analyzing the current status, submitting the report, and preparing a recovery plan, request specific changes from decision-makers to stabilize the situation.
- Request additional time: If more time is needed to complete tasks, provide a revised schedule and request changes to the project timeline.
- Request additional human resources: Sometimes, securing extra resources is the easiest solution. Ensure these resources are focused solely on the "red" project to accelerate stabilization.
- Request additional funding: If budget estimates were slightly off, provide an updated budget and revised economic efficiency calculations.
3. Approve changes and update documentation. After approval, update the project documentation. Follow the company’s process to ensure all requested and agreed changes are reflected in the project artifacts.
4. Monitor the approved action plan. At this stage, the key task is to regularly monitor all project parameters and prevent a return to the "red" zone. Remember, the best way to avoid the "red" zone is proactive project and risk management, timely communication of issues, and necessary adjustments to project parameters.
- Request additional human resources: Sometimes, securing extra resources is the easiest solution. Ensure these resources are focused solely on the "red" project to accelerate stabilization.
- Request additional funding: If budget estimates were slightly off, provide an updated budget and revised economic efficiency calculations.
3. Approve changes and update documentation. After approval, update the project documentation. Follow the company’s process to ensure all requested and agreed changes are reflected in the project artifacts.
4. Monitor the approved action plan. At this stage, the key task is to regularly monitor all project parameters and prevent a return to the "red" zone. Remember, the best way to avoid the "red" zone is proactive project and risk management, timely communication of issues, and necessary adjustments to project parameters.
Key takeaways
Don’t fear the "red" status. It’s an excellent opportunity for the project manager and team to mobilize, draw senior management’s attention to the problem, and remove obstacles to implementation. Remember, all project managers face this status at some point. Monitor project parameters, the environment, and the situation in other projects, and make timely adjustments to avoid surprises and extra effort on reports and "greening." If you find yourself in this situation, be transparent with the client and sponsor, act quickly, and decisively.
Don’t fear the "red" status. It’s an excellent opportunity for the project manager and team to mobilize, draw senior management’s attention to the problem, and remove obstacles to implementation. Remember, all project managers face this status at some point. Monitor project parameters, the environment, and the situation in other projects, and make timely adjustments to avoid surprises and extra effort on reports and "greening." If you find yourself in this situation, be transparent with the client and sponsor, act quickly, and decisively.
Next:
KPIs for Project Manager and project roles.
We are accustomed to the fact that every IT project has specific expectations and KPIs. Well-defined metrics are excellent for monitoring progress, status, efficiency, and the success of a project upon its completion. But what personal KPIs are set for the IT project manager and other team members?
