XSCALE Podcast #11: Throughput Accounting & RAG Status Blue
Channel: XSCALE Alliance
Date: 2018-08-24

Traditional “Red, Amber, Green” status reporting generates watermelon programs: green outside, red inside. RAG status motivates heroics, cut corners, lost growth opportunities, and layers upon layer of legacy like ancient Troy.

"Blue" RAG status is like water, not watermelon. It means continuously and transparently reporting real contributions of value streams to top-line business throughput. Distinguishing components of operating expense that are “truly variable” - which per Lean we should minimise - from those that fund the capability to generate net profit, which TOC and DevOps work to increase.

“What you don’t measure, you can’t optimise” said Goldratt. So in this podcast we look at how measuring productivity in real business terms empowers people to work together to increase it, not “just meeting my KPIs". We take a hard look at the fallacies of cost-accounting, project-funding and component teams, and provide sane and simple alternatives.