Rethinking Risk: Why Red Flags Are Not Failure

We've all seen it - projects that stay “green” for months, only to turn deep red overnight. But let’s be honest—risks don’t appear out of thin air. They were always there, just hidden.

Why does this happen? Because we’ve been conditioned to see green as good and red as bad. And that’s a problem.

The truth is: Red is not failure. Red is intelligence. The only real failure is failing to raise a red flag in time.

In high-stakes projects - whether it’s modernizing legacy systems, launching new products, or building complex solutions - avoiding early escalation isn’t just bad practice. It’s risky. So how do we change this? How do we build a culture where raising risks early is the norm, not the last resort?

Here are some actionable shifts we need to make:

1. Reframe Red as an Early Signal, Not a Judgment

Most people hesitate to raise risks because they fear scrutiny. We need to shift the perception:

• A project update that highlights risks should be seen as a well-managed project, not a troubled one.

• Red flags should be conversation starters, not blame triggers.

• Leaders must appreciate early risks, not just expect last-minute firefighting.

2. Make Risk Reporting an Ownership Mindset, Not a Compliance Task

Many teams report risks because they have to, not because they own them. That’s a major gap.

• Leaders should openly discuss their own risks, setting the right tone.

• Teams should raise risks even before they have a mitigation plan, instead of waiting until they have an answer.

• Early risks should be recognized, not penalized—because a late red is always worse than an early one.

3. Introduce a “What’s Your Red?” Ritual

Instead of waiting for risks to be flagged, let’s actively ask about them:

• Every sprint review, stand-up, or key meeting should include: “If something were to go wrong, what would it be?”

• This normalizes risk discussions, making them a habit, not a confession.

4. Recognize and Celebrate “Good Red” Moments

Raising risks should be encouraged, not feared.

• A simple acknowledgment like “Thanks for flagging this early—we avoided a much bigger issue” goes a long way.

• Teams should feel safe sharing risks, knowing they won’t be punished for it.

5. Create a “No Penalty, No Backlash” Rule

Nobody should fear that raising risks will come back to hurt them in performance reviews.

• If backlash happens (even subtly), it must be addressed openly.

• Leaders should reinforce that early escalation is a sign of responsibility, not failure.

6. Train Managers to Respond to Red the Right Way

Many leaders unknowingly discourage risk escalation because they react with frustration instead of curiosity.

• Managers should ask “What do you need?” instead of “Why is this happening?”

• Risk-aware leadership should be a skill we actively develop—not something we assume will happen naturally.

7. Build Safe Spaces for Escalation

Psychological safety is critical. If people don’t feel safe raising issues, they won’t do it.

• Teams should have dedicated spaces (anonymous forms, leadership check-ins) to raise concerns.

• Reinforce that no risk is “too small” to discuss.

8. Track Transparent Risk Metrics

We track so many things—why not risk management effectiveness?

• Track how many risks were flagged vs. how many actually materialized.

• Measure how early risks were raised compared to when they became issues.

• Consider a “Red Board” where teams document flagged risks and how they were addressed.

9. Stop Filtering Risks at the Wrong Level

One of the biggest problems? Risks get filtered before they reach the right people.

• If junior team members don’t feel safe flagging risks, and mid-level managers hesitate to escalate them further…

• We don’t have an escalation culture—we have a filtering problem.

A risk that gets flagged but ignored is just as bad as a risk never flagged at all.

10. Flip the Default: Assume Red Until Proven Green

Instead of green being the default, what if teams had to prove that green is real?

• Meetings should include: “Here are the areas that could have been red, and here’s what we did to mitigate them.”

• Green should be earned, not just assumed.

Right now, green is often a camouflage. It should be a badge of confidence.

11. Reinforce the Message Until It Becomes Second Nature

Culture shifts don’t happen overnight. They need deliberate reinforcement:

• All-hands meetings, project kick-offs, and major reviews should reinforce this mindset.

• Leaders should repeat the message in different forums, ensuring it sinks in.

• Even casual discussions should normalize risk escalation as a positive habit.

12. Treat Escalation Like a Relay, Not a Bottleneck

A risk that gets stuck at one level is a wasted risk.

• If an issue isn’t resolved, it should keep moving up the chain until someone can act on it.

• No one should feel like they need to “quietly fix” something to avoid escalation.

Escalation isn’t failure—it’s smart problem-solving.

13. Get Comfortable with: “If in Doubt, Escalate”

If a project looks too green, one of two things is happening:

1. The team is truly perfect (unlikely).

2. They’re not being fully honest about risks.

It’s always better to escalate early and be wrong than stay quiet and let risks evolve into crises.

Final Thoughts: Moving from a Camouflage Culture to a Confidence Culture

The goal here isn’t just to make red less scary.

The real shift?

• Red should be a proactive leadership trait, not a defensive move.

• When red becomes a sign of intelligence, not failure, teams feel safe raising risks before they become disasters.

• Internal voluntary escalation is always better than external client escalation.

If we do this right, we move from a culture where green is a camouflage to one where green actually means something.

Time to change the way we think about risk.