For Better Business Results, Use Yellow Lights

Quick Question

Why are functioning traffic lights at an intersection so much better than a policeman signaling traffic?

  1. The yellow light gives each driver a signal in advance, a heads-up allowing all approaching traffic to make decisions ahead of time and adjust their behavior. If close enough to the intersection, the driver can continue or even (so I have heard J) speed up. If far enough away, the driver can
    slow down and brake. Policemen have but two signals: a wave of the hand (green) and an outstretched palm (red).


  2. The traffic lights are above the level of traffic and quite visible. On straight streets, they can be seen as far as a mile away. With their illumination, a driver from any direction can clearly see the lights and respond. By contrast, the policeman is at ground level with his hand signal at most six feet off the ground. He is all but invisible to you until that big black Escalade in front passes him by.


  3. The traffic lights are consistent. There is a consistent time that the lights are green. And there is a set and carefully considered duration for the yellow light allowing traffic to come to a halt in one direction before traffic in the other direction proceeds through the intersection.

In short, the yellow lights make the difference.

But, what does this have to do with business?

To optimize any aspect of your business – be it operations, sales, or customer service, it is beneficial to communicate with yellow lights.

In short, give a heads-up or an advance warning of impending problems.

Use yellow lights to give the customer or the other party, a heads up that there may be a problem or that you will be delayed. This signal in advance allows the other party to adjust what they are doing to reduce the fall-out from the setback or delay. As one customer wrote us after being adversely effected by a delay which we had not communicated to him:

Had all parties known of the delays, we may not have been happy but at least we would have had an opportunity to make planned adjustments to schedule and revenue. And we may have avoided the negative financial consequences which resulted from this delay.

To make the yellow lights as effective as possible, make them visible and obvious so that everyone knows that there is the potential for a problem. Clear communication to all involved is essential. An example from the world of production would be kanban cards, which offer a clear, visible method of yellow lighting and indicating that a level of stock may be low and soon needs to be replenished. The point of this effective communication is to ensure that attention is directed towards solving the issue that is causing the yellow light and mitigating the fall-out from the setback.

Further, create consistency in the use of yellow lights. Require yellow lights in all cases where there might be an upcoming issue. The more consistently yellow lights are used, the less of a stigma will be attached to admitting that something might be going wrong. Nearly all employees are aware of the historical fact that (yes) messengers often do get shot. By encouraging regular and consistent yellow lighting, you can reduce the innate (and justifiable) fear of communicating a problem or potential problem.

The alternative to using yellow lights is to abruptly change from the cruise control of a green light to the car crash of a red light. As a result, the problem is not promptly addressed, everyone else is caught by surprise, and the resulting damage from the problem or delay is magnified.


About David Shedd

David has been a President - CEO - COO of an up to $350M group of manufacturing, distribution, specialty retail and services companies, having led 22 different businesses from turnarounds to start-ups to fast growth companies.
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