How to Create Useful Stoplight Charts

By CIOinsight  |  Posted 03-29-2004
Stoplight charts—named for their traffic signal color code use of red (no compliance), yellow (partial compliance), green (fully compliant, go!)—provide a simple and effective way to compare your vendor finalists on critical contractual issues, and, just as important, communicate these differences quickly to the ultimate decision-makers. To make your own, first be sure that you've narrowed the field to vendors who can deliver the product or service you seek. Create a column for each of these contenders across the top of the page, left to right. Next, going down the left margin, list the relevant legal and management concerns and prioritize them—making certain the make-or-break issues stand out.

If your decision-makers prefer numerical scoring, you can also use stoplight charts as a color-coded scorecard. To do this, assign a base weight for each of the issues (the most essential issues should weigh no more than ten times the least important). Multiply the base rate for each issue by the color: 3 for green, 2 for yellow, 1 for red. Add up the raw scores and calculate the average (number of points received/total number of possible points x 100). Needless to say, don't share your stoplight charts with vendors—or the game will be up.

— David Weidenfeld

To download an example of a Stoplight chart, click here.