Parshas Bamidbar introduces to us the flags and banners of the tribes and their encampments. Each tribe had a flag of its own, with a specific color and insignia.
Then there was a banner for each group of three tribes, as they encamped together around the Mishkan, surrounding it on four sides.
The banners of the groups of three bore the colors of the individual tribes in that grouping, as well as letters which, when combined, spelled out the names of the Avos: Avraham, Yitzchak and Yaakov.
An underlying message of this was that through Unity, we can access the merit of our holy forefathers, but without it, we cannot. However, the idea of a flag and colors is important for the individual as well.
There is a natural human desire to fit in, to be part of something bigger than ourselves. When we are part of a group or movement, then our own convictions are strengthened by knowing there are others who think as we do.
How we identify ourselves, and with whom we identify, are key to our success in Avodas Hashem. When you stand for something, you will be better able to resist the temptation to stray. When you hold yourself to a standard (another name for a banner, btw), you remain steadfast in your beliefs and behavior.
Hashem therefore instituted flags and colors so everyone would know where they stood.