Where should your lead indicators (KRIs or Key Risk Indicators in the field of risk) come from?

A few years ago my colleague Andrew Prately and I toured the country to speak at Chartered Accountants Business Forums. We spoke on KPIs – Key Performance Indicators. We talked about lead and lag indicators and we talked about limiting the number of KPIs, as having too many creates its own industry of measurement and reporting with very little influence on decision making. Because more often than not organisations are not measuring enough of the measures that really matter.

The answer to identifying the lead indicators (or KRIs) you should be measuring are best identified after you have a very clear understanding of the drivers of what is important to you. If your organisation has identified its strategic risks you likely have some high risks on a heat map. If you have high risks, presumably they are important to you. And if you follow my suggestion from last week’s Escaping the Matrix! blog you will be working on developing real clarity on what is driving the likelihood or consequence (or both) for one or more of your high risks. You should also be seeking clarity on the controls being relied upon to manage the risk. Are they reliable and effective when being deployed?

In amongst this analysis you will find one or two really important lead indicators you should be monitoring to give an early warning of this risk evolving into a risk event. For example, when it comes to safety in higher hazard industries, the one thing that matters the most is the level of engagement of senior management in conversations about safety. Staff take safety very seriously if senior management take it very seriously. Measuring the number and quality of senior management site safety visits would be a very good indicator, months in advance, of how your safety record will be trending.

Stay safe and adapt – with better measurement!

__________________________________________________________________________________


Bryan's new book teaches you practical methods to cut through with your advice and make the impact you want to make. Available on Amazon or order here now.

YOUR DECISIONS DEFINE YOU.

Available on Amazon or order here now.

Bryan Whitefield works with strategic leaders across all sectors to help organisations harness uncertainty – uncertainty is the strategic leader’s best friend. He is the author of DECIDE: How to Manage the Risk in Your Decision Making and Winning Conversations: How to turn red tape into blue ribbon. He is the designer of the Risk Culture: Build Your Tribe of Advocates Program for support functions and the Persuasive Adviser Program for internal advisers. Both can be booked individually or in-house. For more information about Bryan, please click here.

www.bryanwhitefield.com

Views: 17

Comment

You need to be a member of GlobalRisk community to add comments!

Join GlobalRisk community

Our Sponsors

Would you like to reach over 90,000 + Risk Professionals? 

REQUEST OUR MEDIA KIT

______________________

Current Partners Include:

  

 

 

 

Join GRC Inner Circle - Get Top Risk Resources, Member Support PLUS become our patron

Business Exchange

If your organization delivers products and services that bring value to our members, you are welcome to join our partnership program.

Companies are welcome to setup a business profile page in our Multimedia Business Directory. You will get full control of the page and can include cutting edge possibilities – videos, adverts, presentations, white papers, job offers, Press Releases, product information, company blog, news feeds and more.

CLICK HERE TO APPLY

Our Knowledge Partners

Request our MEDIA KIT

Our Twitter feed

© 2020   Created by Boris Agranovich.   Powered by

Badges  |  Report an Issue  |  Terms of Service