Reading the signals indicating your organisation is on-track or off-track (see Reading the tea leaves, Heading them off at the pass, KRISS or KISS) needs to be considered across three time horizons, in order to make your KPIs and KRIs “timely”.
My colleague Dr Andrew Pratley introduced me to the Three Horizons of Growth concept introduced by Mehrdad Baghai, Lar Bradshaw, Stephen Coley and David White in their 1999 paper in the Journal of Business Strategy.
Their thesis was that in order to sustain growth, you need to be monitoring which parts of the business are in mature, emergent and embryonic phases and that you need to keep feeding the growth pipeline with new products and services as existing ones fade away.
In the diagram below I take their lead and show the difference between the horizons in terms of risk. The implication is the type of risk assessment you will do, how often and to what end. For example, you don’t need to be assessing emerging risk as frequently as your day-to-day risks or risks to implementation of your strategy . But you should think about them from time to time – and more frequently – the more dynamic or disrupted your industry.
The next step is to identify the KPIs and KRIs that you should review each time you turn your mind to each horizon. They are very different and more obscure for emerging risks than for your day-to-day operational ones.
One thing is for sure. It re-emphasises for me that uncertainty is a strategic leader’s best friend. Embracing uncertainty is opportunity. Leading you to take opportunities others don’t know about or have not yet developed the capability to do so.
To read more on Time Horizons you can download Chapter 9; Reading the Signals from my book Risky Business: How Successful Organisations Embrace Uncertainty. Better still, buy my book and gain access to free resources that are there to help organisations perform better, faster!
PS. I’m thrilled to say my book Risky Business hit the #1 Amazon Best Seller list recently in the Risk Management Category. If you have read it and think it’s worthy of a review, I would greatly appreciate your time in leaving one. You would make this risk nerd very, very happy. You can email it through to me HERE.
 Baghai, M., Bradshaw, L., Coley, S., & White, D. (1999). Performance measures Calibrating for growth. Journal of Business Strategy, 20(4), 17-21.