Tip of the month – Key Indicators: real-time alerts staying ahead of risk
Did You Know?
Did You Know?
Key Indicators (KIs) are metrics used by organisations to provide early warning alerts of increasing risk exposures across the enterprise.
This article demonstrates how BarnOwl’s key indicator functionality serves as an early warning system for monitoring risks, including reputational risk. Reputational risk can be one of the most damaging types of risk an organisation faces, because it directly affects stakeholder trust and confidence — the foundation of long-term success. Its impact is often broader and longer-lasting than operational, financial, or compliance risks, and it’s often called an amplifier risk: a single reputational event (e.g., poor service, misconduct, data breaches, unethical practices, or compliance failures) can magnify the impact of other risks and spread rapidly through media and stakeholder networks.
BarnOwl offers a simple and effective way to update and monitor key indicators, delivering real-time alerts that cascade from the process level through to the strategic level; ensuring that every level of management remains informed of the evolving risk environment.
FIG1: Risk register showing reputation risks rated by impact and likelihood
For example, the risk: “Reputational damage relating to customer experience & trust” has a residual likelihood (RL) rating of 2.00. How do we know if the likelihood of this risk is increasing or decreasing? Periodic risk assessments, often subjective in nature, are not sufficient on their own; we need up-to-date key indicators that provide advance warning of potential issues before risks escalate.
FIG2: Key Risk Indicator ‘Customer complaints’ linked to the risk ‘Reputational damage relating to customer experience & trust’
By linking relevant KRIs to each risk and keeping them up to date, we can monitor whether the risk is increasing in likelihood.
Other example KRIs for this risk include:
- % of complaints escalated to ombudsman/regulator
- Customer churn/attrition rate
- Net Promoter Score (NPS) or customer satisfaction survey results
- Social media sentiment index (negative mentions vs positive)
FIG3: KRI trend per business unit per period
Monitoring the number of ‘Customer complaints’ on a monthly basis against pre-defined thresholds provides an early indication of whether the likelihood of the risk is increasing or decreasing. In the example below, the number of customer complaints breached (i.e., in the red) the pre-defined thresholds in August (#290) and September (#205).
FIG4: Risk re-assessment alerts
When a KRI threshold is breached, the risk owner is notified both by email and via a red exclamation mark on the risk register, prompting a re-assessment of the risk. Re-rating a risk subsequently triggers a re-assessment of its parent risk and/or related objectives, ensuring that early warning alerts cascade up to higher management levels.
FIG5: Action plans
And finally, action plans drive accountability and ownership for remedial action.
- My Action Plan portal – free license to unlimited users
- Start date, end date, action plan status, email notifications, progress notes, attach evidence, etc.
- Automated email notifications, reminders and escalation
Conclusion
Reputational damage often becomes visible only once it’s too late — after a social media storm, a customer exodus, or a regulatory headline. By tracking leading and lagging indicators, organisations can spot emerging issues early and take corrective action before they escalate.
BarnOwl provides management with clear visibility of key indicators across the organisation, ensuring timely, informed decision-making in a changing risk environment.
South Africa cannot afford another Steinhoff, another Eskom or another data scandal that weakens trust in our institutions. Governance isn’t paperwork. It’s resilience. It’s reputation. It’s the story your shareholders tell, your customers believe and your market trades on. Governance is reputation. And the leaders who understand that will be the ones still standing when the storm passes.
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About BarnOwl
BarnOwl is a fully integrated governance, risk management, compliance and audit software solution used by over 150 blue-chip organisations. BarnOwl is a locally developed software solution and is the preferred risk management solution for the South African public sector supporting the National Treasury risk framework. Please see www.barnowl.co.za for more information.
