--- name: key-risk-indicator-kri-design-tool description: "Designs 5–10 Key Risk Indicators for a specific risk category, each with a precise definition, measurement formula, data source, green/amber/red threshold levels, and reporting frequency — plus an escalation protocol and dashboard layout. Use when building a risk monitoring dashboard, defining KRIs for a risk category, or setting up early-warning metrics and thresholds for operational, financial, compliance, or strategic risk." argument-hint: "[risk-category] [business-context]" allowed-tools: ["Read"] --- # Key Risk Indicator (KRI) Design Tool ## Purpose Produce a decision-ready set of Key Risk Indicators for a chosen risk category — each defined precisely enough to measure, with data sources, calibrated green/amber/red thresholds, and reporting cadence — so a risk team can move from "we should monitor this" to a working dashboard without further design work. ## When to Use Invoke this skill when the user asks to: - Design KRIs for a specific risk category (operational, financial, compliance, cyber, supply chain, strategic) - Build or populate a risk monitoring dashboard - Define leading indicators or early-warning metrics for a risk - Set green/amber/red thresholds for existing risk metrics - Establish reporting frequency and escalation triggers for risk monitoring - Convert a risk register entry into measurable, trackable indicators ## Inputs Required Before starting, collect: - **Risk category**: The specific risk area to monitor (e.g., liquidity risk, third-party/vendor risk, cybersecurity, regulatory compliance) - **Business context**: Industry, business model, and what the organization does - **Company size/stage**: Headcount, revenue band, or growth stage — affects which thresholds are realistic - **Existing data systems**: What tools/systems already capture relevant data (ERP, CRM, ticketing, GRC platform, spreadsheets) - **Risk appetite**: How much of this risk the organization is willing to tolerate (Low / Moderate / High), if known - **Regulatory or contractual obligations**: Any mandated metrics, SLAs, or reporting standards that apply - **Reporting audience**: Who reviews the dashboard (board, exec committee, operational team) If risk appetite is unstated, default to Moderate and note the assumption. If thresholds cannot be benchmarked precisely, provide a defensible starting range and flag it for calibration against 3–6 months of actual data. ## Instructions ### Step 1: Frame the Risk and Its Drivers Before generating indicators, break the risk category into its underlying drivers: - **Root causes**: What conditions cause this risk to materialize? - **Leading vs. lagging split**: Identify signals that appear *before* the risk crystallizes (leading) versus after (lagging). Prioritize leading indicators — a KRI dashboard that only reports lagging metrics is a post-mortem, not an early-warning system. - **Measurability filter**: A good KRI must be quantifiable, tied to a data source that actually exists or can be built, and sensitive enough to move before a loss event. Aim for a mix of roughly 60% leading and 40% lagging indicators in the final set. ### Step 2: Generate 5–10 KRIs Produce between 5 and 10 indicators (default to 7 unless the risk category clearly warrants more or fewer). For each KRI, define all of the following: 1. **KRI name**: Short, specific, dashboard-ready 2. **What it measures**: One sentence tying the metric to the underlying risk driver 3. **Type**: Leading or Lagging 4. **Measurement methodology**: The exact calculation or formula, stated so two people would compute the same number (e.g., "Number of overdue high-severity vulnerabilities ÷ total open high-severity vulnerabilities, measured monthly") 5. **Unit**: Percentage, count, ratio, days, currency, etc. 6. **Data source**: The specific system, report, or owner that provides the input data 7. **Data owner**: The role responsible for supplying the number 8. **Thresholds** — set three bands with concrete values: - **Green (acceptable)**: Within appetite; no action - **Amber (watch)**: Approaching tolerance; requires monitoring and analysis - **Red (breach)**: Outside tolerance; triggers escalation 9. **Reporting frequency**: Daily / Weekly / Monthly / Quarterly — matched to how fast the metric can move and how fast a response is needed ### Step 3: Calibrate Thresholds to Context Set threshold values using this logic, not arbitrary round numbers: - **Anchor to appetite**: Low appetite → tighter amber/red bands; High appetite → wider tolerance - **Anchor to benchmarks**: Where an industry standard, SLA, or regulatory limit exists, use it as the red line - **Directionality**: State whether higher or lower is worse, and set bands accordingly - **Avoid false alarms**: If a metric naturally fluctuates, base amber on a rolling trend (e.g., "2 consecutive periods above X") rather than a single reading - Where a threshold is a best-estimate rather than a benchmarked value, mark it **(calibrate after 3–6 months)** ### Step 4: Define the Escalation Protocol For amber and red breaches, specify: - **Amber trigger**: Who is notified, what analysis is required, and the review timeline - **Red trigger**: Who is escalated to (name the role), the required response window, and whether it goes to the board/exec committee - Include a **compound trigger** where relevant (e.g., "two amber KRIs in the same period escalates to red-level review") ### Step 5: Assemble the Dashboard Layout Provide a summary table of all KRIs suitable for a monitoring dashboard, ordered by reporting frequency (most frequent first). Recommend the review cadence for the dashboard as a whole and note which indicators warrant real-time or automated alerting. ## Output Format - **Structure**: Risk framing summary → detailed KRI cards (one per indicator) → threshold rationale → escalation protocol → consolidated dashboard table - **Length**: 1,000–1,500 words - **Format**: Structured document — KRI details as labeled cards or blocks; final dashboard as a table with columns for KRI, Type, Green, Amber, Red, Frequency, Data Source - **Sections**: Risk & Drivers Overview → KRI Definitions (5–10) → Threshold Calibration Notes → Escalation Protocol → Dashboard Summary Table - **Tone**: Risk practitioner — precise, defensible, quantitative; every threshold has a reason behind it ## Quality Checklist Before delivering output, verify: - [ ] Between 5 and 10 KRIs are defined (count them) - [ ] Each KRI includes all nine required fields (name, measures, type, methodology, unit, data source, owner, thresholds, frequency) - [ ] At least half the KRIs are leading indicators, not just lagging - [ ] Every threshold has a concrete numeric value or range — no "TBD" without a starting estimate and a calibrate flag - [ ] Green/amber/red bands are internally consistent with the stated directionality (higher-is-worse vs. lower-is-worse) - [ ] The escalation protocol names specific roles, not just "management" - [ ] The final dashboard table lists every KRI with its thresholds and frequency ## Notes - The most common failure mode is designing KRIs that require data no one collects — always tie each indicator to a data source that exists or is realistically buildable, and flag any that require new instrumentation. - Leading indicators are the whole point of a KRI program; if the user's risk category resists leading metrics, propose proxy signals (e.g., staff turnover as a leading indicator for operational and knowledge risk). - Fewer well-instrumented KRIs beat many that are estimated or manually maintained — resist padding the list to reach 10. - Recommend treating the first quarter of thresholds as provisional and recalibrating once real distribution data is available. --- ## How to use this skill This file is a Claude Code skill in [Anthropic's standard format](https://docs.anthropic.com/en/docs/claude-code/skills) — markdown with YAML frontmatter at the top. **Installing in Claude Code:** - `~/.claude/skills//SKILL.md` — auto-loads in every session anywhere on your machine (recommended for skills you'll use across multiple projects) - `/.claude/skills//SKILL.md` — auto-loads only when working in that project (recommended for project-specific skills) Restart Claude Code or open a new session to register. **Using in Claude.ai, ChatGPT, Gemini, or other AI tools:** 1. 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