What would you want to know six months earlier?

What would you want to know six months earlier?

An early-warning system should begin with a decision that needs six months of lead time: securing capacity, refinancing, changing price, redesigning a product or reducing an exposure. Without that anchor, �knowing earlier� becomes a broad monitoring exercise that produces attention but no advantage.

Identify the assumption whose failure would force the decision, then trace its causal precursors. Combine market, customer, supplier, labour, regulatory and financial indicators only when each represents a credible mechanism. Specify expected lead, coverage, revision behaviour and the conditions in which the relationship may break.

Backtest with the data vintages available at the time, not revised history. Measure lead distribution, false alarms, missed events and stability across regimes. OECD composite leading indicators are explicitly designed to anticipate turning points, yet their methodology warns that lead times vary and signals can be false�an important model for honest use.

Create graduated thresholds linked to reversible actions. A weak signal might intensify research or buy an option; corroboration may change commitments; a high-confidence breach may activate a full response. Name the owner and review cadence, and record why management acted or declined so the system can learn.

Monitor the warning system itself for source drift and synchronized indicators that only appear independent. Retire signals that no longer add lead or decision value. Six months matters only if the organisation uses the interval to preserve choices that will be unavailable once internal performance confirms the change.