MIT Sloan Management Review Article on Leading With Next-Generation Key Performance Indicators

Accelerating technological innovation, intensifying competitive pressure, and increasing customer expectations are forcing business leaders to rethink how they use key performance indicators (KPIs) to lead and manage the enterprise.

Based on a global survey of more than 3,200 senior executives and interviews with 18 executives and thought leaders, we find business leaders worldwide are struggling to strike a workable balance between tactical and strategic KPIs; operational and financial KPIs; and KPIs that effectively capture the moment while anticipating the future. This imbalance is a source of measurable dissatisfaction and concern as data for KPI improvements continues to increase. Executives also appear torn between adding more detailed KPIs or lasering in on a smaller, simplified set. While no consensus KPI best practice emerged from the survey, we did find a small slice of companies are exhibiting sophisticated data-driven and analytically innovative approaches to maximizing the impact of their KPIs.

About the Author

Michael Schrage is a research fellow at the MIT Sloan School’s Initiative on the Digital Economy, where he does research and advisory work on how digital media transforms agency, human capital, and innovation.

David Kiron is the executive editor of MIT Sloan Management Review, which brings ideas from the world of thinkers to the executives and managers who use them.

Learn more about MIT SMR.