MIT Sloan Management Review Article on The Future of Strategic Measurement: Enhancing KPIs With AI

Legacy key performance indicators (KPIs) increasingly fail to deliver the information and insights leaders need to succeed. They fall short in tracking progress, aligning people and processes, prioritizing resources, and advancing accountability. These failures both undermine operational efficiencies and compromise the pursuit of strategic objectives and outcomes. Sophisticated organizations worldwide recognize that their KPIs need to be measurably smarter and more capable. They consequently invest in algorithmic innovations to make their performance metrics more intelligent, adaptive, and predictive. Smart KPIs powered by artificial intelligence (AI) become sources — not merely measures — of strategic differentiation and value creation.

About the Author

Michael Schrage is a research fellow with the MIT Sloan School of Management’s Initiative on the Digital Economy. His research, writing, and advisory work focuses on the behavioral economics of digital media, models, and metrics as strategic resources for managing innovation opportunity and risk.

David Kiron is the editorial director, research, of MIT Sloan Management Review and program lead for its Big Ideas research initiatives.

François Candelon is a senior partner and managing director at Boston Consulting Group (BCG) and the global director of the BCG Henderson Institute, where his research focuses on the impact of technologies on business and society. He can be contacted at candelon.francois@bcg.com.

Shervin Khodabandeh is a senior partner and managing director at BCG and the coleader of BCG’s AI business in North America. He is a leader in BCG X and has over 20 years of experience driving business impact from AI and digital. He can be contacted at shervin@bcg.com.

Michael Chu is a partner and associate director at BCG, where he focuses on applying AI and machine learning to business problems in commercial functions, including optimizing pricing, promotions, sales, and marketing. He can be reached at chu.michael@bcg.com.

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