Topics
Artificial intelligence and business strategy
The Artificial Intelligence and Business Strategy Initiative examines the growing employ of artificial intelligence in the business environment. The study focuses in particular on the impact of artificial intelligence on the development and implementation of strategies in organizations.
More in this series
Aligning operations with strategy is a key leadership task. Turbulent market conditions, agile competitors, and constant demand for digital modernization of operations and processes make strategic alignment more arduous to manage. Digitally savvy leaders address the challenge of alignment by improving how they employ and develop KPIs.
Based on a global survey of over 3,000 managers and 17 executive interviews, we found that leaders across the business spectrum are using AI to improve prioritization, organization and sharing of KPIs. These improvements have a direct, measurable impact on strengthening strategic alignment. These leaders are also implementing artificial intelligence to improve the accuracy, detail, and predictive capabilities of the KPIs themselves. Individually and collectively, improvements generate greater situational awareness and improve how corporate functions work together to achieve strategic results.
Leaders acknowledge that they need modern measurement capabilities and improved indicators to better anticipate and address strategic opportunities and threats.1 They recognize that modern AI-powered measurement capabilities can provide modern performance insights and metrics, strengthen alignment, and improve outcomes. Our findings provide a clear and consistent call to action for leaders to create more integrated future-proofing systems and interconnected KPIs.
These AI-enhanced KPIs or wise KPIs can effectively act as a corporate GPS, advising people where they are, where they need to go and the best way to get there. These shrewd KPIs offer more detailed and right descriptions of what’s happening in the company, more right predictions about what’s likely to happen, and in some cases, more proactive suggestions about what actions managers should take.
Bibliography
1. M. Schrage, D. Kiron, F. Candelon et al., “Improve Key Performance Indicators With AI,” MIT Sloan Management Review and Boston Consulting Group, July 11, 2023, https://sloanreview.mit.edu.
2. M. Schrage and D. Kiron, “Leading With Next-Generation Key Performance Indicators,” MIT Sloan Management Review, June 26, 2018, https://sloanreview.mit.edu; and M. Schrage, D. Kiron, F. Candelon et al., “Improve Key Performance Indicators With AI,” MIT Sloan Management Review and Boston Consulting Group, July 11, 2023, https://sloanreview.mit.edu.
