Strategic Alignment With AI and Smart KPIs

Aligning operations with strategy is a critical leadership task. Turbulent market conditions, agile competitors, and ongoing demands to digitally upgrade operations and processes make strategic alignment more challenging to manage. Digitally savvy leaders are addressing the alignment challenge by improving how they use and develop KPIs.

Drawing on a global survey of more than 3,000 managers and 17 executive interviews, we find leaders across the business spectrum using AI to enhance how KPIs are prioritized, organized, and shared. These enhancements have a direct, measurable effect on strengthening strategic alignment. These leaders also deploy AI to improve the accuracy, detail, and predictive capabilities of KPIs themselves. The improvements individually and collectively generate greater situational awareness and improve how corporate functions work together to achieve strategic outcomes.

Leaders acknowledge that they need new measurement capabilities and improved metrics to better anticipate and navigate strategic opportunities and threats.1 They recognize that new AI-based measurement abilities can deliver new performance insights and metrics, strengthen alignment, and improve outcomes. Our findings represent a clear and coherent call to action for leaders to create more integrated systems of forward-looking and interconnected KPIs.

These AI-enriched KPIs, or smart KPIs, can effectively act as an enterprise GPS, advising people about where they are, where they need to go, and how best to get there. These smart KPIs offer more detailed and accurate descriptions about what is happening in the business, more incisive predictions about what is likely to happen, and, in some cases, more proactive suggestions for what actions managers should take.