MIT Sloan Management Review Article on AI Is Helping Companies Redefine, Not Just Improve, Performance

Performance measurement has been a top management imperative ever since Frederick Winslow Taylor’s seminal work “Principles of Scientific Management” revolutionized business processes more than a century ago. Taylor’s stopwatch, ruthlessly deployed to monitor and maximize worker productivity, became a controversial symbol of performance analytics. More recently, the purpose of measuring performance has expanded well beyond efficiency and now includes the strategic optimization of a range of business functions and outcomes.

Thanks to radical improvements in artificial intelligence, the purpose and practice of measurement are expanding even further. Executives are working with machines to develop new perspectives on what drives performance and how best to measure it. Much as NASA’s James Webb Space Telescope has overturned astronomers’ understanding of the universe by observing it with unrivaled range and power, AI is overturning organizations’ understanding of performance.

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 and 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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