Improving key performance indicators is a clear mandate for most organizations. According to our seventh annual global executive AI survey, 7 out of 10 respondents agree that enhancing KPIs — not just improving performance — is critical to their business success. As one executive notes, “We need to evolve our KPIs all the time so we don’t run our business on legacy metrics.”

A growing number of companies now use AI — in a variety of ways — to accelerate that evolution. “I’m very excited about what machine learning can do in terms of having our senior leaders move away from metrics that look backward to metrics that can look forward,” says Avinash Kaushik, chief strategy officer at digital marketing agency Croud and a former senior director of global strategic analytics at Google.

Early on at Lyft, engineers designed an algorithm to maximize revenue by matching driver supply and customer demand. “It looked at all the possible combinations of riders and drivers and picked the combination that — based on the ride being requested, where the driver was located, all of the system dynamics — would maximize revenue,” says Elizabeth Stone, former vice president of science at Lyft. Then, as data scientists began testing other objectives, something interesting emerged. One AI solution discovered that optimizing conversion rates — how often a user ordered a ride after opening the app — would, in turn, deliver more ride requests in the future. More ride requests ultimately mean more revenue. As a result of using AI, Lyft transformed its revenue KPI from one focused on ride and driver combinations to one that also focuses on optimizing conversion rates.

At Tokopedia (part of GoTo Group), one of Indonesia’s largest marketplaces, AI sifts through petabytes of data to detect signals that are correlated with credibility and reliability. These are key considerations, given that 86.5% of its 14 million merchants — selling 1.8 billion products — are new entrepreneurs. Having more-credible merchants makes the marketplace more appealing, effective, and efficient. “They might have good products to sell, but they don’t know how to manage their stock,” says Herman Widjaja, Tokopedia’s CTO. “With AI, we connect our customers to the right product that is served by the right merchants that they want.” The company synthesized millions of possible signals into a scoring system that represents a new KPI around merchant quality.

While most respondents understand the need for enhanced KPIs, a clear majority currently rely on inadequate tools and technologies to manage their metrics. Even as machine learning algorithms and generative AI transform enterprise capabilities, human judgment remains the overwhelmingly dominant approach to KPI enhancement. Two-thirds of survey respondents affirm that managers make judgment calls when adjusting their organization’s KPIs. While common, this approach often fails to yield the desired results: Barely a third of survey respondents relying only on human judgment see their KPIs improve.