57% of business leaders say their metrics will fail. Here’s what works instead

There is a growing consensus among global industrial leaders: the stable foundations that once underpinned long-term corporate strategy have dissolved. We have entered an era where geoeconomic fragmentation and AI disruption are no longer simply emerging trends — they are the permanent conditions of the modern marketplace.

At a recent meeting of industry leaders, one exchange captured what this means for how companies measure performance. At Siemens’ Amberg factory — part of the World Economic Forum’s Global Lighthouse Network — AI deployment into quality assurance nearly failed. Not because the technology was inadequate. Because the workforce did not trust it. The resolution came from involving workers in the system's design and making its decisions explainable.

This pattern plays out in our data. In September 2025, we surveyed 300+ business leaders about their KPI systems.

The results: 69% recognize their metrics have strategic potential. Yet 57% identified one threat above all others — a lack of leadership engagement with the metrics that matter.

Companies are investing billions in AI-powered dashboards, predictive analytics and real-time reporting. Yet multiple independent studies show a widening gap between data availability and decision quality.

MIT’s Project NANDA research finds roughly 95% of generative AI pilots show no measurable profit and loss impact. A recent Harvard Business Review analysis warns that legacy metrics are actively derailing transformations — organizations track what made them successful in the past, not what will drive future performance. Gartner data confirms the scale: only 1 in 50 AI investments delivers transformational value.

Meanwhile, Gallup’s latest global workplace report reveals employee engagement has dropped to 21% — with manager engagement at just 27%. Managers account for 70% of the variance in team engagement. When they disengage from process metrics, the entire measurement system becomes organizational waste.

More dashboards do not solve a meaning problem.

The pattern we see across industries is remarkably consistent. Board sets aggressive financial targets. Targets cascade down. Pressure builds. Results disappoint.

The response often goes something like this: cut headcount, defer maintenance, restructure. The processes creating value? Still broken. Often worse.

One manufacturing company — an established brand, in a strong market position — cut 12% of its workforce after two quarters of revenue decline. It froze capital investment. What it didn’t address were the processes causing customer delays, quality defects and operational waste.

Three quarters later: customer satisfaction is down. Defect rates are up. The best talent is leaving.

Masaaki Imai, who founded our organization, called this the “spiral of death.” Short-term financial optimization destroying long-term capability.

Organizations achieving breakthrough results — 30-40% efficiency gains sustained over multiple years — build their measurement systems in the opposite direction.

They use four metric levels:

Level 1 — People capability. Employee engagement in improvement. Problems solved per week. Skills development. This is the foundation — and the level most organizations ignore.

Level 2 — Process performance. Cycle time. Waiting time. Defect rates. Work-in-progress levels. These are the levers leadership can directly influence.

Level 3 — Customer experience. On-time delivery. Response time. Satisfaction scores. These are consequences of Levels 1 and 2.

Level 4 — Financial outcomes. Revenue growth. Margin improvement. Cash flow. These are results — not drivers.

The routine: measure and improve Levels 1-2 daily. Review Levels 3-4 strategically.

The Forum’s Global Lighthouse Network confirms this logic at scale. Their research across 1,000+ industrial transformations in 32 countries shows that 94% of successful transformations combine multiple technology domains — but only when grounded in leadership-driven process discipline. Technology without process redesign creates pilots without returns.

Our survey revealed two connected insights: 44% of leaders see “empowering frontline teams” as their biggest opportunity. And 57% see “lacking leadership engagement” as their biggest threat.

These are not separate issues.

The Forum’s recent Industry Strategy Meeting in Munich arrived at the same conclusion from a different angle. As Francisco Betti, the Forum’s head of the Global Industries Team, reflected in an article after the event: “Strategy must be set from the top and adoption must be earned from the bottom.”

At Siemens’ Lighthouse factory, the AI quality system succeeded only when leaders made workers part of the development — not recipients of it. This is not a feel-good management philosophy. It is the operational mechanism through which measurement systems create value rather than waste.

When leaders engage daily with process metrics where work happens — asking specific questions, celebrating improvement behaviours, removing obstacles — teams take the metrics seriously. Engagement rises. The improvement cycle accelerates.

When they don’t, the opposite occurs. Updates slow. Data quality degrades. The dashboard becomes furniture.

Distribution check: What percentage of your tracked metrics are financial (Level 4)? If it is 80% or more, you are working backwards.

Engagement check: When did senior leaders last spend an hour discussing process metrics with frontline teams? If it has been more than a week, you have the 57% problem.

Ownership check: Can each team name the 3-5 metrics they own and improve? If not, empowerment remains theoretical.

Action check: For your top 10 KPIs, name the specific action taken in the past 30 days based on what the metric revealed. If you cannot, you are measuring without improving.

2026 is the year companies must prove AI returns value — or lose ground to those who do.

The bottleneck is not technology. It is whether leadership treats process performance as a daily discipline or a quarterly review topic.

You can continue the traditional path — set financial targets, pressure teams, accept the spiral.

Or flip the system. Focus daily attention on people capability and process performance. Empower teams. Watch customer satisfaction and financial results follow.

In four decades of implementation work across 60+ countries, one pattern holds without exception: the metric system is just the mechanism. The real system is human.