Are your key results undermining your objectives?

An obsession with the numbers can sink your strategy

Over the years, many things have derailed great strategies, but perhaps the most unexpected is surrogation. Surrogation is when an organization uses a metric as a surrogate for the strategic objective it was meant to measure. In other words, the team starts chasing the number, not the goal.

"In OKR terms, surrogation is confusing the 'KR' with the 'O'."

Surrogation shows up in at least 70% of the failed OKR implementations we have reviewed. Why? Because Objectives can be abstract. When that happens, people mentally replace the Objective with the Key Results. The KRs are meant to tell you whether you are succeeding at the strategy. They are not the strategy itself.

You have probably seen this play out. A common example: an organization sets the Objective "Be our customer's trusted advisor" and pairs it with the KR "$ Sales per Customer," reasoning that loyal, well-served customers will spend more. But by the end of the quarter, the Sales team is focused on maximizing that dollar figure, even when doing so quietly erodes the trusted advisor relationship they were supposed to be building.

The good news: surrogation is preventable with good OKR design. And if you did not catch it in your initial launch, it is recoverable, as long as you act early.

What does the research tell us?

In 2010, Jongwoon Choi, Gary Hecht, and William Tayler published Lost in Translation: The Effects of Incentive Compensation on Strategy Surrogation, which introduced the term "surrogation" in the context of compensation and performance measurement.

Their finding: firms build strategic performance measurement systems to translate strategy into measurable outcomes. Ideally, managers see those measures for what they are, which is imperfect proxies for intangible strategic goals. In practice, managers often treat the measure as if it were the goal itself. That is surrogation, and it actively undermines strategy execution.

The research showed that linking performance measures to compensation made surrogation significantly more likely. The stronger the financial incentive tied to a KR, the more likely people are to chase that number rather than the outcome behind it.

Five ways to prevent surrogation

The following approaches address surrogation at the design level, before it takes hold.

1. Write Objectives as outcomes, not outputs

Objectives should describe the result you want, not the activity that produces it. In call centres, a common mistake is an Objective like "Reduce customer support talk time" paired with a KR target of 4.5 minutes. That is an output. The actual outcome is getting customers past the problem they called about and back to full productivity. Phrased as an outcome: "Quickly get our customers back to full productivity."

Think of outputs as things you do. Outcomes are the consequence of what you did.

When you spot an output-style Objective, ask "Why?" repeatedly until you surface the real outcome that matters at that level of the organization.

Outcome-based Objectives do two things at once:

• They reduce surrogation by removing the focus from the number itself.

• They create space for creative problem-solving. There are many more ways to "get customers back to full productivity" than cutting call time: online help, chat support, user communities, better documentation, and more. Your team can find the right path when the OKRs point to the destination, not the route.

2. Choose KRs that precisely point to the Objective

Directionally correct KRs are not good enough. If hitting a KR would not reliably signal that the Objective is being achieved, it is the wrong KR.

"Whoever said 'be careful what you ask for, you might just get it' was talking about KRs."

A useful test: ask yourself what would happen if surrogation took hold with this KR. Would people gaming that number still be moving toward the Objective? If not, keep looking.

The best KRs often already exist somewhere in the organization, buried in transaction systems or spreadsheets. Start with the strongest ones you can find. Expect your KR quality to improve quickly over the first two or three quarters as more of the organization engages with OKRs and surfaces better signals. Swap weaker KRs out as soon as better ones emerge.

3. Prioritize your KRs by quarter

Not all KRs carry equal weight at every stage of execution. When leadership treats all KRs as equally important, teams default to whichever one feels most familiar or easiest to move. That is surrogation by default.

Consider a strategy around launching a new product into a new market segment. The Sales team has three KRs: "Number of New-Market Sales Calls," "New Product Sales $," and "Sales Closing Ratio."

Left unweighted, the team will likely gravitate toward "Sales Closing Ratio" because it is the most familiar metric. But leadership knows the real sequence: first, reach new customers; then, sell the new product; then, improve close rates.

Weighting by quarter keeps the focus where it belongs:

• Q1: 80% on "Number of New-Market Sales Calls," 10% each on the others.

• Q2: 80% on "New Product Sales $," 10% each on the others.

• Q3: 80% on "Sales Closing Ratio," 10% each on the others.

Weighting is not bureaucracy. It is leadership communicating what matters most, right now, so the team does not have to guess.

4. Keep performance conversations anchored to the Objective

Shifting a team's attention from KRs back to Objectives requires deliberate, repeated effort. A few practices that help:

• Involve people in creating the strategy. Ownership follows involvement.

• Let each level translate Objectives downward. Department owners translate corporate Objectives into department OKRs. Process owners translate those into their OKRs. Teams do the same. When people write their own cascaded Objectives, they connect with the goal behind the number.

• Swap weak KRs for more precise ones quickly. A KR that does not clearly point to the Objective creates confusion and invites surrogation.

• Treat KRs as answers to one question: "As measured by?" They are not the goal.

• Start or end every performance conversation with the Objective, not the KR score.

5. Loosen the link between OKRs and rewards

Notice the word is "loosen," not "remove." Ignoring OKRs in performance and reward conversations would send the wrong signal entirely. But making them the primary or sole basis for compensation is exactly what accelerates surrogation.

OKRs are a navigational tool. As covered in the Six Types of KRs, they help you steer the business: do we turn left or right? Navigational KRs tend to be leading indicators.

Compensation metrics, by contrast, tend to be lagging, must be auditable, and need to fit the S.M.A.R.T. framework. That is fundamentally at odds with the aspirational, stretch-goal nature of well-designed OKRs. When you tie pay too tightly to a KR, you guarantee that people chase the number. Keep OKRs as one input into reward conversations, not the scorecard.

Surrogation is fixable, but catch it early

Surrogation is one of the top five reasons OKR implementations fail. It is also one of the most invisible problems: teams look busy, numbers move, and no one realizes the strategy is quietly being replaced by its own measurement system.

The encouraging reality is that organizations can recover. It takes honest coaching, a few design changes, and leadership willing to refocus conversations on outcomes over outputs.

The goal is a team that knows what winning actually looks like, not just what the dashboard says.