OKRs and SMART goals are repackaged versions of Peter Drucker's 1940s "Management by Objectives." This framework was designed for simple, repetitive tasks on an assembly line, making it fundamentally unsuited for today's complex, knowledge-based work where problems have no single right solution.

Exceptional people in flawed systems will produce subpar results. Before focusing on individual performance, leaders must ensure the underlying systems are reliable and resilient. As shown by the Southwest Airlines software meltdown, blaming employees for systemic failures masks the root cause and prevents meaningful improvement.

Focusing on individual performance metrics can be counterproductive. As seen in the "super chicken" experiment, top individual performers often succeed by suppressing others. This lowers team collaboration and harms long-term group output, which can be up to 160% more productive than a group of siloed high-achievers.

In a supportive culture, managing underperformance starts with co-authored goals upstream. When results falter, the conversation should be a diagnostic inquiry focused on removing roadblocks. This shifts the focus from the person's failure to the problem that's hindering their success, making tough conversations productive.

According to Goodhart's Law, when a measure becomes a target, it ceases to be a good measure. If you incentivize employees on AI-driven metrics like 'emails sent,' they will optimize for the number, not quality, corrupting the data and giving false signals of productivity.

The culture around OKRs often treats the framework as gospel. When teams struggle, the default response is "you're doing them wrong," labeling critics as heretics. This prevents genuine discussion about whether the system is fundamentally flawed, trapping organizations in a cycle of failed implementation.

Teams often focus on perfectly implementing frameworks like OKRs or Discovery, creating a false sense of achievement. This "alibi progress" prioritizes methodology correctness over creating value in a specific context, leading to lots of outputs but no outcomes.

Rewarding successful outcomes incentivizes employees to choose less risky, less innovative projects they know they can complete. To foster true moonshots, Alphabet's X rewards behaviors like humility and curiosity, trusting that these habits are the leading indicators of long-term breakthroughs.

Solely measuring a team's output fails to capture the health of their collaboration. A more robust assessment includes tracking goal achievement, team psychological safety, role clarity, and the speed of execution. This provides a holistic view of team effectiveness.