How to use variable with command substitution in variable

For example I have variable like below

echo $OUTPUT
/some/path/`uname -n`

when I try to use the variable OUTPUT like below

cd $OUTPUT or cd ${OUTPUT}

I am getting bad substituion error message

$ cd $OUTPUT
ksh: cd: bad substitution
$ cd ${OUTPUT}
ksh: cd: bad substitution

What is the solution for this ?

How did you define the variable?