How does top-down management compare to the bottom-up approach? How do you know which one is best in your business or department? Learn all there's to know in our comparison guide.
What makes the difference between mediocre and brilliant management? Contrary to popular opinion, the charisma of a leader is not the decisive factor. There must be a system, a specific approach to managing people that would unify the efforts of everyone involved.
Roughly speaking, management as a process can flow in two directions – from the top down and from the bottom up. Each of these approaches is valid, and each is suitable for certain environments. So let’s discuss the characteristics of the top-down and the bottom-up management styles, pointing out the key differences.
A top-down approach is a traditional management style we’re all familiar with. Senior leaders, who are at the top of the company hierarchy, take charge of the decision-making process, make plans, and outline the strategy. Their decisions are communicated down the hierarchy, and everyone else, including middle-rank managers, is expected to execute the plan.
This management style is autocratic. Decision-making is centralized at the top, and communication flows only in one direction – employees neither provide feedback nor suggest their own solutions.
In the top-down model, upper management sets a goal, develops a plan, and then assigns tasks for employees to complete. In other words, the decisions made at the top are broken down and turned into tasks for departments and individual employees.
Since only a few people are decision-makers, the expectations are clear. This enables the company to switch to the execution phase pretty fast.
The top-down approach is characteristic of organizations with traditionally hierarchical org charts. It's typical for larger companies, and also for those working in heavily regulated industries where it’s vital to stick to the rules. Such industries include but are not limited to the following:
In these industries, there is not much room for experimentation or democracy – people must work within certain boundaries, not breaking any rules.
A good example of how a top-down approach works is a healthcare organization. Multiple teams work together, limited by regulations. The stakes are high, so directions come from executives. Alignment among teams is critical.
However, there are exceptions. The military, with its one of the most autocratic management systems, started to allow more freedom of action on the lower levels of the hierarchy – a great illustration is the “team of teams” approach, applied by General McChrystal in Iraq during the fight against Al-Qaeda.
Exceptions can also be met even in the healthcare sector – in particular, in the Netherlands, where Buurtzorg, a healthcare organization, was founded on the principles of self-managed, nurse-led teams.
Yet, the rule of thumb is that if you work in certain industries that require consistency of process implementation, or if your company includes multiple sub-teams working on different projects or different parts of the same project, you apply the top-down approach. A rigid structure will keep the employees organized and let the work processes run more smoothly.
Even though the autocratic management style that determines top-down management may seem like a thing of the past, the top-down model is still appropriate, even though it has its drawbacks.
The bottom-up approach in management, though not fully experimental at this point, is pretty new. It is a model where vision and decisions are based on input from team members at all levels. By collaborating with each other, employees determine what needs to be done in order to achieve the common goal. In this model, they are more empowered to influence the work process and the overall result, as they have more autonomy.
The bottom-up approach is more innovative – it’s opposite to the old principle of “the one best way”, established back in the Henry Ford times, which excluded the pluralism of thought at work. Team members are welcome to give feedback and set goals from the bottom up. They communicate across the company levels and together look for the right steps to take to reach their common goals.
According to Shane Barker, a digital marketing consultant at Forbes, the bottom-up management approach works best for millennials, who constitute the largest part of America’s labor force. For a company to succeed, it needs engaged workers, and engagement is achieved through empowerment. (The top-down approach, in contrast, is more typical for the representatives of Generation X and baby boomers).
The hierarchy at organizations sticking to the bottom-up models is less rigid. Here the hierarchy often reflects the actual way people group together, which doesn’t always correspond to the official org chart.
Giving people the right of voice, the bottom-up approach emphasizes the principles of the democratic leadership style. It excludes micromanagement and underlines that every worker has unique skills, knowledge, and experience from which the company can benefit. Even more, it recognizes that people who are directly involved in all work processes may have a better understanding of the situation, so their input is extremely valuable.
The bottom-up approach is typical for small start-ups, where there are just a few people working on the same project. Besides, it’s typical for organizations where collaboration and creativity are very important, like software development and product design.
A good example illustrating the bottom-up model is the work of engineering and product teams developing a new feature. The engineers know the technical capabilities of the company, and product managers are familiar with the customers’ needs. Their insight will be more valuable than that of a leader, who may lack visibility.
Examples of the companies where this approach is used are Zoom, Sony, and the New York Times.
Now let’s see what are the strengths and limitations of this approach:
As we can see, neither of the two management approaches we’ve just described is perfect. At the same time, it would be a mistake to say that one is better than the other. Rather, they both can be used depending on the context. Or they can be used concurrently, too, since they're not mutually exclusive.
Let’s discuss some factors which will determine the choice of the management approach for your organization:
If you’re a leader of a growing company, start with the bottom-up management model. It will let your team members explore the area and brainstorm ideas. A small amount of people working together makes it possible to take into consideration the thoughts of everyone involved, without the risk of getting buried under lots of opinions, sometimes conflicting.
At the dawn of your company’s existence, it’s important to let the ideas flow. This cannot be achieved if team members have to follow the guidance imposed above.
In large organizations consisting of many levels and multiple teams, the top-down management approach should be considered. This will help you save time – trying to hear the opinions of hundreds, or even thousands of employees every time you need to make a decision will take forever and won't be productive.
However, this tactic – the bottom-up approach for smaller companies, and the top-down approach for larger ones – is not the golden rule. Size alone should not be the only factor governing your choice. There are other things to take into account.
There is such a concept as organizational maturity – a measure of quality that reflects the company’s ability to face challenges. Most models include five stages of organizational maturity, which are closely connected to stages of team development. Let’s describe these stages and see how they correlate with the choice of management style:
Stage 1 – Informal. At this stage, processes are uncoordinated, and the results depend on particular individuals rather than processes.
Stage 2 – Defined. Processes are better planned, and expectations are determined.
Stage 3 – Integrated. Processes get standardized and documented. Team members commit to the organizational vision and goals.
Stage 4 – Strategic. Processes are consistent. No miscommunication.
Stage 5 – Optimized. Daily operations are efficient, making innovation possible.
The first two stages are marked by chaos, while the rest – by coordination. Logically, less mature companies may need stronger leadership, while more mature ones – more autonomy.
By structure we mean the network of departments and teams. While some departments can be more productive working under the guidance of a leader, others can benefit from the bottom-up approach.
Think about how many people report to each manager. When one manager is in charge of too many people, the top-down approach will be more suitable.
Management style is directly connected to the company culture. Cultures where safety is one of the company values, where team members are not afraid to be vulnerable, and where the purpose is emphasized, are empowering. Here people are welcome to express themselves and bring their best to work. These are cultures, perfectly fit for the bottom-up approach.
Conversely, cultures that do not encourage freedom of thought will be associated with the top-down approach.
Besides the factors mentioned in the previous section, there are other things that will signal that you should use a certain approach, even if you typically stick to another one.
Let’s see what circumstances will require you to use each of the two management styles.
When deadlines are daunting, or in a state of emergency, you cannot afford time-consuming debates. Sometimes you need to make a decision fast and act. No time to hesitate.
When the person in charge has undoubtful expertise, higher than the expertise of the rest of the team, autocratic leadership will come in handy. For example, if a person has been in the business for decades, he knows the craft and can be trusted.
This is especially true for regulated industries where standards must be met.
If you need your team members to come up with fresh ideas, let them talk. Diversity of individual perspectives can provide you with abundant material.
High-performance standards and unattainable goals can put a lot of pressure on employees. This may create a hostile competitive environment, where people focus on protecting themselves and keeping their status. In this case, the bottom-up approach can help relieve pressure, as it emphasizes the value of each and every worker.
This is a clear sign of the deep gap between the leader and the customers. Team members who directly communicate with customers may provide important feedback concerning current customers’ needs and demands.
Choosing the management approach for your company can be tricky. To make the right choice, start with the current situation analysis. It may appear you’re on the right track and don’t need to change anything. It may also appear you just need to incorporate some elements of other management styles for some balance. Being observant and flexible, you will respond to challenges on time.
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