Top down vs bottom up
Organizational cultures are often characterized as “top down” or “bottom up.” A top down culture is often considered more rigid, authoritarian, and old school than a bottom up culture; many companies today have embraced a bottom up culture where ideas can — at least in theory — be generated by employees at any level, and win based on their merits rather than the rank of the person proposing them.
Bottom up cultures can reasonably be considered the primary mode of operation at many modern companies, especially in technology.
However, an unconstrained bottom up culture has significant drawbacks that can be actively harmful to an organization. In this post I explore how top down and bottom up cultures can be combined to create something that is hopefully more powerful than either alone.
Here’s what I mean by “bottom up” and “top down”. I define a bottom up culture as one where the dominant mode of project initiation is through ideas of people at various levels in the company. Executives don’t provide more than very high level guidance about the work their organization does, and don’t actively initiate projects. People are free to propose or join projects that align with their interests, and can form working collaborations with people across the organizational hierarchy.
In a stereotypical top down culture, all projects are initiated by upper management, and flow downward into the organization. People get told what projects to work on and what to do.
Top down cultures as described above deservedly get a bad rap. For most tech companies, calling their culture “top down” is an insult.
Of course, very few if any companies fit the stereotype that all project ideas come from upper management. Most companies lie on a spectrum, where some are more bottom up than others.
The degree of “top down-ness” in an organization can vary based on how much investment is required to kick off a new project, and how easy it is to back out of a project once underway. When I worked at Electronic Arts, most new games needed to be explicitly “greenlit” in order to be staffed. This is because we were making expensive (so called “AAA”) games that shipped on physical disks, which required large upfront investment and corralling the efforts of large numbers of people over extended time periods. Requiring an explicit project approval step was a good filtering function in such an environment. At other companies I’ve worked at where products are delivered via the web, projects need less upfront investment, and can be planned and delivered over a few weeks or months. These environmental factors lead to the natural creation of a more bottom up culture, where ideas from many people can be turned quickly into launched projects.
Bottom up cultures are a good fit for companies that have a large number of opinionated, highly skilled people; significant ambiguity about what is possible to do from a technical and product perspective; and low-friction ways to get ideas to market. Many modern tech companies operate in such an environment, and bottom up cultures predominate. Bottom up cultures have many huge positives: they give people significant autonomy in deciding what to work on, and create intrinsically motivated employees who work on things that they are passionate about. Allowing bottom up generation of ideas also leads to the creation of rich collaborative networks across the company — usually unconstrained by the official org chart — that allow for rapid exploration of many ideas. Empowering people to explore what they are passionate about is also just the right thing to do in many cases, and leads to happier and more engaged employees.
However, bottom up cultures also have significant downsides. One of the most pernicious is the potential for a culture that disadvantages certain types of people. In a true bottom up culture, people need to sell their ideas to a number of people: to their managers, their team, and cross-team peers. This naturally favors people who communicate well, have charisma, and are able to convince others of their ideas. To some extent, this is how the world at large works; however, because a truly bottom up culture relies on informal networks so heavily, it disadvantages people who are unable or unwilling to “play the game.”
Bottom up cultures can become overly political. In a heavily bottom up culture, even the areas that people work on are not well defined — there is significant ambiguity around the “roles and responsibilities” of individuals and groups. In such a culture, it is entirely possible that two or more groups of people decide to tackle the same problem at the same time, without (or despite) knowing about each other’s existence. It is then possible for both teams to build systems for which they want to get customers (either internal or external), and jockey for the right to be the one team that works on that particular area.
At the point that such conflict happens, the usual mode of resolution is to ask the two teams to figure it out themselves, or to “escalate” to a common leader to resolve. This mode of operation has several drawbacks: the conflict leads to bad feelings and political games in order to “win”; having multiple teams do the same thing results in months (or even years) of wasted effort for both the organization and the people involved; and it leads to insecurity on the part of everyone working in an attractive area — after all, there’s really nothing stopping someone else from building something in the same area, and striking out to get customers on their own.
Bottom up cultures can also seem intimidating and unwelcoming to new hires: when new people are dropped into an organization with a rich network of existing relationships, but where they themselves have neither those relationships nor a clear area that they are responsible for, it is hard for them to find a foothold and effect change. Good advice for new hires in such organizations is to focus less on doing and more on building relationships before proposing new ideas, but many people may find the ramp too hard to climb and may leave prematurely.
Bottom up organizations can also seem unfocused and directionless, with a bunch of people doing what they find interesting rather than in service of a greater goal. The culture favors technical people and those who can put their ideas into motion directly; it devalues people who may have better ideas, but do not have the technical ability to implement them.
Top down cultures have justifiably received a lot of criticism; in many ways, they are inconsistent with the modern nature of work. However, there are elements of top down cultures that are useful in tech companies. Divorced from their “top down” connotations, they are actually useful framing and organizational techniques that can help a naturally bottom up organization work well.
Bottom up organizations often suffer from a lack of clarity around roles and responsibilities, and clear organizational structures: people work on many different things, with no clear guidelines for what is “in scope” for them, and what is not. A top down establishing of clear organizational structure, with roles and responsibilities clearly defined, can help set the framework within which a bottom up approach can work.
This structure is also clarifying and confidence boosting for employees. Most people want to understand how their work fits into the bigger picture, and what the boundaries of their role are. With that context, they can then innovate, knowing that they have clarity both on their own areas of ownership and why their work is important.
I’ve seen a hybrid approach that combines the positive aspects of both top down and bottom up approaches work well. In order to have this approach be successful, organizational leaders need to do a few key things. The first is to create a strategy, and only update it infrequently. Once a year is reasonable: anything more frequent can result in churn and uncertainty for the people in the organization, which in turn can stifle bottom up innovation.
The second is to define clear success criteria for the organization by which the strategy will be evaluated: set a timeline, and the metrics that will indicate whether the strategy is successful or not.
It’s also important to structure the organization so that it is aligned with the strategy. This may mean creating, disbanding or merging teams such that roles and responsibilities across the organization are clear, and making sure that the areas spanned by these teams cover the problem space without gaps or significant overlap.
Once this top down process of setting strategy, metrics and structure is completed, the bottom up process can take over. Teams should be free to initiate projects within their charter, with ideas coming from anyone with the team (or even outside). Providing clear roles and responsibilities ensures that even if ideas for a project originate in various places in the organization, they will find their way to the team that owns the relevant area; this results in natural efficiencies from eliminating duplicate work and internal competition.
When I worked at Trulia, the company followed a process of periodic reviews called “slingshots” (described in detail in this blog post by Trulia’s founder, Pete Flint) that was similar to the model described here. On the Trulia Rentals team, we had a fairly broad charter (grow the business), and a lot of freedom in determining how to make that happen, with quarterly checkpoints in the form of the slingshot reviews. Projects were initiated and shaped by the people on the team, within the overarching framework set by company leadership.
Using a top down approach for setting organizational structure, and a bottom up approach for projects within that structure, can be helpful for organizations that want to enable innovation while avoiding some of the pitfalls of “true” bottom up or top down cultures.