There are two main schools of thought when it comes to organizational decision structures: bottom-up and top-down. Bottom-up is often touted as being more beneficial for employees, potentially granting them greater autonomy to solve problems, make decisions swiftly, and operate more efficiently as a unit. Top-down structures are typically praised for fostering organizational cohesion, providing clearer direction, and reducing strategic silos. While there’s ongoing debate about which approach yields superior results, in my experience, a blend of both is essential.

Over time, I’ve begun to view organizations as vectors, having both a direction and velocity. The objective of any organization is to establish a clear direction and build strong velocity towards a desired future. Since I’ve started using this lens, I’ve noticed that bottom-up organizations frequently exhibit high velocity but lack strong, unified direction. Meanwhile, top-down organizations often possess a strong direction/vision but suffer from reduced velocity due to inflated chains of command and approval processes.

My take is that organizations often gravitate towards one architecture or the other because they offer inherent solutions for specific challenges. Top-down structures are prevalent largely due to how easily they scale. By default top-down structures have control from the top, which appeals to leadership seeking to steer the organization—arguably, the preference of most leaders. Bottom-up strategies typically emerge for different reasons: either due to a misunderstanding of what “giving employees autonomy” means or a lack of clear vision from leadership. In my experience, across multiple bottom-up organizations, the latter has been the more common cause. And, from my observations, this latter scenario tends to be worse for both the organization and its employees.

The most common mistake I observe in organizations aiming to give their employees high autonomy is the removal of most of their processes and the delegation of strategic oversight to every member of the organization. This leads to employees making decisions based on their individual whims, effectively multiplying the organization’s tactical vectors by the number of employees. The larger the organization, the more damaging this becomes.

I think a good way around this is to strive for an organization where strategy comes from the top, but execution/efficiency comes from the bottom.

Leadership’s goal is to minimize the number of strategic vectors operating in parallel. When, inevitably, a new vector emerges, their responsibility becomes evaluating that direction and determining its worth. Sometimes, this means making difficult choices, such as disappointing people and shutting down that particular direction of travel. At other times, it may involve investing in that new vector to capitalize on a potential opportunity.

This balance can be challenging to achieve, and I suspect that’s why some organizations default to a bottom-up strategy. It avoids the need for anyone to be the “bad actor” who shuts down ideas. I know I haven’t enjoyed that feeling when I’ve had to do it in the past. However, I believe that’s precisely why leadership occupies leadership positions; their role is to make difficult decisions. That also doesn’t imply they should immediately dismiss every new vector that arises. They should invest time in understanding the vector’s origin before committing to a decision.

Some of the best ideas for a company can originate from the bottom up. However, the frequency of these valuable ideas increases when there’s a clear understanding of what the organization is willing to embrace and reject. When each individual is left to their own devices, they will naturally develop their own lists of “dos” and “don’ts.” If it helps, imagine each “do” as a new vector emerging and moving in its own direction, potentially straying from the overall organizational trajectory.

An effective top-down strategy with bottom-up execution/efficiency would manifest as an organization where leadership possesses a strong vision for the company’s future direction, and a clear ideal operating state in the coming years. I don’t mean coming up with a KPI like “make more money,” but rather a deep understanding of who they serve, how they serve them, the nature of their product offering, and the potential impact they aim to have on the world. Leadership should consistently reinforce these objectives. Bottom-up efficiency is then achieved by empowering the rest of the organization to focus on “the how” and, to some extent, “the what” their creating. “The why” and “the who” should originate from leadership.

Now, none of this automatically guarantees a perfect organization. There will inevitably be tension, disagreements, and strategic failings. Scaling challenges won’t magically disappear either. Larger organizations inherently become less efficient, particularly when strategic shifts are required. However, you will have significantly reduced the difficulty in ensuring alignment and still empowered employees with considerable autonomy to determine how to solve problems.