Org structure

What’s a Bottom-Up Organization?

By: Tim Brewer

A bottom-up organization decides its goals, projects and tasks after being informed from employee feedback.

Employees are actively invited to participate in goal setting and decision-making. They can either provide feedback on upcoming decisions, or even have some stake in the decision (such as profit share). Their feedback reaches senior leadership using communication lines set up with each team.

Sometimes known as ‘democratic management', or Theory Y, the managerial ethos behind this approach is that the employees have valuable input to share, should be consulted and are closer to customers' needs.

In a bottom-up organization, employees are always involved in decision-making, and their job is to both enact the policies and projects decided on and also provide input into future ones.

This approach is become more popular in modern times, and is the direct opposite to the more autocratic, top-down style. In top-down organizational structures, decisions are made by the top level of management which are then communicated down through the various layers of management to employees.

Bottom-Up in Theory and Practice

Recent management theory would argue that as much of the expertise in the organization is at every level, better decisions are made when everyone - or at least various experts drawn from every level - are involved.

In his seminal management book, Good to Great (2001), Jim Collins found that the best-performing companies had all "got the right people on the bus" but also "then (and only then) worked out where to drive it."

In other words, hiring the right staff is crucial, but the best organizations work out strategies together.

Motivating staff, and making them a part of decisions, can bind an organization together, rather than employees feeling like a relatively insignificant cog in a massive wheel.

In some parts of the world though, a bottom-up approach would not work. Some cultures are more respectful of seniority and do not expect to be involved in decision-making. In these countries, a top-down approach would be normal practice, and attempting a bottom-up style would be met with resistance and confusion.

However, even in more consultative, collaborative cultures, bottom-up organizational structures are not for everyone. Some employees would prefer to work in a place where they don’t have to make decisions, but can just get on with their work.

In some cases, such as in health or sudden emergencies, where speed or care is of the essence, and decisions need to be made by those in charge, top-down may best suited.

Naturally, there are various advantages and disadvantages of the bottom-up approach.

Pros and Cons of Bottom-Up

Pros

Here are some of the potential advantages of the bottom-up approach:

  • Employees can be more aligned with the company's culture, mission, and values
  • Can lead to better engagement, performance, productivity and results
  • Employees can set goals that are aligned with their own strengths
  • Employees may have insights into the day-to-day processes that leaders don’t have visibility into
  • Attract and retain better quality employees, with much to contribute

Cons

And here are some drawbacks and limitations:

  • Too much input can slow the decision-making process, reducing progress and creating disorganization
  • Employees may feel uncomfortable sharing feedback or ideas with their managers
  • Since employees don’t have access to all the data senior management have, they may not be able confident in providing feedback
  • Bottom-up will not work in some cultures where seniors are generally respected and juniors are not expected to put forward ideas

Training Managers for Effective Bottom-Up Leadership

If your organization feels it might benefit from this democratic, bottom-up approach, then there are ways to ensure the benefits result, while also alleviating some of its limitations.

Offering coaching to managers is key if they are to elicit feedback from their teams in an effective manner. Some team members will be openly forthcoming with plenty of ideas, whereas others could be silent. It takes skill and experience to ensure all the best ideas bubble to the surface, and are then processed by senior management.

Likewise, if bottom-up is to work, staff should feel safe to suggest changes, and then - crucially - they should see (at least some of ) their ideas implemented. Otherwise, they would feel it was not worth the effort.

Naturally, the realities of 21st-century management necessitate that an organization has to have some flexibility as to which approach works best, and when.

In some cases, a more bottom-up approach may be best, and in others, it could be the worst possible system. It can take a deft understanding of the situation, the options and resources required, to decide how best to manage and organize.

Functionly-icon: Let Functionly help you decide the best approach

Whatever your approach, we are here to help you. You can use Functionly to experiment with how you set up and structure your organization, and even test future scenarios - so important in these times of dramatic change.

Sign up for your free trial today, and start mapping out the best way forward for you.

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Sources

  • Top-down or bottom-up management: Which is best for your business? Sophia Lee, Torch, 6 Mar 2021
  • The Perils of Top-Down Management, S Lucas, The Balance, 25 June 2019
  • Good to Great, Jim Collins, 2001

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