Top-down vs. Bottom-up Innovation. A Battle For Resources.

Top-down vs. Bottom-up Innovation. A Battle For Resources.

Buried in the basementThe other day I ventured down to the basement of my apartment building in Manhattan. Early for a scheduled meeting with our carpenter, I wandered away from the standard corridors, into a warren of small rooms and storage areas. I discovered workshops, break rooms, and archives not recorded on our floor plans, and unknown to me.

Functional areas, evidently emerging from need, efficiency, innovation, and comfort, had been developed, “on the sly,” by the building staff – occasionally in violation of by-laws and policies. None appeared hazardous. I was more curious than concerned. Subsequent conversation revealed a fascinating subterranean culture of innovation and problem-solving.

Bottom-up Innovation will Proliferate whether Nurtured or Forbidden

This unstructured, unguided, process is usually disruptive, rarely efficient and hard to quantify. It can also create useful innovations. What is the best-practice?

Bottom-up Innovation is a Double-Edged Sword

Leadership is traditionally reduced to two opposing models: either top-down, with vision and innovation driven down through chains of command, or bottom-up where leaders are facilitators. Each approach has passionate advocates and critics.

Are These Models Mutually Exclusive?

It is a precarious balance. And, there are other mitigating factors.

Linear strategies, adopted most often by successful incumbent companies, are focused on efficiency and optimization and use a "deliberate" path to innovation. These strategies are usually top-down and unambiguous.

Startup culture favors nonlinear strategies, which identify and exploit "emergent" innovations, and are often bottom-up and flexible.

The challenge is that deliberate innovation and emergent innovation fight for the same, limited, resources of cash, talent, technology and facilities.

The opportunity is to create a culture that can optimize deliberate innovation and concurrently identify, test and develop emergent innovation.

This bifurcation is a structural and cultural challenge.

Startups, to paraphrase Reid Hoffman, "throw themselves over the cliff and build the plane on the way down." For incumbents, the larger you are the harder you fall. 

It’s often said that incumbents fail to identify disruptive nonlinear innovations due to ignorance or ego. This is incorrect.

The problem is that nonlinear innovation does not work for current customers, it disrupts legacy processes, devours resources and is usually highly inefficient. It is the exact opposite of what successful market leaders want for their companies. And, it is completely counter to deeply-ingrained incumbent culture which rewards efficiency and stability.

Some distinct and highly-successful companies find a way to create an equilibrium between linear and nonlinear innovation. 3M, Amazon, and Alphabet (Google) excel in creating a corporate culture that effectively leverages and synchronizes both models.

On the Shelf in the Mailroom

In the mail room at our office in midtown, a new racking system was hand-crafted by entry-level associates, to improve work-flow efficiency. A good example of bottom-up, nonlinear, innovation.

"Our space is very tight. Our workload is very high. We fiddled around, mostly while on break..."

We recently rewarded these employees and communicated the system they created to all of our offices, worldwide.

Within your world of work and life, beneath your normal radar, are there sub-cultures of innovation?

Do your friends, co-workers, or associates create remarkable, surprising, or unknown processes, innovations and micro-workshops?

Does your culture forbid, encourage, identify, punish, reward, analyze, distill or communicate these innovations? Do you consider this a best-practice?

As always, please share your thoughts and examples.

(c) 2018, David J. Katz - New York City

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David J. Katz is chief marketing officer at Randa Accessories, an industry-leading multinational consumer products company, and the world's largest men's accessories business. 

His specialty is collaborating with retailers, brands and suppliers to innovate successful outcomes in evolving markets. 

David was selected by LinkedIn as a "Top Voice in 2017." He has been named a leading fashion industry "Change Agent" by Women's Wear Daily and a "Menswear Mover" by MR Magazine.

He is a public speaker, co-author of the best-selling book "Design for Response: Creative Direct Marketing That Works" [Rockport Publishers]. His words and deeds have been featured in The New York Times, The Wall Street Journal, New York Magazine, The Huffington Post, MR Magazine, and WWD.

A graduate of Tufts University and the Harvard Business School, David is is a student of neuroscience, consumer behavior and "stimulus and response." The name Pavlov rings a bell.

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  • Domenic Scavetta

    In our company, most ideas are initiated by employees to drive innovation. We could say that we use a bottom up approach.

  • Taylor Baker

    I prefer top down to be honest, where senior leaders do the rest for us. I am too busy with my work.

  • Claudia Moreira

    The mixture of both is the most convenient one to create more innovative ideas

  • Jacob Price

    I think that both modes require dedicated innovation leaders but with different characteristics

  • Steven Makinson

    Informative post, well said !!

  • Kumat Mohit

    good post, thanks for sharing

  • Gary Robertson

    Our managers empower us by providing guidance but also challenge us to focus on strategic priorities and create real value for both customers and the company.

  • Ellis Williams

    These approaches only work for startups and well established firms. Culture and lack of communication are hindering innovation in most companies.

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David J. Katz

Retail Guru

David J. Katz is a "LinkedIn Top Voice in Retail," a best-selling author, a frequent public speaker, an alchemist, and the chief marketing officer at Randa Accesories, a leading multi-national consumer products company, and the world's largest men's accessories businessHis specialty is applying insights, data, story-telling, technology and analytics to influence consumer behavior. He helps retailers, brands and suppliers create successful outcomes in evolving markets. David has "hands on" experience with P&L, M&A , Leadership Development and Digital Transformation. He has ongoing collaborations with global brands including Levi's, Polo Ralph Lauren, Dickies, Tommy Hilfiger, and Columbia Sportswear, And, he works closely with leading retailers including Macy's, Kohl's, JCPenney, Amazon, Nordstrom, Walmart, Target, Costco, Hudson's Bay, Liverpool, Debenhams, David Jones, Printemps, & El Cortes Ingles. Named a fashion industry "Change Agent" by Women's Wear Daily and a "Menswear Mover" by MR Magazine, he has been featured in The New York Times, The Wall Street Journal, New York Magazine, Business Insider, The Huffington Post, and other publications. A frequent public speaker, he is co-author of the best-selling book "Design for Response: Creative Direct Marketing That Works," and has written many articles on marketing and consumer behavior. David has been elected a "top writer on fashion and Innovation" by Medium. A graduate of Tufts University and the Harvard Business School, in neuroscience and marketing. He studies, and applies, stimulus and response. The name Pavlov rings a bell. Note: Alchemy is a science or philosophy that transforms something ordinary into something meaningful, often through mysterious means. David studies consumers, identifies "jobs to be done," adds products and brands, stirs the caldron with a bit of marketing catalyst, and via transmutation, creates... retail gold.

   

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