Managing people is a company's responsibility. Every organization employs a management style, whether it's intentional or not. There are top-down, bottom-up, transactional, and laissez-faire management styles, to name a few. The company's management style guides decision-making, project management, and company initiatives.
Proactive companies choose and facilitate a management style that best serves their needs and the goals they're trying to achieve. In the past, companies automatically opted for a top-down management style.
In today's modern workplace, top-down management may not be the most viable option for your company. Let's look at top-down management, some of its negative effects, and other management styles that may be more effective and conducive to your company's vision.
How does the top-down approach work?
Just like the name says, the top-down management leadership style is when the highest leadership in the company makes most of the business decisions. Once the senior-most leaders make the decisions, they communicate them to middle management, who share them with the lower-level teams until the decision reaches everyone in the company.
Top-down management is autocratic leadership. The broad concept is that upper management has dictatorial power to make decisions with little input from other stakeholders in the company. Modern companies interested in maintaining positive company culture, an engaged workforce, and empowered team members find the top-down management style too inflexible and rigid to be a viable option. Other, more inclusive, agile management styles are increasing in popularity every year.
5 reasons to avoid top-down management
Top-down management arguably offers benefits like consistency from one decision to another and creating clear goals that are important to the big picture. However, there are several ways it fails in the common workplace. A top-down approach may miss issues and problems that are only visible at a lower level. Its rigidness stifles creativity. This hierarchal approach may cause a negative "us vs. them" mentality between upper management and everyone else. In addition, it can lead to disengaged employees because they don't relate to or have a stake in the decisions or even understand why decisions were made. These are all valid reasons to forgo top-down management in favor of more effective management strategies.
In contrast to a top-down approach, a bottom-up management style offers compelling elements that create a more effective workplace. Here are five reasons why your organization should avoid a top-down management approach to running your business.
1. Top-down management leaves employees feeling micromanaged
Nobody wants a micromanaging boss. Being involved in decisions is empowering, both in our personal and professional lives. Team members who feel like the company dictates all the decisions often also feel like they have no say in project planning or anything else. In their minds, they must do what they're told without question. While a clearly laid out process may seem like an efficient idea on the surface, a team member may view this as the majority of their job being out of their control.
There can be big fallout from team members feeling micromanaged, including them getting so frustrated that they find other jobs and quit. Turnover is one of the worst consequences of a top-down management style.
2. Top-down management kills idea generation
Creativity is the bread and butter of many companies' success. According to World Economic Forum, creativity is one of the top 10 skills you need to thrive. However, creative thinking is not fostered in top-down management culture. A strict top-down management style organization keeps the decision-making process in the hands of the few. Since lower-level team members aren't involved, the company can miss out on their ideas.
This causes serious issues over time, especially if leadership is happy operating in a silo and doesn't openly communicate and collaborate with team members below them. A lack of new ideas can cause a company to grow stale, lose its competitive edge, and become less innovative and profitable.
3) Top-down management hinders team members' growth
In this working environment, if you're not on the management team, you're pretty much out in the cold regarding decision-making. Top-down management stifles talent and curiosity. It can lead to team members thinking, "my opinion doesn't matter anyway, so why should I care?" Because of this management style, team members with lots of potential may wither on the vine.
Team members who feel like there are no opportunities to contribute to the company's goals can lose their motivation and become disengaged. They may become disenchanted with their jobs and start just going through the motions. Entire teams may feel the effects. It can even cause team members to leave for more challenging positions where they can feel like their efforts are helping move the needle. A 2021 survey by Pew Research Group revealed 63% of people who had left their jobs cited "no opportunities for advancement" as a top reason.
4. Top-down management ruins employee engagement
Engaged team members feel connected to their jobs, are loyal, optimistic, team-oriented, solutions-focused, and willing to go above and beyond. With a top-down management approach, team members have less connection to their positions because they have little ownership of them. This approach also discourages members from focusing on solutions, as the desired outcome was dictated to them and they have little buy-in.
Unless companies that employ top-down management make concerted efforts to keep team members interested and engaged in their roles, they will constantly struggle with disconnected employees who simply follow orders without thinking about how the results affect the company.
5. Top-down management creates toxic succession planning
Top-down management may create a toxic succession planning situation for team members. Think of it this way: If only the highest-level managers function as the decision-makers for the entire organization, middle-management and lower-level employees merely follow along with little say. Team members beyond upper management never get a chance to become solutions-oriented individuals who can weigh the pros and cons of each decision and choose the best path that fits the company's direction. As time progresses, there will be a void of experienced decision-makers familiar with the company's goals.
A lack of experienced team members to succeed the current management team can jeopardize the future of your entire organization.
How your company can move away from a top-down management style
Your company may have used a top-down management style for years, or you may be a startup that wants to avoid the approach. Empowering your employees to share their ideas, own their positions, and be involved in the company's overall goals will create engaged team members and a positive company culture of loyalty and inclusivity.
Strategically visualizing the type of management approach you want to use is wise. If you've decided your company wants lower-level team members to have a stake in goal setting and other business decisions, there are several ways to layout your management style to include them.
Alternatives to a top-down management style
There are 22 types of leadership styles. Shifting company priorities, more millennial and remote employees, and a more competitive job market are all reasons to divorce the top-down management style. Be prepared for your team members to respond differently to a changing management style. You'll need to proactively address pushback and other obstacles to make them see the benefits of the shift. Company leadership doesn't have to give up all its control at once, but can slowly evolve into an alternative management style that better fits your company's direction.
Let’s dive into three popular alternatives: the bottom-up approach, the laissez-faire approach, and the transactional approach.
Bottom-up management approach
A bottom-up approach to management involves team members from all levels acting as decision-makers and driving company goals. Bottom-up management is less formal and more flexible than a traditional top-down style.
Leaders still have key roles in establishing and driving the company's directions. Still, they are open to lower-level team members sharing their unique perspectives and ideas to achieve the goals.
A bottom-up management style uses team members who are "in the trenches" with specific initiatives to give input and suggestions. Instead of a broad understanding, these team members have real-life, granular perspectives to draw from.
When team members across all levels have a say in decision-making, it creates more ownership, allows creativity to flow, and forges more informed decisions.
Laissez-faire management style
This leadership type is built on leadership trusting employees to perform their jobs and own their roles. They give team members a wide scope to make their own decisions and create their own routes to success. Laissez-faire leaders don't micromanage or expect their team members to follow step-by-step processes. While they offer guidance and provide many tools and resources to foster efficiency, leaders leave the heavy lifting portion of projects to their teams. A laissez-faire leadership style increases accountability, creativity, and forges a relaxed company culture.
Transactional management style
This management approach focuses on using rewards and punishments to motivate team members. Also called a managerial style, this approach focuses on the premise that a clear chain of command makes team members perform best. When team members perform well, they're rewarded. When they perform poorly, they're punished.
The relationship between the manager and team member can be loosely described by the old saying, "you scratch my back, and I'll scratch yours." Leadership is responsible for setting clear expectations, giving helpful feedback, looking at the metrics to decide whether a team member succeeded or failed, and doling out the appropriate reward or punishment. This management style is most effective when the objectives are simple, and creativity isn't required or highly valued.
From check-ins to meetings, managing teams is better with Range
While top-down management is still the most widely accepted and used management style, there are valid reasons to avoid it. It can zap creativity, decrease employee engagement, and cause the company to make ill-informed decisions.
Choosing another management style takes significant thought about the team members and the company goals. There are at least three other management approaches that may serve your company better in the long run.
No matter the management approach you use, it's essential to empower your company with helpful resources that facilitate communication and efficiency.
Range is a team communication and management tool to help on-site, hybrid, and remote teams check in, collaborate, and work together to reach company goals.
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