top-down management
Management & Mindset

"Because I said so": Why Top-Down Management Doesn’t Work

I was raised by my parents to question authority and follow my natural curiosity about the world. 

This mindset served me well in my philosophy studies and my experience in both the corporate and startup worlds and has fundamentally shaped my worldview.

Now, as a leader, I’m always looking for better ways to motivate my team to question authority and find things out for themselves. I think everyone should have the right to ask questions and get an answer - whether it’s one they’d like to hear or not.

That’s why I hate top-down management. 

It kills curiosity and ownership. It’s outdated. Most importantly, it doesn’t work.

In this blog post, I’ll explain why, and what we do instead at 360Learning.

My experience with top-down management 

I’ve experienced top-down management firsthand at corporate banks. I know how much I hated it, and how much better things can be. On top of growing my own company, I’ve had a front-row seat for the stories of fellow founders and CEOs. I’ve seen what worked and what didn’t.

I’m not here just to advocate my way of management. Instead, I want to share a framework to help other founders and leaders let go of control, trust their employees, and have more fun doing what they love. 

The first step in this process is to understand why top-down management simply doesn’t work.

Why top-down management doesn’t work

The world is still attached to top-down management, where there’s a handful of people at the top, and a whole company resting on their shoulders. 

Old habits die hard, and the idea of having a small group of executives dictate direction for the whole company just won’t go away.

This management culture doesn’t just put an incredible amount of strain and pressure on managers and senior executives - it also stifles individual talent and curiosity throughout the rest of the business. 

That’s because everyone has a natural thirst for understanding the world in their own terms. 

1. “Because I said so” isn’t an effective way to motivate and align teams

When we’re kids, we love asking “why?” This is human nature. 

We hate being told what to do (or think) without understanding the reasons behind it. 

We all know how unsatisfying it feels to have our “why” questions ignored, and be told, “because I said so.” 

We hated it when our parents said that then. And we hate it when our boss says that now.

Unfortunately, this “because I said so” management style is common in top-down companies. 

It shuts down curiosity, reinforces existing conventional wisdom, and limits people from applying their knowledge and experience to improving the status quo.

“Because I said so” isn’t an effective way to motivate and align teams.

2. Top-down management stifles talent and curiosity

Being a leader doesn’t mean making all the decisions. 

At least to me, a leader is someone who leads and empowers the team to make the right decisions. And your team can’t get better at something they are never allowed to do. 

Managing people from the top-down fails to nurture these decision-making skills. It turns people into simple executors of instructions, without growing them into the leaders they could be

This is bad for employees, but it’s even worse for managers. Instead of having a motivated and curious team helping them out, they have to be superheroes, providing answers and advice on every topic.

A successfully led company is one where you can be off in the Bahamas and your team is still able to keep the ship cruising and not crashing into icebergs in panic, waiting to be saved.

3. Pyramid-shaped businesses are static and brittle

Leading from the top-down makes a company a lot less resilient. Depending too much on the individuals at the very top makes it harder to respond to changes in the market. Decision-making is slow, and it doesn’t scale well. 

In a pyramid-shaped company, if something goes wrong with the few at the top, everything can come tumbling down.

Top-down companies are also static. They stick to the status quo above all else, and don’t adapt well. Any faulty or outdated thinking at the executive level can affect the entire company.

That’s why we’ve developed a solution to sidestep these limitations: a combination of low authority and high accountability. We call this Convexity.

In a pyramid-shaped company, if something goes wrong with the few at the top, everything can come tumbling down.

What we do instead: low authority, high accountability

At 360Learning, we’ve developed an alternative to top-down management: our Convexity culture

Convexity is about combining low authority and high accountability. 

People don’t need to ask permission to make decisions, but they do need to stay accountable for the results.

To make this work, we eliminate information asymmetries as much as possible, making sure everyone can access useful information. 

Everybody has scopes that are mutually exclusive and collectively exhaustive, meaning there are no overlaps between roles. 

Instead of relying on a few people to make decisions at the top, we train every one of our teams in logical and critical thinking. And we distribute ownership so everyone can practice these skills on a daily basis.

This aligns with what we stand for as a company, democratizing corporate learning from top-down to bottom-up.

To make this distributed leadership work, we need transparency, iterations, and performance.

How we got rid of top-down management

Getting rid of top-down management doesn’t mean everybody doing whatever they want or having a say in every single decision. 

In fact, it’s the opposite: there should always be a clear decision-maker who owns the decision. And it needs to be clear to everyone when their feedback is needed, and who has the final say on a matter. 

Our low-authority and high-accountability management culture focuses on:

  1. Transparency - we believe company information needs to be shared
  2. Iterations - we develop ideas quickly, and constantly test new solutions
  3. Performance - we track performance with laser-focus metrics at every level

A lot of companies say they are transparent. But few companies go as far as we do.  

In practice, this means no meetings, no private chats, and no emails. 

When we do have meetings or discussions, we make sure the outcome is summarized on Trello so everyone can see what’s going on. We also copy in the entire team on external emails.

Authority = access to information

We put these habits in place in 2014, after two years of working non-stop (including 100 days in a row during the winter of 2013-14). 

When we took time off during the summer of 2014, we realized we had a few unhappy customers. Even worse, we couldn’t find out why.

The answers were all in everyone’s emails to customers. Even worse, people were offering different explanations of problems and solutions for different managers and leaders. 

This asymmetry of access to information creates inefficiency and stops individuals from making decisions without consulting 20 other people one by one. 

So your team spends hours trying to get all the context, aligning everyone - trying to get the right information and right person to make a call. By the end of it, your team is exhausted, your client is super unhappy. Everybody loses.

That’s why we decided all business information should be shared, and forbid emails completely. 

Access to information gives people the authority to make decisions. 

Being transparent avoids politics and power games, so managers can’t say “do X, because I know Y and you don’t.” It also advocates logical thinking, as no one can make decisions without justifying it with considerations, statistics, and context that are available to everyone.

Distributing information = distributing decision-making power

Finally, by tracking and monitoring team and individual performance with clear objectives and key results (OKRs), we ensure our strategies, goals, and targets are consistent from the company level through to the personal level. 

Let everyone propose their own targets

Within the function of each team or business unit, every 360Learner knows their own scopes, and makes their own decisions on how to reach their objectives. 

In practice, this means people propose their own OKRs and decide how to achieve them. 

Our coaches are there to measure performance and offer support, and not to tell employees how to do their jobs. This is all about decentralization, and the democratization of decision-making and ownership.

I can’t stress enough, though, that this works only under the premise that everyone is aligned on the global strategy. Otherwise, you have a company with 200 people going in 200 different directions. 

As CEO, I make it my responsibility to communicate clearly and regularly on the company’s global strategy over the next 1-3 years, and make sure it stays consistent and doesn’t change every quarter.

You also need to challenge your teams on their targets, to make sure they’re aiming high and pushing the envelope.

By allowing people to propose their own targets, a sense of ownership is created, and teams are incentivized to perform, on their own accord. 

It’s similar to our philosophy for our product. 360Learning’s collaborative learning platform is built with this in mind: encouraging people to declare their own needs, answer to them,  share their know-how for the benefit of the wider company, creating greater flexibility for both the learners and the L&D leaders, and higher job satisfaction for everyone. 

Our management culture in practice during Covid-19

So far I’ve shared a lot of theories. Let’s look at something more concrete.

Since the beginning of the crisis, I’ve got a lot of questions from the team about how our business might be affected. Whether people will get fired. When we can restart the hiring of the many positions we wanted to fill.

So at our last all-hands meeting, I decided to share the specifics of our cash-flow runway calculations with everyone.

Instead of telling my team “no, you can’t restart the hiring process of your 15 opened positions” or “you need to reach your quarter sale target or you’re fired,” I gave a breakdown on how the math works. 

I explained that we have €15.3millon of cash now, and we burn €1million per month. This means, today, we have 15 months of runway. 

If we book €5million ARR, and hire 15 people, adding €1.5m / year in costs, we’ll have €15.3 + €5million - €12million - €1.5m of runway. 

In 12 months,

  • we’ll have burnt €12m - 5m€ + 1.5m€ = 8.5m€
  • we’ll have €15.3m - €8.5m = €6.8m in cash
  • we’ll be burning (€12m - 5m€ + 1.5m€)/12 = 700k€ per month
  • we’ll have 9 months of runway (21 months from today)

runway math

Basically, I showed them our real numbers and explained how the board makes calculations and projections based on these numbers. 

This shows how their individual performance - closing a deal or not, hiring a new person or not, getting a client to pay on time or not - affects the financial health of the company and the big picture. 

I wanted to make sure they had the information they needed to understand the situation.

So that when we cut budgets and freeze hiring or raise sales targets, they understand why. 

By being transparent, I hope to create an environment where everyone feels committed to our common goals, and where each individual knows how crucial they are in creating a positive response to the current challenges. 

Why most bottom-up models fail

When it comes to bottom-up management, I’ve seen the same handful of objections hold companies back from an attempt to change.

One of these objections concerns teamplay. Some businesses consider our practice of everybody determining their own scope to be exclusionary, as it incentivizes individuals to work on their own to identify and solve problems, rather than coming together as a team.

This isn’t the case at all. In fact, by empowering everyone in the business to own a different piece of the puzzle, and to be transparent about their performance, we encourage more effective team play. 

In traditional team-based collaboration, managers take primary responsibility for deciding who does what. Inevitably, this leads to an unequal allocation of work between individuals and makes it impossible to attribute credit to where it's due (and to weed out free-riders). 

Another objection is about exposure. Some people think a bottom-up model involves too much transparency, and leaves people feeling like they have too many eyes on them.

We think this incentivizes people to do their best work, and to ask for and expect feedback and input from others. But high transparency isn’t for everyone. You need people who share the mindset.

Related: How We Use Peer Learning to Keep Our Company’s Competitive Edge

Power to the people

Building a strong culture not only makes it easier to attract the best talent but helps us boost performance and growth. 

If you have brilliant and self-motivated individuals, you don’t have to micro-manage, and your team can focus on delivering great work. You’ll also be able to respond to changes in the market more quickly. 

I’d love to hear your thoughts on your experience building your company culture and management strategy. Share your views in a comment below.