What’s the top-down management style? Why is this management practice considered outdated?
In The Age of Agile, Stephen Denning discusses the traditional business practice of top-down bureaucratic management. This long-standing practice consolidates decision-making in a few hands through a strict hierarchy of authority.
Continue reading to learn the two reasons why top-down management has become obsolete.
Why It Doesn’t Work Anymore #1: High Level of Complication
While a top-down management style may have the advantage of clarifying roles and responsibilities, Denning argues that it no longer works in the modern business landscape. Denning argues that as software and other new technologies have reshaped the business world, the work of creating value for customers has become much more complicated. Many digital products and services rely on intricate components working together interdependently. This creates challenges for traditional management, because a single top-down manager may have only a limited understanding of what their team is trying to build.
(Shortform note: In arguing that value production has become more complex, Denning is specifically focusing his analysis on the technology sector. Agile management began in software development and is typically suited for industries that need to rapidly innovate. However, it’s worth noting that not all industries need rapid innovation—even if they adopt new technologies. Agriculture and education, for example, still follow certain basic methods of producing and distributing value for their customers, and advancements in technology don’t typically overhaul these industries as dramatically or as often as they do the software industry.)
Why It Doesn’t Work Anymore #2: A Need for Quick Adaptability
Denning contends that top-down bureaucratic management makes companies slower to react to changes and adapt to new practices. Because every idea needs to work its way up the decision-making ladder to be ratified, companies with this management style become inflexible. Since modern businesses must be flexible to survive, the unwieldy nature of this management style makes it difficult for companies to keep up.
(Shortform note: Some business experts argue that in a large enough organization, some degree of bureaucracy is inevitable, as people will form rules to standardize conduct and procedures. However, there are steps you can take to reduce how much bureaucracy impedes progress. For example, some experts recommend taking some time to clarify your goals and identify the most important work that needs to get done. Then, re-examine your routine processes and eliminate unnecessary work. Finally, speed up your decision-making processes by delegating the least important decisions and setting clear decision-making guidelines.)
