July 2007

Reading James Governor’s post Give Every Developer a $5k Outsourcing Budget written in response to Top-Down Vs. Bottom-Up from Bex Huff Started me thinking again about top-down against bottom-up although not in direct connection to the main theme of the posts but rather in reference to a conversation I had with someone. I think I may return to the main theme of the these posts but that will come later when I have had a longer think about what it actually means.

With bottom-up practice you simply let the people who actually know get on with the job because, right, who actually knows better than the people who actually know! Bottom up practice is not and never has been and never will be an excuse for dereliction of management duty - it just redefines what management duty should be. It turns from pointing a sharp, pointed and bloody stick at people and shouting loudly whilst feigning competence toward putting in place frameworks, conversations, knowledge and maps so that the people you want to do the work do actually know and (based on this knowing) are empowered to execute.

This is more prevalent or important in larger organisations where the organisation is partitioned into areas of similar knowledge or function. Where, indeed, it may not be possible to know everything you need to know. It may be impossible (or at least extremely expensive) to know every effect of every action one takes.

A butterfly flaps its wings in marketing and a hurricane blows apart production.

You can also take a horse to water but you you can’t make it drink. I am not sure what a top-down approach to this problem would be but a bottom-up approach would surely create the environment where the horse itself wants to drink. Actually, a pure top-down approach would be to bring in a group of highly-paid consultants who after six months and several million pounds would present you with the information that 40% of camels taken to a bar choose cheese & onion crisps.

Back to the conversation I mentioned earlier. This person mentioned that actions of one set of people in one part of the company made it difficult for others to do their job efficiently and was effecting the consumer of the product in a negative way. These people (who were making it difficult) were doing their job as best they could within the frameworks they had been given. Essentially, this is not bad behaviour in any way - they are paid to produce X and they do it very well making money for the company. If they produced X in a slightly different way (with more work for them) they would still be performing their job in exactly the way they have been told, be paid exactly the same way but the company would win because costs in another (disconnected) part of the organisation would decrease and the consumer would receive a more efficient service.

Okay - a top-down approach to solving this problem would be to change the job description of these guys (putting overhead on their business). Seems reasonable? But what will happen is that as the guys are not being compensated for this overhead their job description will only be loosely adhered to - or in other words, adhered to just enough to stop trouble happening. Rather like a small child who is told to go to bed will walk to their room just quickly enough so they don’t get told off but slowly enough to make the point that they will not be told. You know this is true.

One bottom-up approach would be to price the costs that the company and consumer bears into the fully-loaded cost of X. So rather than being compensated on the intrinsic value of X in isolation one is compensated based on the fully-loaded end-to-end value. This makes our group of people aware of the downstream cost of their actions through the price they are paid for each action. Believe me, behaviour would change overnight. As long as you get the price right and the price fluctuates positively with better behaviour and better behaviour is better for the consumers and for the organisation.

So we are not telling these guys to drink - we are making so that the act of drinking becomes inevitable.

Reading this through it may be interpreted as some Machiavellian approach based on evil and underhand manipulation of people - but I don’t think so. What we do here is price or compensate work done according to its value to the consumer or organisation in a fully-loaded, end-to-end manner. We look at the organisation as an holistic entity where every bit effects every other bit and in every thing we do contributes to the happiness of the consumer and therefore to the benefit of the organisation. And we pay people based on that.