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Top-down vs. Bottom-up Strategy

2010 July 11

Who should drive strategy?  The dreamers with the big ideas or the people on the ground?

This is an ancient debate that is still raging and can inflame passions on both sides.  Those on the ground feel that the dreamers miss the practicalities of everyday operations while those in the C-suite lament that implementational people fail to see the big picture.

In truth, the major issues have been settled for decades and it’s a wonder why there is still so much fuss about it.

The Ancient Debate

The dispute goes at least as far back as Plato and Aristotle.  Plato was definitely a big picture guy.  He believed that we should do our best to approximate ideal forms.  Moreover, as he made clear in is allegory of the cave, he was suspicious of supposed knowledge gained from everyday experiences.

His star pupil, Aristotle, took a different view.  He believed that it was best to work up from basic facts and observations to general principles.  Furthermore, he practiced what he preached.  Many regard Aristotle to be the first real scientist and he catalogued and astounding amount of his observations about the natural world.

Up till about a century ago, you could argue that Aristotle won the argument.  Although during the Middle Ages, the Platonic dominated Church held sway, axiomatic systems such as Aristotle’s logic and Euclid’s geometry endured up until the late 19th century.

From Rational to Empirical

In the late Renaissance, the French thinker Rene Descartes set out to create a new body of knowledge that would be independent of experience and therefore certain.  He made a big step in the right direction when he proclaimed, “I think, therefore I am,” proving that such a feat was possible.  Unfortunately, that was the last real achievement of Rationalism.  It ended there.

The Scottish Enlightenment was more practical.  Men like John Locke and Adam Smith framed the political and economic principles, respectively, of the modern western world.  The greatest of them all, however, was David Hume who held that we can only know what we experience.

Unfortunately, this also led to a radical skepticism.  Hume proclaimed that we only believe that the sun will rise tomorrow as a matter of convenience and expediency.  In Hume’s view we’re just stuck. Although, being the fat and jolly sort (think of a philosophical John Candy) he didn’t mind much, he felt we should just accept that the world is often not what it seems.

Hume’s ideas ushered in the scientific age.  The 19th century saw astounding progress in engineering and science.  The steam engine spurred the industrial revolution, while Darwin and Maxwell led similar revolutions in biology and physics, which led to the discovery of genetics, relativity and quantum mechanics.

Logic Returns

As the 20th century began, it became clear that scientists were beginning to answer many of the questions philosophers had pondered for millennia.  They did so not by building up from long accepted principles but through imagining how the world might work differently than previously thought.

The axiomatic method of the Aristotelians was in danger of becoming extinct or, at best, irrelevant.   However, there were those who would not let it go.  Men like Bertrand RussellDavid Hilbert and Ludwig Wittgenstein rebuilt logic on new foundations.  It was the first real attempt to do so since Aristotle created the field.

There were some real achievements.  The father of the modern computer, John von Neumann, was a student of Hilbert’s and much of modern programming theory rests on the logical advances early in the 20th century.  Nevertheless, this effort to0 would ultimately fail.

Trouble of Both Fronts

The 1930’s brought trouble to both camps.  Einstein, who was perhaps the best example of the Platonic method (and who considered Hume one of his most important influences), was so blinded by his own vision that he missed one of the most profound developments in his field.

Although evidence was mounting for quantum mechanics, he refused to believe it (although its origins lay in Einstein’s own 1905 paper).  Younger men such as Bohr and Heisenberg led the way while Einstein’s career as a serious scientist was effectively ended.  Even a man of his enormous imagination failed to see the next curve in the road.

Logic fared no better.  In fact, it was done in by one of its own – the logician Kurt Gödel.  In 1931 he published his famous incompleteness theorems, which proved that any complete logical system must contradict itself.  In other words, every system crashes no matter what principles it’s based on.  Logical certainty was dead.

Strategic Synthesis

Quite frankly, as the basic questions have been answered for almost 80 years, I’m surprised that any confusion remains about what was a silly debate to begin with.  Both methods, when used exclusively, lead to disaster.  As I’ve written before, synthesizing approaches is clearly the best way to solve problems.

Nevertheless, egotistic CEO’s such as Jeff Skilling and Bernie Ebbers continue to ride their visions off a cliff while countless others die a less spectacular death by getting so mired in the details that they miss the big picture.  One would hope that those who are responsible for thousands and get paid millions can walk and chew gum at the same time.

The answer to the most basic strategic question is clear:  Follow your dreams, but check your facts.

-          Greg

6 Responses leave one →
  1. Dick Laurie permalink
    July 13, 2010

    G’Day Greg,

    Your post makes for interesting reading mate. The ancient aspect of this debate was particularly enjoyable.

    I can’t help but wonder if it will ever be fully resolved though. As organisations have evolved so their needs and operational requirements have altered. The continual rise of the multinationals, particularly those in the manufacturing space, and their continual quest for more/bigger/better has fuelled this debate further.

    In the recent past, I suspect P&G might have pushed the debate more openly with the change to a more centralised leadership position of GBUs and MDOs. Unilever have somewhat emulated this with Brand Developers and Brand Builders and am sure there are many more examples.

    I guess my question to put out there would be is anyone really doing it well? Many have and continue to try, but are there leading examples out there among the 100s of thousands of businesses that we could learn from?

    Cheers
    Dick

    [Reply]

    Greg Reply:

    Dick,

    Welcome back. Good to see you again.

    You make a good point. I don’t think it is a question that should be answered. The whole point of the exercise is to decide a priori which information your going to ignore and that’s a judgment that needs to be made on a case by case basis.

    One of the great things about the new science of social networks (not to be confused with the new bullshit of social media) is that influence can be tracked in network studies. Inevitably, the result of these studies is always surprising (i.e. some anonymous middle manager ends up being the go to guy for answers, lots of info gets passed on by smokers, etc.)

    - Greg

    [Reply]

  2. July 13, 2010

    Dammit Greg!! How many times are going to make me say “Amen” . . . (lol). This post plus your reference to one of your earlier posts ‘synthesizing approaches is clearly the best way to solve problems’, reminded me of Hegel and his idea of – Thesis, Antithesis and Synthesis (which is loosely credited to him). Not quite the erudite in philosophy as you are ;-) but I am student of the field and often (as you have done so excellently here) like to play the game of merging ‘disparate’ areas to explore marketing and strategy. As always love the way you often synthesize philosophy, theory and business. It provides great perspective and interesting insight. Love your work my friend.

    [Reply]

    Greg Reply:

    Thanks Rasul

    btw. I was checking out some of the videos on your site. Pretty cool!

    - Greg

    [Reply]

  3. December 6, 2010

    Greg,

    I truly love your blog. They way you fearlessly bring ideas together is amazing. I find myself critiquing your work only because I want it to be “more right”.

    What Goedel proved was that in any logical system there are statements concerning the objects in the system that cannot be proved from any set of postulates. For example, in plane geometry there is a postulate something like “if two lines in a plane are perpendicular to a third line in the plane, the first two lines do not intersect” (parallel lines never meet). It is not obvious why this has to be an assumption, but it cannot be proved from other Euclidian postulates (Riemann tried and discover a whole new geometry). The KG conclusion was that no logical system based on a finite list of assumptions can be complete.
    The self-contradictory proof was known long before KG.

    The hardest thing I ever did was to wrap my brain around the notion that light was both a wave and a particle. If you look at it like a wave, it acts like a wave. If you look at it like a particle, it acts like a particle. Once I felt comfortable with !Both! in Physics, grasping that ideas like Top2Bottom and Bottom2Top somehow being both correct or best or true was simple. My practical criteria for perspective selection is “is it useful?”.
    Hal Stull´s last blog post ..EA Analytics

    [Reply]

    Greg Reply:

    Interesting. Thanks for your input (and the high praise)

    - Greg

    [Reply]

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