Top-down and bottom-up innovation

In majority part of organizations, innovation usually comes from the top-down or from the bottom-up.

(Figure 8: Top-down and bottom-up innovation)

Top-down innovation (TDI) has the advantage that the people in power set the pace - they set the targets and the objectives and provide the funding. The implementation is left to the appropriate personnel.

Those working on the project do not have to beg for funding. This approach takes the form of a directive, such as:

  • We will explore that new market.
  • We will eliminate some segment of our current product line.
  • We will compete in some new market segment with a new product.
  • We will invest in this new technology for the future.
  • We will make an investment in automated manufacturing.1

Such directives leave no doubt as to where the firm will find its future. The only limits of top-down innovation are the people resources.

Example of top-down innovation:2

In 1982 Canon began reconceptualising the plain-paper copier business and investigated the opportunities for lightweight compact copiers. Management knew that the new copier would not come into being by minor improvements in component and assembly designs. It would need a thorough analysis of the market to establish the required features, advantages and benefits. Canon approached the opportunity with a high-level project team. The team included:

  • Project manager - the director of the Reprographic Products Development Center (RPDC);
  • Advisor to the project-managing director of the RPDC;
  • Director of the corporate technical planning and operations center;
  • Representatives from quality control, finance, and marketing;
  • Task force to examine the colour copying issues.

Bottom-up innovation (BUI) is innovation originating someplace in the bowels of the firm. Everyone is welcome to participate in bottom-up innovation. BUI provides the greatest challenges to innovators - those people who think differently, who ask many questions, who have many interests, who are dissatisfied without change, who are considered arrogant, who bring a different perspective, who ask ''why not'' more often than ''why,'' who create problems for first level managers, but who are the lifeblood and future of the firm. These are the people who come up with ideas and are willing to go through the laborious process of first convincing themselves3 and then convincing several levels of management of the value of those ideas.4

Example of bottom-up innovation:5

3M is a good example of bottom-up innovation. 3M now operates in 63 countries and promotes entrepreneurial spirit worldwide. 3M is a leader in coated and no woven abrasives, tapes of unimaginable compositions, transportation and personal safety, medical, pharmaceutical, and health care information systems, a leading supplier of connecting, insulating, and protective products for the electronic related industries, Post-it Notes and many other related products.

Innovation is part of the company's culture that has been fostered for more than seventy-five years. That culture, while providing freedom of action and opportunities for exploring new ideas, was guided by operational and financial discipline. The history of some of the products that now represent its major divisions includes mild threats of termination from management if the person championing the product did not cease spending time on it. That history also reveals that those threatened individuals continued to pursue their efforts in some form in spite of management's objections.

1 Gerard H.(Gus) Gaynor (2002). Innovation by Design: What It Takes to Keep Your Company on the Cutting Edge, p. 48
2 Ibid, p. 48, 49
3 Please see components 4.6 and 10.2 of this guide for details
4 Gerard H.(Gus) Gaynor (2002). Innovation by Design: What It Takes to Keep Your Company on the Cutting Edge, p. 51
5 Ibid, p. 52, 53