Make Lasting Changes with Top-Down and Bottom-Up Business Planning

 Top-Down and Bottom-Up-Business-Planning-Jennifer-Goldman-Consulting

I don’t care how much revenue you’re bringing in or if you are located in Florida, Seattle, Idaho, or Antarctica. All profitable businesses have one thing in common: meaningful, ongoing planning.

Business planning isn’t something you do once a year and forget about for the next 365 days. It’s an ongoing process that demands ongoing attention. Yes, I said “ongoing” twice—and for good reason.

In order to run any type of business that will stand the test of time, careful and well-thought-out planning strategies must be employed day-to-day, month-to-month, and year-to-year. There is always room for improvement.

The struggle is that most businesses don’t know where to begin.

Do I start with the long view in mind? My 10-year or 5-year plans?

Or should I focus on finding immediate solutions to my most pressing problems?

What am I sacrificing if I choose one over the other?

If you’ve ever asked yourself these questions, you are in good company.

But I’m going to let you in on a little secret that might overwhelm you at first and have you looking for the nearest exit. But, I promise this advice is for your own good.

The answer to your planning challenge isn’t in choosing one over the other, it’s in combining the two. In other words, to really make an impactful difference in a short period of time—two years or fewer—you need to focus on both at the same time.

So, let’s dive into the two different planning approaches and go over the pros and cons of each. Then, I’ll provide some real-life examples of what these look like in practice to show you how it works.

Top-Down vs. Bottom-Up Business Planning

Strategically speaking, there are two ways to approach business planning issues: one is a Top-Down (TD) approach and the other is a Bottom-Up (BU) approach. What’s unique about these strategies is that they attack the same problems, but in a complimentary way. The Top-Down strategy attacks the problem from above with what we call the 100-ft view, while the Bottom-Up attacks the problem from below with a more granular view.

Top-Down planning defines organizational goals on a high level and breaks them down into specific objectives which are addressed in phases. This approach aims to move gradually from the top levels of planning to the lower levels of a given hierarchy.

Bottom-up planning is quite the opposite. Bottom-up planning seeks solutions to immediate problems at the most detailed, granular level first before working to the higher levels of a given hierarchy.

Of course, there are unique merits to each strategy. Bottom-Up solutions tend to focus on small wins that relieve pressure immediately while Top-Down solutions focus more on the long-term goals, the impact of which will be more apparent down the road.

So, let’s review.

Top-Down: General to specific. 100-ft view focused on long-term solutions; delayed reward, in most cases. Work done to sustain.

Bottom-Up: Specific to general. Day-to-day, granular view focused on small wins that alleviate pressure immediately. Work done to maintain.

How to Employ These Two Strategies at Once 

As I mentioned in the intro, Top-Down and Bottom-Up work should be in progress at the same time—yes, even for the same set of problems. Hiring? Top-Down and Bottom-Up. Processes? Top-Down and Bottom-Up. Staffing? Top-Down and Bottom-Up. Go ahead, throw one at me. My advice will be the same.

You should always do Bottom-Up work while you’re doing Top-Down work. As you’re working both ends, they meet in the middle at some point—providing the benefits of each in the shortest amount of time. The Bottom-Up work relieves some pressure on yourself and your staff and gives you little wins that help fuel your momentum forward. The Top-Down work ensures that these pain points are resolved in the long-term and won’t come back to haunt you.

Have you ever seen how a tornado is formed? It isn’t in the air or on the ground, it’s in between the pressure system at the top and the one at the bottom. The two components meet in the middle. The two opposing forces combine to form a vortex and BAM! it’s off to the races.

Imagine doing your Top-Down and Bottom-Up work simultaneously like the formation of a tornado. With pressure applied to your problems at the top and bottom at the same time, you will be able to make the most lasting progress (and also feel the most relief as you go).

Real Life Example: Capacity Problem

Your staff is overloaded, and morale is waning because you are at capacity. You know you need to hire a new team member (or multiple team members) to alleviate that pressure. But just hiring a new staff member each time things get tough isn’t going to solve your greater problems. So, while you start recruiting to add a member to your team (Bottom-Up work), you are also mapping and reorganizing your organizational chart (Top-Down work).

Real Life Example: Clunky (or Nonexistent) Processes

You know your client experience is clunky. It’s taking a lot of time to complete things that should be handled and tucked away rather quickly. This isn’t only bad for the client, but for the staff’s productivity and the company’s profitability. You need to lean out your processes and systematize so that you can improve both. Take an onboarding experience as one example. So, you immediately go to work to dissect the current process and put immediate changes in place that will help smooth things out now (Bottom-Up work), while also working to rewrite all your processes so that everything becomes easier as time goes on (Top-Down work). The Bottom-Up side of this might look like creating a template for the clunkiest process so that you can pass this job onto a lower-level team member right away. The Top-Down might look like defining which processes needs systems and prioritizing those over the next few months.

Why Service Businesses Need to Do Both Top-Down and Bottom-Up Business Planning

The simple answer is time. While the Top-Down work is going to be what helps you create a sustainable business, it takes longer than Bottom-Up work. But only performing Bottom-Up work is like trying to put a band-aid on an amputated limb and calling it a day. Combining forces, however, and meeting in the middle allows you to make short-term progress that helps your day-to-day while also working toward the permanent elimination of the pain point for the future.

My name is Jennifer Goldman. For 30  years, I have been helping service-based businesses transform—from failing and on the verge of raising the white flag to earning and thriving in as little as six months. Of course, each business comes to the table with its own unique challenges, and for some, progress takes longer than others, but helping businesses do Top-Down and Bottom-Up work is really one major cornerstone of how we are able to make meaningful progress so quickly.

If you are a service-based business in need of help, let’s chat. Schedule a call with me today and we can run through your options. The sooner you commit to getting started, the easier running your business will be.

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Good luck. And as always, health and sanity to you!

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