TL;DR

A company where every decision flows from the top might feel controlled, but it’s not truly scalable. Organizations that empower their people move faster, innovate more, and build stronger cultures where people actually want to stay and build their futures.

I believe top-down decision making is necessary once in a while in every company. Top-down decision typically also carries a high risk, high impact, and can be a costly bottleneck if relied upon too often.

I’ve worked in several companies where the CEO or a select few executives held the reins on every decision, big or small. In some cases, they were involved in everything, from approving minor design changes to insisting on how teams should work together and what tools they should use. In other cases, and this is an even worse situation, the leaders’ mere opinions or comments would turn into demands with people lower in rank who would then rush to execute, often uncoordinated.

While top-down decision making can be necessary, it should be used scarcely and with great care.

I’ve observed numerous times now that when leadership decides everything, people and teams stop owning the work they do. They stop making thoughtful decisions and instead start waiting for approval. This, in turn, kills the proactive solving of problems and people start focusing only on their “orders”. Over time, this erodes people’s confidence, autonomy, and creativity and you end up with people leaving your team/company or simply starts quietly quitting ^[1].

The symptoms are easy to spot, even from a distance: Slower execution, disengaged employees, and lots of missed opportunities. For those who keep working like this, it creates a culture of blind execution, and people stop questioning decisions and simply follow orders. In my experience, when employees aren’t encouraged to challenge ideas or suggest alternatives, innovation dies fast. And in the end the company loses out on valuable insights from those closest to the work.

I’ve been fortunate to also work in great companies that empower their people. As McKinsey writes: “Small, independent teams are the lifeblood of the agile organization. Top executives can unleash them by driving ambition, removing red tape, and helping managers adjust to the new norms.” ^[2] Great companies set a clear direction at the leadership level but trust those closest to the work to make decisions. This not only speeds things up but also fosters ownership and accountability.

And for the executives, I think Peter F. Drucker puts it very well: “Effective executives do not make a great many decisions. They concentrate on what is important. They try to make the few important decisions on the highest level of conceptual understanding.” ^[3] When people feel ownership over their work, they bring more energy, creativity, and problem-solving to the table. Among others, Gallup has found that engaged business teams drive positive outcomes within organizations and that low engagement costs the global economy US$8.9 trillion, or 9% of global GDP ^[4].

Empowered teams don’t just execute; they also think critically about how to improve things and deliver true value. And when teams can make decisions autonomously, leadership can focus on what actually matters: vision, strategy, and long-term success.

I firmly believe that companies thrive when decision-making is distributed. That means:

• Trusting people to own their areas without micromanagement.
• Creating decision-making frameworks so people know when and how to act.
• Encouraging leadership at all levels, not just at the top. This includes allowing for making mistakes and learning from them.

[1] HBR, When Quiet Quitting Is Worse Than the Real Thing (2022)
[2] McKinsey Quarterly: Unleashing the power of small, independent teams (2018)
[3] Peter F. Drucker, The Effective Decision
[4] Gallup, State of the Global Workspace 2024