Mohib Yousufani, partner and senior global leader of transformation and digital at PwC, had seen it countless times in his 25 years in enterprise tech and digital transformation. Companies would launch ambitious top-down initiatives—massive digital overhauls, enterprise-wide AI implementations, comprehensive process redesigns—only to watch them struggle or fail. Meanwhile, pockets of innovation would emerge organically from individual departments, showing real promise but never scaling beyond their local impact.
Neither bottom-up nor top-down innovation alone can sustain the full spectrum of a company’s needs, because each approach addresses only part of the innovation puzzle. Bottom-up innovation, fueled by employees on the ground, often generates practical, incremental improvements and fresh ideas informed by day-to-day challenges. Yet, it can lack the strategic alignment or resources to scale effectively.
Conversely, top-down innovation, driven by leadership, sets vision and allocates funding for transformative projects, yet it risks being disconnected from real-world operational insights or customer pain points. Companies that rely exclusively on one model risk either stagnating in minor optimizations or overreaching with visionary projects that lack grassroots viability. For lasting success, organizations need a dynamic balance: leadership to guide innovation toward strategic goals, and grassroots creativity to ensure solutions are relevant, executable, and responsive to emerging realities.
As Yousufani explained, “citizen-led transformation”—the bottom-up transformation where individual departments or teams implement new technologies and processes independently often showed initial promise. Still, they rarely delivered the significant ROI that organizations needed.
The issue with bottom-up transformation isn’t that it isn’t effective for those groups or discrete staffers, it’s that making changes or investing in new technologies without addressing systemic process debt doesn’t overcome broader organizational inefficiencies that plague enterprises, Yousufani said.
Bottom-up initiatives, no matter how clever or effective locally, couldn’t address the systemic issues that required enterprise-wide solutions.
The Strategic Innovation Imperative
Yousufani advocates for “vertical end-to-end” transformation. Rather than trying to implement changes across all departments simultaneously, or allowing purely grassroots innovation to drive change, the focus should be on entire business verticals like HR, finance, and supply chain management.
This requires strong CXO leadership to align technology investments with business objectives. “Successful transformation initiatives need CFOs, CEOs, and board mandates to drive for successful outcomes. Without this strategic direction, even the most innovative bottom-up efforts would remain isolated and ultimately ineffective,” Yousufani said.
Still, Yousufani pointed out that pure top-down strategies have their limitations. “A lot of companies find they just can’t do that,” he acknowledged, referring to organizations that couldn’t execute comprehensive, CXO-driven transformation initiatives. Common reasons why include setting ambitious goals without fully accounting for cultural resistance, operational constraints, or the practical insights of frontline teams needed to make those visions achievable.
Incremental Value Creation
Vic Chynoweth, CEO at portfolio management software provider Tempo Software, experienced that dynamic in his work with enterprise software implementations. Organizations would try to implement massive, company-wide digital transformations. Chynoweth contends that’s where strategic portfolio management comes in. He explained that strategic portfolio management enables organizations to incrementally implement transformation in a business unit or business function, prove its value, and then expand into other areas of the business.
The key, Chynoweth explained, is that successful transformation requires both strategic vision and tactical flexibility. Organizations need clear direction from the top about where they are heading, but they also need the ability to adapt and evolve based on what they learned from implementation efforts.
Both Yousufani and Chynoweth agreed about the importance of delivering value incrementally. Yousufani described PwC’s approach of “delivering incremental value drops in digital transformation initiatives with quarterly value drops,” he said. These efforts include scaling proven successful transformation efforts, culture change management, as well as business goals and IT alignment,” Yousufani said.
This balances the need for strategic transformation with the practical realities of effective organizational change. Rather than waiting for a massive, multi-year transformation to deliver results, organizations can see tangible benefits every quarter while working toward their larger strategic goals.
Chynoweth echoed that sentiment and explained that a modular strategy enables companies to “establish best practice and proliferate from there.” Success in one area creates momentum for broader adoption, but without the risk of betting everything on a single, massive initiative,” he said.
The Future of Balanced Innovation: Aligning Bottom-up/Top Down
The most innovative organizations aren’t always purely top-down or bottom-up—they carefully orchestrate combinations of both. Strategic leadership provides direction and resources, while grassroots innovation offers practical insights and the capability to adapt rapidly.
Chynoweth noted how strategic portfolio management helps companies “keep their investments in tech aligned to make sure they’re making the right investments.” The key is creating systems that can channel bottom-up innovations while ensuring they support the organization’s strategic objectives.
Organizations that succeed in managing both top-down and bottom-up innovation typically have several characteristics. They establish clear strategic priorities from leadership while creating space for experimentation and adaptation. They implement systems for capturing and evaluating innovations regardless of their origin. And they create mechanisms for scaling successful pilots while maintaining strategic alignment.
The future belongs to enterprises that can master this balance. Pure top-down enterprises will likely continue to struggle with implementation realities and changing market conditions. In contrast, pure bottom-up organizations would continue to lack the scale and coordination needed for significant impact.
The winners will be those organizations that have the strategic vision to identify transformational opportunities and the operational agility to adapt and evolve as they learned from implementation. The focus should be on creating organizational capabilities that can thrive in an increasingly dynamic and unpredictable business environment. The companies that strike this balance will find themselves not just surviving change, but leading it.
