When you're building a startup, every decision impacts growth, alignment, and execution.
One of the biggest challenges in implementing OKRs is deciding who should set them.
Should leadership define company-wide goals and cascade them down, or should teams create their own OKRs based on what they believe will drive impact?
There’s no one-size-fits-all answer.
The best approach depends on your startup’s stage, culture, and how much alignment you need to stay focused.
In this article, you'll explore the top-down vs. bottom-up OKR debate, the benefits and drawbacks of each, and how to find the right balance for your startup.
The Top-Down OKR Approach
A top-down approach means that leadership sets company OKRs and distributes them to teams. This ensures everyone is working toward the same strategic goals without distractions.
Why You Might Choose Top-Down OKRs
- Alignment from Day One – In an early-stage startup, focus is everything. By setting company OKRs at the leadership level, you ensure that everyone is working toward the most critical business priorities.
- Faster Decision-Making – Startups move fast, and a top-down approach allows you to set goals quickly without needing consensus from every team. This is essential when time and resources are limited.
- Clear Investor and Stakeholder Communication – If you're raising funding, investors want to see structured, measurable progress. A top-down OKR approach helps you ensure that your team’s goals align with investor expectations and growth milestones.
Challenges of a Top-Down Approach
- Lack of Buy-In – When OKRs are dictated from the top without team input, they can feel forced. Employees may struggle to stay engaged if they don’t see how their work connects to the goals.
- Less Adaptability – Startups thrive on agility. If OKRs are set rigidly from the top, it can be harder to adapt quickly to new insights, customer feedback, or market changes.
- Risk of Overloading Teams – Without team input, leadership may set overly ambitious OKRs that don't fully consider execution challenges, leading to unrealistic expectations.
The Bottom-Up OKR Approach
A bottom-up approach allows teams to define their own OKRs based on company objectives. This method encourages ownership, engagement, and innovation by allowing employees to decide how they can contribute to broader company goals.
Why You Might Choose Bottom-Up OKRs
- Greater Engagement and Motivation – When your team sets its own OKRs, they take ownership of their work. This creates higher commitment and accountability to achieving results.
- Encourages Innovation – Your team is closest to the product, customers, and execution. By letting them set OKRs, you give them the freedom to experiment, adapt, and find creative solutions to business challenges.
- More Realistic Goals – Since employees know their own bandwidth and obstacles, bottom-up OKRs tend to be more achievable and practical than those imposed from the top.
Challenges of a Bottom-Up Approach
- Potential Misalignment – Without a clear strategic direction from leadership, teams may set goals that don’t align with the company’s mission, leading to fragmented efforts.
- Longer Implementation Time – A bottom-up approach requires more discussion, alignment meetings, and revisions, which can slow things down - something many startups can’t afford in fast-moving markets.
- Risk of Prioritization Issues – Teams might focus on what excites them rather than what actually moves the business forward. Leadership still needs to provide guardrails to ensure the company stays on track.
The Best Approach? A Hybrid Model
For most early-stage startups, a hybrid OKR approach works best.
This means leadership defines the big-picture objectives, while teams develop key results and execution plans that align with those goals.
Here’s how you can structure a hybrid OKR process:
- Leadership sets high-level company OKRs – Define 3–5 core objectives that focus on growth, product development, customer acquisition, or retention. These set the direction without dictating every detail.
- Teams create key results and tactical OKRs – Instead of leadership setting every goal, teams define how they will contribute to the company’s objectives. This gives them autonomy while ensuring alignment.
- Regular check-ins ensure focus and flexibility – Hold weekly or biweekly OKR check-ins to review and track progress, troubleshoot challenges, and make adjustments as needed. This ensures teams stay aligned without being micromanaged.
Which OKR Approach Should You Use?
The best approach for you depends on your size, growth stage, and team dynamics.
Here’s what I recommend:
Pre-Seed & Seed-Stage Startups → Top-down is usually best. Your startup needs laser focus, and leadership should set the strategy while teams execute. You can introduce more collaboration as you grow.
Growth-Stage Startups → A hybrid model works well. Leadership sets direction, but teams take ownership of their execution. This balances alignment and autonomy.
Scaling Startups (Series B & Beyond) → Bottom-up becomes more viable. As teams mature, they should take more ownership of goal-setting. Leadership still provides guardrails and strategic oversight.
Not sure which OKRs you should set for your startup?
Read → 32 OKR Examples for Startups (From Early-Stage to Scale-Up)
Conclusion
Setting OKRs in a startup isn’t just about choosing between top-down or bottom-up - it’s about ensuring your team is aligned, engaged, and executing effectively.
A top-down approach helps you move quickly and stay focused in the early stages, but as you scale, giving teams more control over their OKRs can drive ownership and innovation.
A hybrid model often works best - ensuring clear strategic direction while allowing teams the flexibility to determine how to execute.
Ready to implement OKRs without the hassle?
OKRs Tool helps startups set, track, and align OKRs effortlessly - whether you use a top-down, bottom-up, or hybrid approach. Get started today for free and bring clarity to your goal-setting process.
