The business world contains a wide variety of structures and models, but two basic forms can be used to define the setup of many private sector organizations: vertical and horizontal. These distinctions are important because they not only signify a difference in organization structure, but also in the way an organization works, i.e., manages projects and gets results. While similarities do exist, and nothing in business is totally black and white, the difference between the two models can be vast.
A business in the traditional mold, vertical organizations feature well-defined leadership at the top of the organization whose influence filters down to middle managers and department heads. These middle managers then assign work to employees within their departments. Similarly, when work is complete, it goes back up the chain until it reaches a manager with sufficient authority to approve the work, which is then moved outside its original department to other areas of the company for quality assurance or production.
For the first half of the 20th century, vertical organizations utilized a command and control project management style. As the name implies, this method involved a senior figure within the company assigning work with very specific guidelines and little room for deviation. If this structure sounds authoritarian, that’s because it is, but during its heyday, it was implemented for good reason.
At that point in time, a significant skills gap existed between managers and their subordinates. Managers often boasted higher levels of education, and were competent in the tasks their employees completed on a daily basis.
With the dawning of the knowledge economy, command and control began to fade as innovation began to rival production capability as the key competitive edge in many markets. Today, vertical organizations more commonly use a waterfall methodology, which revolves around work flowing through different departments until it reaches an end point. The waterfall method leaves room for innovation within departments, but limits the amount of collaboration between different types of workers. The workflow focuses on dependent work, meaning that work takes place in a sequential fashion.
In contrast to vertical organizations that feature a tiered structure of management, horizontal organizations focus on skill proficiency rather than management hierarchy. Less division exists between upper management and skill workers. For example, a CEO might work directly with a development team in completing projects, but in very technical situations, a CEO would defer to a software developer whose knowledge far exceeds that of the chief executive officer.
Organizations with a horizontal, or flat, management structure often begin as start-ups with little need for traditional management. Titles don’t matter as much as skill, so employees without impressive positions are trusted with greater input into project decisions and given the ability to solve problems creatively. Productivity is what most concerns these organizations, making them less preoccupied with distinguishing job roles and more focused on executing their goals.
Staying in line with their company structure, horizontal organizations often employ an agile form of project management that allows for work to be completed in an iterative process rather than sequentially. An agile method involves completing various portions of the project and gathering feedback through testing with customers to help keep the requirements of the project relevant and defined.
While agile is often associated with software development, it’s applicable to any innovative project in which the requirements may change overtime or are unclear from the beginning. The iterative testing of this project management style allows teams to continuously gather updates on their work and adjust accordingly. It also works well with a horizontal organization’s structure because various stages of the work don’t have to be dependent, meaning team members who can work in a cross-functional capacity can realize greater value in this system.
Agile is difficult to scale however, as is the horizontal organizational structure. As a project team grows, it may become difficult to make decisions as quickly as a vertical structure because so many of the team members wield input into the project.
Both project management and company structures have their strengths and weaknesses, but methodology also requires the right tools, like project management software, to be successful. A waterfall approach may require software more focused on Gantt charts and forecasting, while an agile project may utilize a platform that features more collaborative tools. Check our comparison of Wrike vs Asana to get a breakdown of two software tools that work well for both agile and waterfall methodologies.
These divisions between vertical and horizontal organizations and their project management styles aren’t set in stone, but insights can be drawn from the utilization of waterfall and agile methods in different business models.
How does your business manage projects? What tools do you use? Let us know in the comments.