Horizontal or Vertical Business Growth? How to Decide

Best Growth for BusinessIs your company growing by leaps and bounds? Are you getting so much new business you’re not sure how you’ll handle it all? Have you been thinking about making a few new hires to help with your rapidly expanding workload?

Back in 2009, I was in the same position. I had just founded my digital marketing agency, Marketing Zen, and was thrilled to see it growing so quickly. But I also realized that all that growth meant I needed a bigger team, ASAP.

Before I even started to spread the word that we were hiring, I sat down and developed a plan for building my team strategically—a plan that would inform the structure, direction, and ultimately, the success, of my company as it moved into the future.

And now, 7 years and 30 employees later, it’s safe to say that plan was definitely a factor in ensuring that Marketing Zen has kept its momentum going.

So what’s the secret to building the right team for your business? Is it better to build vertically, following the traditional business model used so successfully by corporations for decades? Or should you build horizontally, embracing the agile movement and all its runaway success? Let’s take a look at the pros and cons of each approach.

Building Vertically
First of all, we need to define exactly what a vertical organizational structure means. In this approach to team building, a chain of command is put in place, with the CEO handling the big picture, and layers of middle managers guiding employees in their day-to-day activities. Imagine this structure as a relay race, with each person passing the baton sequentially to the next person in the hierarchy in order to get things done.

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This traditional business structure is usually easier to manage, because each person has clearly-defined roles and responsibilities. Even if your team eventually grows into the hundreds or thousands, this model is scalable, and helps to keep things running as they always have.

However, all those layers of management can also inadvertently mask any issues that may arise, allowing problems to get out of hand before they are caught. And the red tape that hierarchies bring with them can also be detrimental to a company’s ability to pivot quickly and take advantage of opportunities and trends.

Building Horizontally
If a vertical organization is like a relay race, then a business with a horizontal structure is like a rugby match, where an entire team works as a unit to move projects along. In this approach, the CEO interacts much more with the entire team, and often has input into whatever projects are in process.

A horizontal team offers plenty of transparency, so problems can be addressed quickly, and plenty of flexibility, as well, since processes are not encumbered by red tape and layers of approval. Employee morale can also often be higher in horizontally-structured businesses, since a culture of teamwork must be fostered in order for projects to get done. However, such a structure can also make a business harder to scale and harder to manage, as employee roles and responsibilities are not as clear cut.

Which is Better?
In my experience, neither the horizontal nor the vertical approach holds all the answers—the best approach I’ve found is a hybrid one. Taking bits and pieces from each type of structure allows businesses to customize an approach that works for their particular situation, and provides them with the best of both worlds.

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At Marketing Zen, we’ve embraced Agile ideology, empowering vertical teams to run with their projects, and making client satisfaction everyone’s central goal, rather than just focusing on making the boss happy (although the two do coincide!). But we also have a layer of middle management in place to help guide and support those teams in their work. In this way, we gain all the benefits of both horizontal and vertical structures, and minimize the negative aspects of each.

So which approach is right for your growing business? I’m willing to bet that a hybrid structure will be your best bet, too. But other than that, the details are up to you. Where do you see your business in 5 years? 10 years? What kind of culture do you want to foster? What does your workflow look like? Answering these questions will give you a sense of which aspects of each structure will work best for you, and what positions you should be hiring for as you look to grow your team—and ultimately, they’ll help usher your business into a promising, prosperous future.

Follow Shama Hyder on Twitter @Shama.

Ajeet Khurana
Ajeet Khurana
Ajeet Khurana wears many hats: author, angel investor, mentor, TEDx speaker, steering committee of the NASSCOM Start-Up Warehouse, Director of Founder Institute, Venture Partner with the seed initiative of a top Venture Capital firm, and former CEO of IIT Bombay’s business incubator, among others. Before all this, he was entrepreneurial twice in the field of education and web publishing. As a lecturer at the University of Texas at Austin, he taught e-commerce back in 1993, when the term "e-commerce" had not yet been coined. An undergrad in computer engineering from the University of Mumbai, and an MBA from the University of Texas, Ajeet is presently an active name in the startup ecosystem. From starting two ventures as a solopreneur, to helping a large number of startups with their go-to-market, he has never shied from getting his hands dirty. At the same time he has helped dozens of startups raise investment. He truly believes that small business owners are driving change in the world, and need to be facilitated as much as possible. Innumerable small businesses have gained from his attitude, vast professional networks, financial acumen and digital mindset.

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