WHAT’S ALL THIS VERTICAL AND HORIZONTAL INTEGRATION STUFF?

13 06 2010

I have received an email asking me if I could explain the difference between horizontally and vertically integrated strategies with an explanation of why I consider one to be far superior to the other. Apologies to those who already grasp the concept but I will attempt to keep my explanation simple and easy to understand (therefore basic). Anyone wanting more should please feel free to email me.

Nearly all strategies that are produced in the UK today are ‘Horizontally Integrated’ which means that each aspect is planned as a separate area, a silo if you like. A ‘Vertically Integrated’ strategy on the other hand considers all aspects of planning and seeks to plan in a way that ensures one area of function fully compliments and supports others.

The idea is perhaps best described by considering the fitness requirements of a sports person. Whatever the sport, position or activity within the sport, or the level of competition participated in we know that the fitness of all sports people can be broken down into five areas; strength, speed, endurance, flexibility and co-ordination. Those involved in sport may have heard these five areas referred to as the five S’s of strength, speed, stamina, suppleness and skill.

A horizontally integrated strategy aimed at developing the fitness of our theoretical performer will look at each of these five areas in isolation potentially creating more training than there is time for when all five areas are inserted into the training week or running the risk of overtraining and hence injury and/or illness.

This problem could be addressed by, for example, allocating 20% of available training time to each area which would undoubtedly help our performer gradually gain fitness but in a very non-specific, non-performance orientated way.

Can’t see it? Well consider the demands of a marathon runner, a sprinter, a formula one driver, a front row forward in rugby, a rhythmic gymnast or any other variation on what a sports person may be and you soon realise that the fitness demands of each are different and hence the ratios of the five basic fitness elements need to vary.

That would still be possible using horizontal integration; we would simply plan each element separately but to varying splits of the available time. Hence the marathon runner might spend more time on endurance, the sprinter on speed, etc. And in doing so we are already partially using vertical integration by considering the other, necessary components of the plan.

Further, these five components are not absolutes, for example strength and speed combine to develop power. Then there is the order in which each element is done in order to maximise the benefit of the training, it is little use seeking to improve maximum speed if (e.g.) already fatigued from a prior endurance session and unable to actually generate top speed.

Each performer will have further elements to consider if he/she is to maximise the effort they put in. Technique, tactics, psychology, recovery, even lifestyle all need consideration and all need to fit with each other to create the right training programme for the individual.

This is where vertical integration comes in. Elements are combined, their effects on each other considered and tailored to the specific individual requirements so that instead of a series of isolated plans all ticking their own boxes in ignorance of others, we have one plan which considers everything needed to get from the starting point to the end goal, performing in the best possible way.

What impact does this have on strategic planning in other areas? Consider a story told to me by a friend who worked at a local authority facility. There was an event on the Saturday and so the department which marks the appropriate lines on the infield came on the Wednesday and painted the lines required for the stalls and other demarcations. There being an event due, the department responsible for cutting the grass also came to play their part in preparing of the facility. Unfortunately, they came on the Thursday and in cutting the grass also cut away the newly painted lines.

According to my friend, both departments swore blind they had been operating to the agreed plans and it was the other’s fault. And, of course, they did have plans, horizontally integrated plans which considered only their small part of a far larger picture. Had this particular council adopted a vertically integrated planning system the (obvious) issue of marking white lines on playing fields and other areas having to work with grass cutting would have been picked up.

No harm done though? The white lines could simply be repainted. Yes, they could but consider the added costs in terms of materials, personnel and time and you start seeing the major benefit of vertical planning over horizontal planning; it is not wasteful of resource.

While this example may sound obvious, the less obvious is also picked up when vertically integrating strategic planning.

Consider the NHS, a few years ago it was reported that the NHS had over 353 strategies currently running, not including local PCT level strategies. It may have been more but no one could say for sure(!) In short, for every issue/problem the NHS has faced, another strategy has been produced. Each strategy has sought to service its own area/issue and largely ignored the rest of the NHS ‘business’. This is horizontal integration of strategies; everything necessary is covered but without cross reference resulting in millions in wasted resources which might otherwise have been shared, better targeted or, given the current economic climate, saved.

Under a system of horizontally integrated planning, the NHS and its 353+ strategies cover everything required but ‘production output’ and overall performance is seriously affected, even undermined,  by the lack of an overall strategy which attacks the big picture and allocates resources appropriately, specifically and economically (i.e. vertically) – even with 353+ strategies in place to (attempt to) service every need.

While many mock the NHS and other public bodies, we also see this thinking applied in business everyday but horizontal planning has become so integrated into British thinking, so accepted among managers and directors that no one even notices any more. Worse, it undermines the performance of those businesses just as seriously as it would the performance of our theoretical sportsperson. It is a blind acceptance that being good enough is replacing the pursuit of excellence.

A word of caution, the vertically integrated strategy does not negate the need for ‘departmental planning’ what it does is ensure that the silos are removed and that everyone’s plan is co-ordinated with everyone else’s to overall benefit, direction and achievement of the whole.

I have used military analogies before to explain elements of planning but consider this; what would happen if military planning was conducted horizontally? Air strikes at the wrong time to support ground troops? Or even attacking different targets from where needed? I trust I do not need to labour the point. When lives are at risk only vertically integrated strategic planning will suffice. When it is your organisation’s success, failure or some mediocre half way house on the line, why plan using an inefficient method?

Horizontal planning is easier, less time consuming and (kind of) points you in the right direction while giving the impression of action. Vertical planning is more difficult and takes longer to get right, but if it is success you are seeking (think of the sports performer), why would you compromise?

© Jim Cowan, Cowan Global 2010

Jim.cowan@cowanglobal.net


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2 responses

17 09 2010
WHY BOTH THE GOVERNMENT AND THE TUC ARE RIGHT……..AND WRONG « Cowan Global Blog

[…] ‘What’s All This Vertical And Horizontal Integration Stuff?’  […]

13 02 2011
Sami

wonderful, I was looking for that. thanks for your efforts

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