Lateral communication is defined as an exchange or sharing information, ideas between people within a community, groups or units of organisation – anyone in one city can speak with anyone in another city. This is not only allowed, but encouraged in Agile ways of working. A couch should help the team remember the value of intensive communication even when distribution makes this harder. Communities communicate and store collective knowledge through lateral communication and is an essential ingredient in making hierarchies work
One significant benefit of lateral communication is that it helps counter the “mum effect”. The mum effect occurs when project participants fails to share bad news with others. Lateral communication is especially important on projects involving team members whose cultures and individual personalities make them less will to share bad news or more intimidated by those in leadership roles. Lateral communication involves not only the movement of information from the upper levels to the lower levels of the organisational hierarchy but also is defined primarily as the quality of information sharing among peers at similar levels.
Book: SUCCEEDING WITH AGILE Software Development Using Scrum by Mike Cohn