I started working in the computer industry in the mid to late 80's. Most of my work involved larger computers than micros and teams of up to 10 or more people working on bespoke projects.
At that time, we mostly followed some variation of the "waterfall method". Sometimes, if the customer asked for it, we would use a formalised version of the above like SSADM. The company I worked for adhered to the waterfall model fairly strictly, even though there were some severe problems with the way it was applied.
The waterfall system, for those unaware of what it is, breaks down a project into several different phases: requirements definition, functional specification, development, integration testing, system testing, acceptance testing, maintenance and support. Each phase is supposed to finish before the next one begins, although, in practice, there was always some overlap.
As for the tools, we worked with a variety of different hardware architectures and a variety of different operating systems. I probably worked with more hardware architectures and operating systems in the first five years of my career than in the subsequent 27 years.
The quality of the developer tools was variable. Some operating systems had source code control e.g. VMS, some didn't, so part of any project was to build some sort of source control system. Even the editing tools could be inadequate. If the OS supplied you with something as good as vi you were happy.