Embracing the Virtues of Virtual Teams

Dispersed teams can actually outperform groups that are in one location. To succeed, however, virtual collaboration must be managed in specific ways. In the past, managers used to co-locate team members because of the high levels of interdependencies that are inherent in group work. Recently, though, more and more companies are beginning to organize projects over distance, with teams increasingly consisting of people who are based in dispersed geographical locations, come from different cultural backgrounds, speak different languages and were raised in different countries with different value systems.

Over the past 10 years, various studies have investigated the differences in performance of co-located and dispersed teams, quietly assuming that members of the latter never meet in person and members of the former work together in the same office throughout a project. And as past research has repeatedly shown, even the smallest degrees of dispersion, such as working on different floors in the same building, can greatly affect the quality of collaboration. 

Such studies have found that virtual teams offer tremendous opportunities despite their greater managerial challenges. In fact, with the appropriate processes in place, dispersed teams can significantly outperform their co-located counterparts.

So here's what you need to know about the bright and dark sides of dispersion:

The teams level of dispersion is never fixed, it is flexible. Thus when making decisions, managers must take into account the various pros and cons of dispersion.

• Pros: Heterogeneous knowledge resources, Utilization of cost advantages, Access to diverse skills and experience, Knowledge about diverse markets.

• Cons: Language differences, Cultural incompatibilities, Difficulties establishing “common ground”, Fewer synchronous face-to-face interaction, and good teamwork more difficult to achieve.

Bear in mind that despite the cons above, dispersion potentially has substantial advantages:

• First, in order to accomplish increasingly complex activities such as research and development, companies (particularly larger ones like IBM, General Electric or SAP) tend to cluster their competencies in different centres of excellence, which are often scattered geographically although part of an international corporate network of operations. SAP, for instance, has its global headquarters in Walldorf, Germany, but has built up large R&D centres in India, China, Israel and the United States in order to reduce costs and leverage their global know-how in software engineering.
•  Within each of these competence centres, the depth of expertise tends to be very strong, while the diversity of functional backgrounds is relatively weak because of specialization. Managers can take advantage of this organizational structure by assembling employees from different locations in such networks to create a team that can optimally integrate the different pools of expertise to perform a particular task.
• Moreover, higher levels of structural and demographic diversity in dispersed teams can be highly beneficial. Structural diversity is a direct consequence of having team members from multiple locations associated with different business units and reporting to different managers. Such diversity can be highly valuable for teams, because it exposes members to heterogeneous sources of work experience, feedback and networking opportunities. In addition, virtual team members are often diverse in nationality. Although such diversity may complicate team dynamics, it can also enhance the overall problem-solving capacity of the group by bringing more vantage points to bear on a particular project.

The Do’s and Dont’s of managing dispersion

The following key lessons can help companies maximize the performance of their virtual teams:

1.      Don’t underestimate the significance of small distances

Research shows that performance is noticeably lower for teams with people located in the same building but on different floors when compared with teams where all members are on the same floor. Interestingly, teams with members in the same building but on different floors also performed worse than teams with greater degrees of dispersion, including those that had members spread across a city, country or even continent. In fact, the only teams that fared worse were the intercontinental teams, with a significantly higher level of inter-cultural diversity and temporal dispersion (spanning many time zones).

Explaining these results: Teams with members in the same building, albeit on different floors, do not usually consider themselves as being dispersed and, hence, may easily underestimate the barriers to collaboration deriving from, for instance, having to climb a flight of stairs to meet a team mate face to face. In contrast, groups that are dispersed across a country or continent are more aware of their situation and may make extra efforts to improve such vital processes as task-related communication and coordination. To prevent that from happening, companies such as Cisco Systems, BMW and Corning have designed their office layouts to maximize interpersonal interactions. At Cisco Systems Inc.’s sites in Germany, for example, only three people have their own individual offices. All of the other 850 employees work in an open-space maximising opportunity for interaction.

2.      Emphasise team work skills

Many companies make the mistake of staffing such teams primarily on the basis of people’s expertise and availability. Instead, managers must also consider social skills — a major prerequisite for good teamwork. It’s unrealistic to bring together individuals from different locations with the expectation that they will automatically know how to collaborate in a virtual environment. Groups with increasing levels of dispersion are also progressively more dependent on their level of teamwork, specifically, their ability to perform key processes such as mutual support, communication and coordination. In order for virtual teams to achieve their greater potential (and take advantage of their functional and structural diversity), members must first and foremost be able to establish a basis for the effective exchange of their varying capabilities — all of which requires teamwork-related skills as a critical ingredient. Otherwise, the virtual team could very likely perform worse than a co-located group.

3.      Promote self-leadership across the team
 

When a group is closely co-located, an individual leader can more easily detect any deficiencies in teamwork and address them with a hands-on managerial style. An interpersonal conflict, for example, might be resolved by talking in person with the different parties in an informal setting. Such an approach is largely non-existent in virtual teams. Geographic dispersion and cultural diversity make it difficult for any individual leader to ensure that the team is functioning effectively. Even though the advanced use of the latest information and communications technologies can help, time zone differences and cultural problems can’t be overcome. Members generally need to be aware of the difficulties of dispersed collaboration and find effective ways to overcome those obstacles on their own. This highlights the need for people to be more self-sufficient in how they manage their own work because the team leader is less in a position to help. Consequently, companies that are serious about virtual collaboration must target their HR efforts not only at designated team leaders but also at team members so that those individuals can develop the skills necessary to work in a virtual setting.

4.      Provide for face to face meetings

Particularly effective for initiating and maintaining key social processes that will encourage informal communication, team identification and cohesion. A project kick-off meeting, for example, can be used to bring everyone together in one location for several days so that people can develop a shared understanding of the task at hand and begin to identify with the team.

5.      Foster  a global culture

Accordingly, managers and team members need to recognize and frame their company as such, communicating the international nature of the organization’s operations and markets. Various human resource strategies can help foster that mind-set, including temporary staff assignments at foreign locations and inter-cultural training. Nestlé, General Electric, IBM and SAP — all known for the global reach of their business activities — provide good examples of how to actively foster a global employee mind-set. Managers at Nestlé S.A., for instance, are expected to move to another country every three or four years so that they can learn about the specifics of each of those markets and develop a global mind-set from their experiences. Such practices advance the development of diversity-friendly attitudes and the ability to work in different contexts, which in turn help employees cope with the challenges of distance when working on virtual teams.

Concluding Points

Virtual teams can outperform their co-located counterparts when they are set up and managed in the right way. A firm needs to ensure that the group has the necessary socio-emotional and task related processes in place. Only then can virtual teams effectively integrate dispersed knowledge to take advantage of their cultural and structural diversity, thereby avoiding some of the drawbacks of dispersion while reaping its benefits.

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