It was not a smooth start for Heather Fitzpatrick when she opened the virtual doors of her marketing firm, MarketFitz, back in 1998. She wanted to build a staff of people who worked out of their own homes. It would encourage them, she figured, to leave their desks and go "connect with the community."
But in those days, Fitzpatrick recalls, the technology available to help bind a geographically dispersed group - such as a phone system that provides everyone with the same three-digit exchange or a common internet domain for email addresses - was hard to come by, especially for a small firm. Meanwhile, potential clients wondered if MarketFitz was really a team. "We tried to assure people by talking about our how this was cutting edge," she says. But even after the firm won some awards for the progressive arrangement, clients couldn't quite wrap their heads around the idea. "I used to get a lot of questions like, 'How do you know people are working?'" says Fitzpatrick, who eventually grew the business to around 100 employees before deciding to scale back and focus on market research. In retrospect, she says, "I wish we hadn't talked about it as much because it compounded the problem. It made people question even more."
Today, companies are less hesitant about highlighting their virtual virtues - but it took some 30 years for the "virtual office work" to gain respectability, as both technology and conventional wisdom finally caught up to the concept. A whole host of web-based communications and project sharing tools have emerged to streamline the practical side of managing such an operation. And the economic benefits have become increasingly clear-cut: "You save money. Productivity goes up. And it's easier to recruit people," says management consultant Jack Nilles, who actually coined the term "telecommuting," the predecessor to "virtual office," in 1974.
But for all the advances in communications, consultants and business owners say that technology isn't the hard part about building an effective virtual company. It cannot, after all, create a company culture, keep employees engaged and pulling in the same direction, or even ensure that employees are doing their job. Technology is not, in other words, a substitute for management. What's more, traditional management techniques need to be adapted to a virtual office environment.
Choosing the Right Technology - Or None
One of the most important factors, says Gil Gordon, a telecommuting consultant based in Monmouth Junction, N.J., is knowing what communications technologies to use when — and when to avoid it altogether. The options range from conventional e-mail to online project sharing software to extremely lifelike video conferencing systems known as "telepresence." But they shouldn't be used interchangeably.
The trick, says Gordon, is to pick the right medium for the message. If the conversation is straightforward - say a meeting to iron out the details of a product launch - then a telephone or web conference will suffice. But when the stakes are higher and emotions may come into play, he says, "there's no substitute for getting people around the table."
In fact, Gordon recommends to clients that virtual companies be systematic about scheduling real face time - a semi-annual meeting followed by a company picnic, say - to solidify both professional and personal ties between employees. Rick Galbreath, a human resources consultant who runs his seven-employee virtual company, Performance Growth Partners from his home in Bloomington, Illinois, agrees that "you have to schedule friendship," so he plans getaways a couple times a year that are purely social, in addition to quarterly business gatherings.
Measuring Productivity From Afar
One of the biggest hurdles faced by managers of remote employees is a nagging worry that their employees aren't working, or at least not working hard. The first step, of course, is to hire people who can thrive in an unstructured environment. Hiring managers have to judge from work history and preferences whether a prospective employee can be self-sufficient and self-motivating.
Then it's a matter of setting clear expectations and systematically following up to reaffirm them. At Gurnet Consulting, an IT project management firm, founder Marty King believes the best way to monitor the productivity of his 30 employees, mostly scattered around New England, is to have them broadcast it. Employees post brief but regular updates on their work to Yammer, an internal social network, while project managers post regular status reports that are available for all to see. And once a week, a manager is tapped to present a webinar on his project to the whole consulting staff. "We're really into enterprise social networking, and using these tools to really pull the collective intelligence of the office together," King says.
Creating Corporate Culture - Without A Water Cooler
Gurnet also attempted to fill the function of the water cooler with Yammer, complete with profile pages, status updates and discussions. The network mixes the personal and the professional. "I've posted pictures from my 4th of July, and people post industry-related content that really helps the business," says King. "If an employee has a challenge, they can post a question on it on the enterprise s network, and the whole group can work on it."
Galbreath, the consultant who runs a virtual company, argues that virtual companies may actually have an advantage when it comes to measuring productivity. "In an office environment, we kid ourselves that someone looks busy working over there, but you don't really know what they're doing," he says. "But when you're at a distance, the conversations are much more candid about what you're doing and what the result expectations are. That's the only thing there is to talk about."