Virtual Teams: Pros, Cons & Best Practices

Tech companies in Boston and Silicon Valley have a talent crunch. They can’t find enough programmers. Yet in small towns and cities across the country, and in countries around the world, programmers struggle to find good jobs.

Why the disconnect?

Large tech companies have been giving workers telecommute options for years. Teams comprise of members all around the world. Research has shown virtual teams can even outperform on-site teams when the right processes are in place. Yet most startups in Boston and Silicon Valley require you to work on-site. The assumption is that startups require teams to be co-located to be effective.

With the current discussions surrounding the talent crunch in Boston, I want to challenge that assumption.

At the MassTLC Innovation 2011 unConference this upcoming Friday, I plan to host a roundtable discussion on the pros, cons and best practices of virtual teams, and challenge the assumption that Boston startups should be building teams locally. This post explores some of the issues I’ll be bringing up. 

Defining “Virtual Team”

A virtual team consists of professionals working remotely in various locations. Some members may work out of their home, some may work in co-working offices, while others might work in branch offices.  All, however, work on the same team and work toward the same objectives.

Virtual team members collaborate and work together from separate locations by leveraging technology: instant messenging, web conferencing, Skype, online project management software, etc.

Teams located in the same location may have one or two members located elsewhere. Some people may not consider this a full virtual team. For the purposes of exploring the topic, I’m going to include these teams in the definition as hiring remote members can be one way to transition to a broader virtual team.

The Pros

Others have discussed these in the past, but pros at the company level include:

• Cheaper Salaries
  While salaries in Boston, New York and Silicon Valley skyrocket, salaries for programmers elsewhere remain much lower. Where I live, I regularly see positions advertised for $35-40,000 for junior programmers. Expand outside the U.S. and the price goes lower. I’ve hired awesome senior developers overseas for as low as $18/hour.
• Less Overhead
  Avoid paying for office space and parking for employees. Even if you provide money for an employee to set up a home office, the cost remains significantly lower than renting a regular office.
• Best of Breed Employees
  Hire for the skills you need, not just what’s locally available. And hire more experienced employees, those with families and houses that don’t want to relocate or do a long commute to your office. I once needed an Oracle SQL expert with experience in the analytic and hierarchical functions. I found a professor in Croatia who worked out perfectly.
• Less Competition for Employees
  Employees in smaller cities, or those who want to re-locate to a smaller city, have fewer job options and often will jump at a chance to work remotely for the right company. Many of these people worked in one of the tech centers earlier in their career, then relocated for family or quality of life issues.
• A 24 Hour Work Day
  If you use resources in other countries, your company never sleeps, potentially allowing you to move twice as fast. Divide your technical development by type of task, by module or by product. Focus on marketing strategy during the day, and let your overseas team work on implementation during the night. Or take advantage of time differences to let morning and night people work when together their energy levels are highest.
• Improved Communication
  While poorer communication often gets cited as a reason to avoid remote teams–and there definitely are difficulties when communicating remotely–remote communication has two advantages: 1) it forces you to articulate your thoughts and communicate clearly, which helps reduce vague and unclear instructions and 2) you can easily record and save discussions for later reference. Want to know what someone said in a meeting? Go back and review the recording or chat log. And stop wasting time transcribing white boards–it’s all digital with virtual teams.
• Metrics Become Dominant
  I stole this one from Rob Kelly, but he makes an excellent point. Managing a remote team, you rely on metrics and progress to measure employees rather than relying on the number of hours in the office. Progress trumps effort. A reliance on metrics helps you understand your company better and investors love metrics that measure progress.
• Extra Bandwidth During Meetings
  Activities considered rude or disruptive during face-to-face meetings can be beneficial during online meetings. Researching the topic being discussed, referencing tasks & documents brought up during a meeting and leveraging chat to have side conversations to build consensus, or ensure all questions and viewpoints are being addressed, give online meetings a leg up over in-person meetings.
• Increased Diversity
  Team members located in different states or countries increase the diversity of your team. Diversity gives you multiple points-of-view, helping you to see the problems you are tackling holistically. Diverse viewpoints also help limit the reality distortion field that can exist around startups in Boston or Silicon Valley (e.g.: not everyone uses Eventbrite, Yelp or Twitter).

With hiring programmers being a competitive business, consider these benefits to your employees as well:

• No Commute
  With the average Boston commute time being 28 minutes, and some commutes lasting up to an hour, that’s 1-2 hours of work time your employees save each day. That’s not to mention the improved mood your employees will be in when they don’t have to deal with crazy drivers, traffic jams and public transportation break-downs. Add to that cost savings on gas and a better environmental impact, and your employees will thank you.
• Flexible Scheduling
  Employees at tech companies often have flexible schedules anyway. But the ability to pick up the kids from school in the middle of the day, take a refreshing nap, or work after the family has gone to sleep gives your employees additional options.
• Healthier Food
  Working at home can give your employees the option to make healthier food. I often bring my laptop into the dining room so I can cook and work at the same time.
• Improved Health
  Scheduling time to work out gets easier when you work at home. Going for a quick run to think through a problem becomes easier when you have a shower you can use when you get back. I also take advantage of having both a sitting and standing desk, a luxury I’d likely not have in a Boston or Silicon Valley office where space is expensive.
• Improved Quality of Life
  Being able to live and work where you want to has enormous benefits on your mood and performance. Most people move to Asheville, North Carolina, where I live, to improve their quality of life. With a hiking trail 200 feet from my front door, gorgeous mountain views off my back porch and a 10 minute drive from the “suburbs” to downtown, I get to be much more relaxed and effective than when I lived in San Francisco.
• Fewer Interruptions
  For creatives, who take time to get into a flow state and then must ride that wave to be most productive, having a private office with fewer interruptions increases productivity. Joel Spolsky has written often about the need for private offices for developers. A home office can be the ultimate private office, if done right.

Cons

All that said, there clearly are cons to having a virtual team. Among them:

• Lower Bandwidth Communication
  Face-to-face meetings allow multiple channels of communication. Body language, touch, smell, subtle changes in one’s tone of voice all disappear or diminish when communicating electronically. Emotions and incongruity between what someone says and what their body language indicates become difficult to detect. E-mail and online forums have particular problems here.
• Extra Overhead
  Remote teams require tasks, ideas, bugs and work to be documented, saved and tracked in online systems. When everyone’s in the same office, you can simply throw up a white board or set up an internal file server to coordinate. Setting up and maintaining the systems to work online takes extra time. Though it has gotten far easier in recent years and I would argue that the effort is worth it, even with co-located teams.
• Harder to Track Effort
  You lose the benefit of seeing someone in the office every day, being able to stop by their desk and ask them what they’re working on. Instead, you have to develop other techniques to track and coordinate work.
• Investors May Not Like It
  I imagine it’s satisfying for an investor to walk into an office and see a dozen people busy at their desks. It makes it seem as if progress is being made and their money is being put to good use. I have not experienced this, but I’ve been told there’s a bias in the angel and VC community against virtual teams. Perhaps because they lack experience with them. This could make fundraising harder if you use a virtual team.
• Harder to Create Culture
  The black art of imbuing your company culture into employees gets harder when the team is distributed. You have fewer touch points so you need to use those you do have wisely. It’s also harder to create a sense of camaraderie when you all can’t go out after work for a drink. Though this can be mitigated someone by getting the team together in person at regular intervals.
• Requires New Skills & Behaviors
  If you’ve never worked on a virtual team or run one before, there’s a new set of skills and behaviors you have to learn. Same goes for your employees. This means you’ll all make mistakes initially and get things wrong. The extra overhead of learning new interaction styles while starting a company may be too much. Though, again, they might just be the key skills you’ll need to learn to make your business more effective. Working remotely with my employees helped me be more effective working remotely with our customers.

Best Practices

When running virtual teams, best practices I’m aware of include:

• Use Instant Messenger
  Use an instant messenging program to create a sense of presence amongst members of the team. Use chat to have side conversations during meetings to gain consensus, confirm understanding or ask questions. Ask quick questions through instant messenger as a substitute for popping into someone’s cubicle.
• Use Skype
  Skype can be used for instant messaging, phone or video calls. One manager I spoke to last week mentioned how he’s training his team that Skype should not be treated the same as a phone call. Use it instead for quick, informal questions and leverage Skype’s ability to almost instantly connect with another person.
• Increase Frequency of Verbal Check-Ins
  Ask people how they are doing and if they understand more. Experiment to find the wording of the question that works for you. Rob Kelly talks about using the question “How do you feel?” more often. I use “Does that make sense?” during discussions.
• Use Online Services
  Put everyone online. Services exist for syncing files, bug tracking, project management, source control, web conferencing, conference calls, screen recording, usability testing and so on.  Some services we use include Codesion for Subversion source control hosting, Liquid Planner for project management and FogBugz for bug tracking.
• Use a Virtual Phone System
  A virtual phone system allows you to map phone extensions to any phone number. Advance features allow callers to dial by name, get placed into a phone queue or get recorded answers back from a phone tree. We use Grasshopper.
• Meet In-Person Occasionally
  I know it’s ironic, but I’m a fan of in-person meetings for virtual teams. In-person meetings help build team cohesion and trust and can help people get to know each other on a deeper level. But they are by no means critical. I’ve had great team members that I’ve never met. Bringing everyone together once a year may cost a little, but it’s still often cheaper than paying local salaries and rent, and increases the efficiency of your team.

I’ve also been tossing the idea around of getting everyone on a team a graphics tablet so it feels more like a white board when you’re brainstorming online. Using Skype with a headset has also helped a lot.

A Word About Jobs

Outsourcing has become a dirty word. And isn’t “virtual teams” just another name for outsourcing?

People will say Boston needs to hire locally to improve the economy. But protectionism doesn’t work. The same bias against hiring remotely causes great talent in Boston to move out to Silicon Valley to get an on-site job there. Changing the culture of tech startups everywhere can help Boston retain this talent in the city.

But it goes further. Virtual teams help create an awareness of the resources Boston has to offer all around the world. Which brings business to Boston. I don’t live in Boston and never have. But several years ago I learned Boston was the Silicon Valley of the East Coast and while my company remains based in Asheville, North Carolina, our law firm is Foley Hoag and our accounting firm is Katz, Nannis + Solomon, both based in Boston. And I come to Boston once a quarter for face-to-face networking, helping add money to the local economy.

Rather than fear the loss of jobs that might occur, think of the growth that could occur if Boston startups starting using virtual teams. When you have people like Brian Halligan from HubSpot saying “The inability to recruit enough bright software developers is definitely a governor on growth,” it’s time to stop limiting the growth of Boston companies and start hiring remotely.

In Conclusion

I don’t claim that virtual teams don’t have their challenges. Nor even that the pros outweigh the cons. Instead, as research has shown, only that virtual teams can be as effective as on-site teams. And during a localized talent war, where company growth is being limited by the availability of local developers, exploring the idea of virtual teams makes sense to me. They aren’t easy and aren’t a silver bullet, but they can be effectively leveraged if you practice building and managing them.

I’ll continue the discussion this Friday at the MassTLC Innovation 2011 unConference. Please join me if you are attending. In the meantime, if you have ideas, comments or questions, please add them below.

Further Reading

Virtual teams have been studied extensively, with sets of best practices built up. If you’re interested in reading more about virtual teams, check out:

• MIT Sloan Management Review: How to Manage Virtual Teams
• Building Trust in Virtual Teams
• 10 Inside Tips Of Leading A Virtual Business (From The CEO of #1 Purely Virtual Co.)
• 5 Tips On Managing Virtual Teams (From A Virtual CEO)
• The 8 best collaboration tools for virtual teams
• Software For Virtual Teams
• Virtual Teams: A Review of Current Literature and Directions for Future Research

What has your experience been like working on virtual teams? What best practices would you recommend?