Virtual Management

Virtual management is a growing phenomenon in today's business world. It is becoming more and more unusual to find an organization that does not have some "virtual" aspect to it. In fact, sales teams have been virtual for decades. They just didn't have such a fancy title! Traditionally, sales organizations have been scattered around the country or the globe, with salespeople spending a considerable amount of time either driving or flying around their assigned region. With the advent of newer and more mobile technology, virtual management is a growing trend in service as well as sales organizations.

The Need for Virtual Management

The need for virtual management and geographically dispersed teams continues to increase for many reasons, including these:

* Financial considerations

* Geographical diversity

* Faster time to market

* Pressures of the global marketplace and economy

From a financial perspective, it makes sound business sense for many companies to take a decentralized approach to their organizational structures. Outsourcing saves U.S. companies millions of dollars per year. The costs to hire in the United States are much higher than in countries such as India and China. The costs of healthcare and workers' compensation in the United States have also continued to increase, at a time when many companies are under pressure from shareholders to cut costs and increase the bottom line. Outsourcing to reduce short-term workforce costs may affect the U.S. economy in the longer term, but for now, it is a very attractive option for many companies.

Moving to a model where more employees work at home can reduce facility costs significantly. The costs of leasing and maintaining corporate office space can be very high. Additional costs like onsite gyms, cafeterias, kitchens, and parking increase the overhead even more. Removing the need for employee relocation packages can also save many thousands of dollars. A company with a network of employees across the country or the globe can quickly and inexpensively get employees to a particular geographical region, as needed.

A workforce that is geographically diverse can be a huge business benefit in less tangible ways, too. Companies tend to like working with other companies that have local representatives. A U.S.-based company with employees in Brazil, Japan, and Italy who are natives of those countries or speak the local language fluently has a strong competitive edge in those countries over solely U.S.-based competitors. Moving into new and emerging markets is also much easier when a company has someone local who understands the political, financial, and corporate landscape.

Needing everything faster used to be something unique to the United States. With globalization, however, worldwide fast food and drive-throughs have whetted the appetite for faster, cheaper, and better everything, no matter where in the world the customer is located. In today's fast-moving and ever-changing business environment, companies are increasingly demanding more speed without affecting quality or price. This demand requires that highly skilled and effective teams be created quickly without regard to time zones or locations. The ability to work together just as effectively while geographically distant as when local makes this possible. If a company had to relocate an entire team to one location, find accommodations, and pay expenses, it would be very difficult to move quickly, and almost impossible to do so without passing the costs on to the customer.

Globalization has increased the need for virtual management. Working in an international market space is easier than it has ever been before. However, along with this ease of conducting business internationally comes the challenges of working with cross-cultural teams and the need to understand and overcome cultural and language differences.

From a high-level management perspective, global business and virtual management are the answers to many business problems. A company can increase its geographic footprint and more effectively do business in multiple countries. At the mid-management level, however, these business advantages are not as clear. In some instances, they are positively hazy. On a day-to-day basis, for managers dealing with employees or associates in remote locations, who have different cultural backgrounds, work ethics, and languages, the virtual solution can create more problems than it solves.

Even in teams that are located in the same geographic region, at least one team member often works remotely. This person might work remotely because he or she did not want to relocate; because there was no requirement to work locally with the team to be able to do the job; or because the hiring company felt there was some benefit to having the employee located in the specific region in which he or she lives. Relocation packages can be prohibitively expensive, so the ability to hire the best people without having to relocate them is a huge financial benefit. In addition, the ability to hire employees without having to supply office space to them is a great way to decrease overhead costs and improve the bottom line. The cost of office space, electricity, equipment, parking spaces, restrooms, kitchens, cleaning, etc. can add up to a hefty expense.

While the trend toward virtual teams is destined to continue for the foreseeable future, there is currently a distinct lack of virtual management expertise across all industries. Managers who learn virtual management skills will help their companies avoid a rocky road.

The Differences between Virtual and Traditional Organizations

A virtual, or remote, company is any company that has at least one team member working remotely. Team members might be working as close as in the same city, or as distant as across oceans and time zones. A traditional company is one in which all team members work in a single office location.

The Traditional Organization

There are, of course, many different types of traditional companies and teams. They operate in different ways, with different management structures and organizational hierarchies. The traditional company might be a large national organization with thousands of employees, or a small start-up with less than ten employees. The company might consist of team members from one cultural background or from many. Some traditional companies might be comprised of primarily native English speakers, while others might be dominated by foreign nationals who are non-native English speakers.

While recognizing that these are huge...