Leadership challenges in globally distributed heterogeneous project teams

Abstract

With a spurt in globalization in almost all industry sectors project teams are increasingly becoming distributed and heterogeneous. The team members come from different educational and cultural backgrounds, with different professional experiences and they operate from different geographies. In comparison to a project team that is co-located and homogeneous, this new team composition poses enormous challenge to the leadership - on how to leverage the team's potential optimally. This paper analyzes the challenges leaders face with such a project team in all dimensions of project execution. This paper also provides guidance on how to address the challenges and drive the best performance out of the team. Emphasis has been given to IT services and consulting project teams that operate in such a model, however, a large part of this analysis is also applicable to projects in other industries.

Introduction – Changing project team structure: necessity of a global heterogeneous team and associated issues

Year 2002: An India-based IT Services company moved out of its comfort zone and set up a development centre for 500 people at the other end of the world, Montevideo, Uruguay to service its clients in Brazil, Argentina, Chile, and Venezuela. Around the same time one of the global top 5 IT Consulting firms planned to set up another development centre for 600 people in Bangalore, India to service its clients around the world.

Year 2006: The IT Services company's development centre in Uruguay has a strength of 1100 people. The company also has development centres in China, Hungary, and Brazil apart from the ones in the North America, Western Europe and Australia. The number of non-Indian staff in this India-based company is to go up to 15% of its workforce this year. On the other hand, the other Consulting firm has created 10 development centres in India with a staff base of 19000 people. In the same year a study in Pharma industry indicate that market for outsourcing projects to identify, test and evaluate potential drugs could reach nearly $7.2B by 2009 and most of these will be directed towards contract research organizations and pharmaceutical companies in India, China and Eastern Europe.

These data points essentially indicate the high volume of projects that many organizations across industry segments are executing with teams that are distributed, multi-cultural and heterogeneous.

In a “Flat World” organizations are spreading out across geographies primarily to tap into available talent and other resources and deliver more business value to its clients. With economies in different countries opening up along with drastic improvement in communications infrastructure, “businesses are being challenged to speed up, slim down and become more nimble.” (Friedman, 2005)

Other factors that are driving the organizations towards such distributed project teams are:

• A flexible environment can foster productivity and attract talent
• A global team can follow the sun, i.e. it can operate over 24 hours vs. 8 hours of a traditional project team
• Today's business environments require more inter-organizational cooperation and hence the need for distribution of team members at different locations
• Structures in the organizations are increasingly becoming matrix-oriented which require structurally and geographically distributed teams.

In essence, to leverage the new opportunities and grow beyond the traditional market all organizations are moving into global teaming. Such global teams in an organization can be created for different purposes. The most prevalent global teams are Executive team and Project team.

Executive / Management teams are made up of managers who are on the team because of their position in the organization. These teams usually have responsibilities for specific divisions or corporate functions in the organization. In most of the situations team members of such global executive teams by and large demonstrate homogeneous behaviour and predictable action-response pattern and thereby do not risk organization's goals and performance.

In contrast, project teams are created around a specific task – it could be for a fixed-timeline project / product development activity or a production / support activity performing regular ongoing work. Members of the team are selected based on their role and expertise in relation to that task. It is also observed that global project teams demonstrate more issues that impact performance of the project. This paper will focus on issues around effectiveness of such project teams.

A Globally Distributed Heterogeneous Project Team (GDHT) can be defined as a project team where the team members come from different social, cultural, linguistic, educational and experiential background and they work across time, space and even sometimes organizational boundaries. Collectively they are committed to the common purpose of project / program goals and objectives. They primarily leverage webs of communication technologies to communicate with each other deliver the project as a team.

The following schematic shows different possible composition of such a team (Kimble, Barlow, Li, 2000).

Exhibit 1: Different possible composition of a GDHT

A recent study by the Gartner group showed that by 2008, 41 million corporate employees will operate in a virtual workplace at least one day per week (Jones, 2005, ¶1).

Apart from expanding market access and leveraging a larger workforce base across the world the organizations also gain on various other aspects from a GDHT. Some of these are:

• Developing and spreading better practices faster
• Connecting “islands of knowledge” into self-organizing, knowledge sharing networks of professional communities
• Fostering cross-functional and cross-divisional collaboration
• Increasing ability to initiate and contribute to projects across organizational boundaries.

However, these benefits outweighs the several challenges of GDHTs. While technological support for GDHT and opportunities for collaboration among team members have increased over time these teams do pose risks if organizational leadership fail to anticipate the challenges of the new environment (Piccoli, Ives, 2000).

The primary areas of concerns with the performance of GDHT are:

• Unquestioned assumption of “death of distance” and the “end of geography” (Kimble, Barlow, Li, 2000)
• Constraints imposed by time difference between 2 locations
• Ineffective communication due to lack of non-verbal cues which typically make up more than 60% of a message's intended meaning
• Difficulty in imposing group norms
• General increase in ambiguity in communication process.

In the following sections these issues are analyzed in detail, research works in these areas are reviewed and specific cases are discussed. Towards the end some evolving practices and strategies are highlighted.

Reviewing real-life examples, past research work and case studies

A significant amount of research has taken place in the areas of efficiencies of a GDHT. The focus of these research and analysis work ranged from human behaviour, leadership, organizational practices, knowledge management, improvement in communication technologies and cultural differences around the world.

Kimble, Barlow and Li (2000) have evaluated “Community of Practice” (CoP) which in simple words means a group of people who are peers in the execution of a project, have a common sense of purpose and a real need to know what each other knows. Based on the studies conducted on a set of project teams it was found that problems associated with virtual teams can be addressed through CoP approach which emphasizes on personal relationship. Members used standard communication mediums like telephone conferencing, NetMeeting and emails during project execution. Occasional face-to-face meeting helped team members pick up the momentum of bonding, i.e. team members gained a greater feeling of identity and common purpose through knowing each other.

Piccoli and Ives (2000) focused their analysis on managerial behaviour and different control mechanisms that prevails in the organization. The different control mechanisms are:

• Output Control: Organizations can accurately quantify output and control is through objective output measure.
• Behaviour Control: Organizations have knowledge of different behaviour patterns and the outcome from the same. In such cases the control is through moderation of behaviour of team members.
• Clan Control: Organizations socialize individuals to such an extent that they internalize the values and objectives of the organization.

While many researchers proposed a more self-directed team approach in GDHT, Piccoli and Ives suggested that such self-directed teams may introduce decreasing sense of overall responsibility and a lack of accountability. Instead they recommended managerial behaviour control which can stimulate higher level of communication and coordination.

Hofstede, Vermunt, Smits, and Noorderhaven (1997) in a position paper explored the decision making process in such GDHTs through a set of experiments. They looked at cultural dimensions and group decision support systems, i.e. methods that are available to resolve a complex problem. Their hypotheses stressed that:

• Communication clues that fit the participants’ national culture play a key role in successful decision making
• While asynchronous technologies (e.g. e-mail) are successful media during creative phases of decision making, synchronous technologies (e.g. face-to-face meetings, tele-conferences) are the most successful media during choice phases of decision making.

In 2003 a semiconductor company decided to distribute its team of hardware and software engineers in one division across the Atlantic. The company knew that it was necessary to pay attention to factors like language, culture and trust in order to get the productivity of the previously co-located team and introduced processes like single software manager, weekly task report, delivery report, new communications tools like Instant Messenger / NetMeeting and Quarterly face-to-face meetings. While some of the new processes did help the organization, there were many unexpected temporal problems that impacted productivity and team morale. Some of the issues this project identified were:

• Communication tools were not as effective as hoped
• Communication levels did not match the ones at co-located levels
• Remote experts led to productivity and trust problems
• Time zone differences led to productivity loss.

The drop in productivity of some team members were taken care of by other experts in the team, but that resulted into work-life balance issues and loss of morale (Fitzgerald, Boland, 2004).

The author of this paper conducted a survey among professionals in the IT industry who have experience in working in GDHTs. Some of the key issues that emerged during initial days of project execution (Forming and Storming stages) are around the following areas:

• Underestimating the fact that team is distributed, multi-cultural and needed special attention during “Forming” stage
• Getting the right mix of people on-board – it's difficult to judge one's ability and depth of experience remotely
• Communication barriers - accent, usage of terms/sentence formation etc are different for people from different nationalities (e.g. common phrases related to baseball or football used by North Americans during conversation may not be understood by Asians)
• For a team that is heterogeneous from professional background the alignment for common cause (e.g., business process, technology and delivery) is normally minimal.

During steady-state execution (Norming and Performing stages) the challenges have been more around cultural conflict:

• Communication in general - language skills, interpretation of language and local accent
• Location, time zone constraints – impacts work-life balance of individuals from some part of the world
• Religion-specific issues, e.g., some Arabic nationals pray several times a day and cannot attend meetings in those times
• People from different cultures put different premium on their after-work hours / weekends and thereby are less / more flexible to project's needs
• Value systems of team members can different – e.g., some cultures don't have strict respect for schedule and time whereas in other cultures people can be extremely hierarchy-oriented
• Different personal reference patterns, lack of open minded-ness for other cultures
• Being unaware of personal culture push - one ‘imposes’ his or her own culture/habits etc. on others without recognising it
• Holidays and local events – can impact overall team productivity during certain periods (normally very little gets done in the US/Europe during Christmas and similarly things don't move in South/East Asian countries during Chinese new year)
• Many people (some from specific cultures) have difficulties to share bad news or report a problem - not sharing however is much worse because it creates a mismatch in information levels between team members in different locations and at the end it impacts the final project output
• Motivation factors tend to be different in a multi cultural team – e.g., India-centric team members are normally motivated to a great extent by promotions and titles whereas teams from the West are motivated by benefits a company can offer (vacation, insurance) and pay hikes
• Adaptability to other culture varies for people from different nations – most of the people from India and China due to their high exposure to Western culture can adapt better in the Western environment, but they may not adapt well with each other.

The survey also looked at how advances in communication technology helped resolved some of these issues. However, the participants felt that technology does not resolve issues arising due to personalities and cultural aspects. Technology also doesn't provide a complete equivalent to personal presence - for example, body language is not something that can be monitored for fine-tuned interactions. Also time difference impacts the use of these technologies. For example, conferencing with teams from China, India, US and Canada implies 4 different time zones and one team or the other has to compromise long work hours to get on to such synchronous communication.

In one of the projects in the author's portfolio in 2005 a project team was formed with members from India, USA and China to deliver a software system to a client in the USA. The project was on advanced technology and had extreme tight deadline. To leverage from co-location the Chinese team was flown into India to work closely with the India team. However, very few of the problems got resolved due to communication barrier and culture issues in the team. While some team members were good programmers they were not willing to going the extra mile in the interest of the project. On the other hand there were many other developers who failed to collaborate effectively with their counterparts from other countries.

Evolving best practices, strategies and tactics to address the challenges

Hughes, Ginnett, and Curphy (2002) referred to five major areas that needed change if global teams were to work effectively:

• Senior Management Leadership
• Innovative use of communication technology
• Adoption of an organization design that enhances global operations
• Prevalence of trust among team members
• Ability to capture the strengths of diverse cultures, languages and people.

The following section will address 3 aspects of a GDHT's effectiveness:

• Critical role of Organizational Leadership
• Adherence to process and framework
• Leveraging Communication Technology.

Critical role of Organizational Leadership

Managers and team members across the world demonstrate a wide range of behaviours on similar stimuli as described in the following exhibit (Fretty, 2006).

Exhibit 2: Comparative leadership characteristics across the world

Leadership plays a key role in improving the effectiveness of GDHTs. In several occasions leadership takes it for granted that the team members will work with each other to achieve a project's stated goals. The critical factors which organization leadership must take into consideration are:

• Identify the right team members at the outset
• Acknowledge the fact that each team member has unique life experience and this influence team dynamics – knowing team members more professionally and personally helps
• Invest in improving the level of ‘professionalism’ of people
  • It is essential that a global professional environment is introduced early in the process of team formation
  • While introducing and promoting a common culture is desirable, it is necessary to make people aware of cultural differences and how they could impact a project
• Introduce positive practices like
  • Attitude change from re-active to pro-active - not just solving problems, but preventing problems from occurring / emerging
  • Promote openness among team members so they can better align for common goal of the team and corporation
• Avoid setting up a team with a greater leaning towards one culture (ethnicity, country, linguistic background) and maintain an even distribution if possible - absence of this will lead to closed groups and isolation
• To foster better bonding plan project kick-off meeting over video-conference / face-to-face and follow up face-to-face interaction at periodic intervals
• Proactively define a culture for the team instead of team members deciding on / sticking to their own styles
• During steady state, maintain team cohesion through fostering a “high-trust” culture and frequent communication among team members.

Adherence to process and framework during execution

While Organizational Leadership plays a key role in forming and driving a high performing GDHT, a well-defined process and execution framework is essential for the team members to perform at their best and collaborate well.

Ginnett had developed a Team Effectiveness Leadership Model (Ginnett, 1996) (TELM) which can be deployed in GDHT scenario. The model takes a system approach comprising of inputs (individual, team and organizational factors), processes (i.e. what one can tell about the team by actually observing team members at work) and outputs (i.e. how well the team did in accomplishing its objectives).

Organizational Project Management Maturity Model Knowledge Foundation (OPM3^®) is another model from the Project Management Institute (PMI^®) which can potentially be utilized effectively to define the operational framework of GDHTs. Organizational project management focuses on the clear correlation between an organization's capabilities in the management of projects, programs and portfolios and its effective implementation of strategy, which directly impacts financial results. OPM3 has three interlocking elements, Knowledge, Assessment and Improvement. These can be used to improve the effectiveness of a GDHT as described below:

• Knowledge
  • This element can be used to capture and understand best practices in a GDHT
• Assessment
  • Assessment can be used for assessing the maturity level of the organization to operate in a GDHT
• Improvement
  • This element can help organizations achieve the capabilities leading to each best practice, and identify approach for progressing from current maturity level.

While TELM and OPM3 do offer frameworks for improving effectiveness of GDHTs, the real examples of deployment of such process models is yet to be seen.

In absence of any specific operational framework for GDHT it is recommended that best practices in Project Management are adhered to while managing a project with GDHT.

Leveraging Communication Technology

Improvement in Communication technologies over last 2 decades has enabled organizations fostering more GDHTs in all industry segments. However, it must be noted that technology can not nullify the distance and can never address the cultural issues. If a project can't be managed from a co-located environment, it can't be managed through a virtual team with help of communication technologies. At the same time project teams can look at the different tools and options for better performance.

Typical synchronous and asynchronous communication media include e-mails, shared file servers, NetMeeting, tele-conference, video-conference, web-based conference etc.

Some of the newer forms of communication which can improve the productivity of the team are (Mentrup, 2006):

• Blogs - a publicly accessible journal on the web
  • Blogs can be utilized beyond the original intent – a personal online diary
  • While e-mails can be cumbersome to keep track, blogs can help employees get up to speed quickly
• Podcast - a method of publishing audio files to the internet
  • When synchronous communication like tele-conference cannot address the need of the project teams, Podcast is an option
• Screencast – a recording of computer screen output combined with audio narration and published as a video file
  • When synchronous communication like tele-conference cannot address the need of the project teams, Podcast is an option
• Wiki – a collection of web pages that can be edited by a group
  • The collaborative power of sharing and editing content on the web can be leveraged effectively by a project team for all intra-project communication, sharing work-in-progress documents and other artefacts.

Apart from technology choices, the other factors that need to be considered are:

• If all team members have access to all relevant technology – if some one is using a slow-speed connection then a web-conference will be completely ineffective
• If all team members are comfortable using the relevant technology – in a GDHT scenario, exposure to new technologies can be different and unless team members are comfortable, the utilization will be low
• Groupware technologies are not always plug-and-play and require integration with organization processes and other technologies in the organization.

Summarizing – the future ahead for project management leaderships

The practice of project management is going to be increasingly complex from human resources angle in the coming years. Though it is true that the global work force will mature to be truly “global”, interpersonal relationship, cultural behaviour patterns, different professional / educational background of the team will potentially bring down the effectiveness and productivity. It is essential that the leadership acknowledges the challenges and address them through a 3-pronged focus - on leadership, process and technology.