The reality of virtual management


The millennium with all its technological advancements has unveiled a new management approach, virtual management. Just recently I was talking with a project manager who has never seen his project team. I also hear of salespeople who make sales without ever seeing the customer. A major company recently closed down its offices to save $1 million per month; every employee now works out of his or her home. With more employees telecommuting or working directly from home offices, new rules are developing. New challenges are also surfacing without the security and familiarity of brick and mortar. A virtual organization is not “business as usual.” It requires a new management approach and an incredible awareness of the issues and challenges that could cause its demise.

In an article, “Size Matters” featured in Inc. Tech (Pape, 1999) there was a case study of a start-up that succeeded as a virtual company. There were many similarities to the start up of our company, so the article attracted my attention. The article features seven tips to ensure success. Most of these tips have been explained throughout this paper but the resounding commonality reinforces that these are “must do” for successful virtual management. The seven lessons learned from AgInfoLink Inc. were:

  1. Place your limited personnel near your customers
  2. Get an intranet going as quickly as possible
  3. Have face-to-face orientations
  4. Understand the power of two
  5. Train employees in productive email use
  6. Stamp out rumor wildfires
  7. Realize the power of communication.

There was a recent study conducted to see what were the attributes for successfully leading global virtual teams/organizations (“Leadership Effectiveness in Global Virtual Teams,” Kayworth, Leidner, IN-SEAD, Mora-Tavarez 2001). In this study 13 culturally diverse global teams from locations in Europe, Mexico, and the United States were assigned a project leader and a task to complete. The findings suggested that effective team leaders demonstrate the capability to deal with paradox and contradiction by performing multiple leadership roles simultaneously. Specifically, it was discovered that highly effective virtual team leaders act in a mentoring role and exhibit a high degree of understanding (empathy) toward other team members. At the same time, effective leaders are also able to assert their authority without being perceived as overbearing or inflexible. Finally, effective leaders are found to be extremely effective at providing regular, detailed, and prompt communication with their peers and in articulating role relationships (responsibilities) among the virtual team members. This study provides useful insights for organizations interested in developing virtual organizations and teams.

Last year an analyst from Giga Information Group interviewed me. The analyst knew that I was involved in building a virtual organization and was inquiring as to whether my company could validate the value and techniques for managing distributed groups. Unfortunately, I could not provide hard data—just hard-core experience.

Giga's position on managing geographically distributed organizations is that it can be effective but it can be more difficult than managing traditional organizations. There is little empirical research about this and it is their opinion that most studies praise the merits of virtual work teams/organizations because they are based on participants' perceptions and/or those of media observers—and these are not necessarily objective. Giga does believe that “virtual” teams are here to stay as complements to face-to-face meetings and as a reasonable means of providing expertise when travel is impossible. Others, such as Frances Cairncross, Senior Editor for the Economist, support this view as well. Ms. Cairncross predicts that soon people will organize globally on the basis of language and three basic time shifts. However, there will be greater self-policing of businesses and a loss of personal privacy.

What Is the Reality of Virtuality?

Undoubtedly, the primary benefit of a virtual organization is that it can unite highly qualified people without location restrictions. Other reasons that an organization would want to consider being virtual rather than traditional are the ability to:

•   Leverage skills throughout the organization

•   An employee from the California office can now “work” virtually in the New York office with the New York team. Teams can have dynamic memberships.

•   Provide customers with the “best and brightest”

•   The Dallas Museum of Art wanted the best Director, and ended up hiring a woman from Switzerland to work remotely.

•   Conserve Environmentally

•   If 10% of us telecommuted, we would be driving 24.4M miles less, breathing air with 13K tons less air pollution, and conserving more than 1.2M gallons of fuel/week.

•   Balance the work/home relationship

•   This was recognized as an early benefit (1963) when a programmer on the Arpanet project (the precursor of the Internet) needed to work from home to care for his pregnant wife, who was bedridden. He worked from home on a Teletype machine. This flexibility has increased employer satisfaction and has been an invaluable recruiting tool for companies.

•   Save organization overhead costs

•   Offices can be consolidated and “hoteling” can be implemented. (Pacific Bell by “hoteling”—saved $9M first year and $3.1M in years 2–5).

•   Prepare for Disasters

•   September 11th made employers in the United States aware of another benefit of virtual workplaces. Employees in the destroyed World Trade Center were able to work remotely and keep operations running in some affected companies.

With all of these wonderful benefits, why is a virtual organization at a greater risk of failure?

The Challenges of Virtual Management

Last year, I conducted a focus group represented by 20 members of a single virtual organization, but located at numerous site locations and recorded the following challenges:

•   Communication

•   Trust (leadership/management)

•   Knowledge transfer

•   Processes

•   Infrastructure.

The two major issues noted were Communication and Trust.

Communication Issues

Issues within communication were:

•   Responsiveness

•   Effectiveness

•   Too many assumptions

•   Being taken by surprise

•   Wasted Admin time

•   Trust

•   Corporate Connectivity.

If you want to succeed, good communications must evolve into excellent communications and become a core competency when managing a virtual team or organization. In the virtual organization represented within this focus group, there is actually a Communications Director who has developed numerous communication vehicles, including: an intranet with capability of sharing files, a weekly electronic newspaper, a monthly “paper” newsletter, an electronic Newsblast and Company Current, and monthly “brown bag” knowledge sharing sessions, as well as face-to-face group, team, and leadership meetings.

In addition to all the extra programs and vehicles provided by the organization, virtual employees must “go the extra mile” to keep others informed. Those working in a virtual environment may never meet face-to-face, may never have the opportunity to bump into each other in the hallway to bounce ideas off each other. This lack of proximity inhibits the effectiveness of team members to communicate and retards the natural development of any team or organizational cohesiveness. It is a culture shift for many and critical to their personal and professional growth in a virtual organization. The organization and the employees need to become active and constant communicators. Management in any virtual environment must provide and evangelize technologies (enablers), which will fill the gap of distance and time zones.

For successful virtual management, communication is twofold. In my situation, it took me over a year to realize that communication must be varied in tone and distribution vehicles, and must be repeated at least seven times in some form or fashion to really be effective. Face-to-face contact can never be eliminated. It provides an opportunity for others to feel your sincerity, to produce urgency for their deliverables, and to develop an understanding of context, which is critical on certain projects that may have a subtle “political” focus. To make virtuality work, a skilled manager must match the medium for communication to the type of information being shared.

Another area to address if you are trying to promote strong communication skills within your organization is the education of employees on the weight “perspective” plays on sending and receiving messages. For example, if asked to respond to “Why did the chicken cross the road?” a “Keep It Simple” perspective might respond with “to get to the other side.” A “Scientist” perspective might respond with “it's the nature of chickens to cross roads”

Issues in communicating have to be recognized and dealt with immediately. Some of these issues for virtual employees might be: techno phobia (a dislike for technology); lack of technical skills (it may not be a communication problem but rather a training issue); software/hardware compatibility (may cause frustration when sharing reports); varied writing skills (since written communication is used more in a virtual environment, varied skills must be recognized); confusion on WHEN to use various channels of communication (might need to educate employees NOT to send emails for sensitive matters but rather pick up the phone; and natural disasters (since we are so heavily reliant on communications in virtual management, a backup plan must be developed to meet something like this head on).

Technological Considerations for Success

For successful virtual management, investing in technology and help desk support is a must. Simple technologies, such as extra phone lines, printers, fax machines, are mandatory. Help-desk support must be beefed up and additional tools and techniques to handle the unique needs of remote workers provided. It took me three year to implement this recommendation and was strictly as a result of growing need, thus validating this recommendation. I only wish I had done it sooner!

Some of the “technologies” that will support effective communication are:

Voicemail—This is one of the most prevalent conduits of communication today. Employees can leave messages and action items for others regardless of time zone or country. Used properly voice-mail can be an excellent tool to better enable team members at communication and effectiveness. However, management must enforce more rigorous policies to encourage “effective communication.” Two examples of these policies are: Daily Change of Voicemail policy (This helps to set expectations by allowing others know your schedule) and a No Blasting policy. Using voicemail in a negative, one-sided conversation will guarantee a breakdown of trust and will foster communication issues.

Email Identifiers—With respect to email, definitions and expectations need to be defined, such as what is the acceptable response time to information or requests. Identifying with priority codes may help again with setting expectations, building trust, and with prioritizing.

Intranet—One of the best things we did when we started the organization was to immediately develop an intranet for enabling and facilitating communication within the company. The intranet allowed us to house corporate policies, procedures, for all to easily access as well as provide a repository of our products, presentations, articles, etc., that employees needed to reference for future engagements. This has actually, in many ways, become our “brick and mortar” for those who work virtually.

Groupware, Videoconferencing, and Workflow Tools—These are tools that our organization has not invested as of yet. The intranet has provided us with the collaboration that we've needed thus far. But these are tools that a virtual organization may want to consider, though, as something that might meet their individual needs.

Effective, varied, and constant communication as well as the technologies, which enable it, cannot be stressed enough as critical success factors for successful virtual management. One area not covered yet, but important to recognize, is that communication either “builds” or “busts” trust … and trust is the glue of the virtual organization.

Trust Issues

Trust comes in many forms and can either grow or be destroyed by the simplest of actions. By responding to an email within an hour time frame communicates, “I hear your concern, and I value that you shared it with me.” Follow-up emails say, “I know I can count on you to do what you say you will do.” As trust develops, there is a sense that you will not share damaging information to others. Nothing destroys trust more than to find out your colleague blind copied your manager on a derogatory email about your performance.

 To build trust, an employee needs to be willing to:

•   Share personal events and prior experiences

•   Show vulnerability

•   Demonstrate loyalty by a commitment to the company's goals

•   Accept others who are different

•   Increase awareness and sensitivity to others

•   Communicate

•   Be open and honesty.

 Things that are “trust busters” are:

•   Sharing information (forwarding) outside of those with a “need to know” without permission

•   Withholding information that impacts the company's or an employee's success

•   Providing vague instructions and critical feedback

•   Using hierarchical channels in lieu of informal discussions

•   Promoting hidden agendas

•   Using fear tactics, public criticisms.

There are actually trust “models” out that identify behaviors through the use of Web-based assessment surveys. Corporations are participating in trust-building programs to foster building effective relationships. One model, The Reina Trust and Betrayal Model, has been developed through work in 67 organizations in 19 industries. This was based upon behaviors identified through statistically valid and reliable assessment surveys from work done in the above-mentioned organizations. The results of this work were published in the 1999 book, Trust and Betrayal in the Workplace: Building Effective Relationships in Your Organization (Reina, 1999).

If we can build the trust factor in a virtual management environment, the benefits are many. There is a better alignment of work efforts and quick exchanges of ideas and information. Collaboration and process improvement are more prevalent as employees feel much better about their jobs. There is even a tendency to pool shared resources in a more collaborative manner, affecting productivity, and financial success.

Case studies show that companies that brought virtual workers together before virtual operations started were more productive. Boeing gathered members of its design team from 12 countries to work together prior to working apart. This team designed and launched the 777 at least 30% to 40% faster than a comparable paper-based design (“The Challenges of Managing Geographically Distributed Organizations,” Cecere/Rosenberg, 1999).

Other Pitfalls to Avoid

Management needs to take proactive measures when dealing with virtuality.

Employee isolation is an area of concern and requires proactive measures. Various mechanisms should be set up to keep remote workers informed of company news. Conference calls, email, and electronic newsletters all remind people they are part of a company that has common goals. A virtual manager needs to be an “amplifier” augmenting the goals that are the most important.

Developing an Alignment Tool that reflects the company's goal to help dispersed workers increase their efforts is a good move. At Ford, the phrase “Quality is job one” connects workers with company goals.

Virtual Personality is required. Hiring self-motivated employees who do not need the social interaction of an office is as important as hiring members with appropriate technical skills.


In summary, when managing a virtual organization, one must:

•   Communicate the mission of the company and how each person's work contributes to it

•   Establish clear channels of communications

•   Be flexible about when, where, and how to communicate with employees

•   Communicate with technology

•   Involve others and follow-up on communication

•   Help members connect with one another (be a role model)

•   Help employees stay connected to the organization

•   Hire the right personalities

•   Use your own technology to support group communication, collaboration, and coordination

•   Establish a process for storing and retrieving critical corporate knowledge

•   Prepare employees with anticipated challenges of IT and personalities

•   Encourage employees to share and seek information from one another

•   Recognize the accomplishments of your employees.

•   Be aware of differences in perspectives and work practices

The advancement of technology has broken the area of virtual management wide open. Challenges do exist with this new kind of management, but like everything else, if you know beforehand what the challenges are, you meet them more aggressively and more prepared. Furthermore, through trial and error, management is learning to manage this type of organization more effectively. I can personally attest to that.



Jude-York, Deborah, Davis, Lauren, and Wise, Susan. 2000. Virtual Teaming. Menlo Park, CA: Crisp Learning.


Bigelow, Deborah. 1998. Do We Really Want a Paperless Office? PM Net-work (October): 17.

Bigelow, Deborah. 2000. The Reality of Virtuality. PM Network (January, 2000).

Bigelow, Deborah. 2000. Challenges to the Virtual Organization. PM Network (July).

Cecere, Mark and Rosenberg, Mark. 1999. The Challenges of Managing Geographically Distributed Organizations. Giga Information Group (April 1999).

Pape, William R. 1999. Size Matters: Can a Tiny Start-Up Succeed as a Virtual Company? Here Are Seven Tips to Help Make Sure That Yours Does, no 3, pp. 31–32.

Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 • San Antonio, Texas, USA



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