In a market fraught with uncertainty, many companies have focused on cutting expenses and increasing productivity and efficiency as a way to stem market share losses and reverse downward sales trends. This often means downsizing and reorganizing to reduce labor costs, eliminate redundancy, and better target scarce resources. In the process, offices have been closed, divisions and departments merged, employees dispersed, and leaders challenged to manage wider spans of control — often covering multiple locations. In the changed global business landscape, gaining competitive advantage will depend in part on the ability of business units, divisions, and functional departments to collaborate successfully across a whole new set of boundaries.

Collaboration, however, does not necessarily occur without thought or effort, even among people separated only by a floor or a cubicle wall. Teams, the workhorse units of the organization, are increasingly “virtual,” consisting of people working across space, time zones, and often cultural boundaries. As virtual teams become more and more a reality for growing numbers of people, leading them effectively is critical for companies wishing to exploit the opportunities for achieving high-priority business goals.

The Benefits and Liabilities of Virtual Teams

According to a 2009 study by MIT’s Sloan School, well-managed virtual teams can potentially outperform teams sharing a location. The benefits of virtual teams include:

• Integrating diverse knowledge and skills to drive innovation, address complex tasks more effectively, and make better decisions
• Reducing costs due to eliminating overlapping functions and sharing of best practices
• Sharing knowledge about different products and markets
• 24/7 productivity by teams working across global time zones[1]

To achieve these potential benefits, however, leaders need to overcome liabilities inherent in the lack of direct contact among team members and managers. Team members may not naturally know how to interact effectively across space and time. They need strong team skills such as setting goals, sharing responsibility for getting things done, and providing mutual support. And they need smart leadership to make sure they can leverage those skills in a virtual working environment. Without team skills and effective leadership, a virtual team can become ineffectual and dysfunctional. Problems can include:

• Difficulties in communicating and understanding one another, resulting in a lack of common ground, trust, and shared responsibility
• Failure to develop task-related processes such as setting clear goals and standards
• Inability to collaborate in a way that takes advantage of different perspectives, knowledge, talent, and expertise
• A lack of full engagement and commitment by all team members to deliver their best performances when completing tasks and progressing toward team goals

Leaders accustomed to observing and interacting with their people face-to-face often find it difficult to coach, motivate, and otherwise manage a dispersed team to achieve the highest possible performance. So how do leaders adapt to overcome barriers and lead effectively from a distance? 

Leadership Strategies for Virtual Team High Performance

While many of the same management practices that are effective with co-located teams can be applied to virtual teams, some important adaptations need to be made to address the unique challenges faced by teams working together virtually. Managers facing these challenges should consider these strategies:

1. Keep all team members in close communication.

Creating a sense of team is a critical success factor for any team, but especially so where members can’t interact with each other directly. Regular communication among all team members is essential to bringing people together and fostering a sense of inclusion, while providing ongoing opportunities for input and influence. In some cases, there may be a core group at one site while other team members are located elsewhere, making it even more important to ensure off-site members don’t feel out of the loop.

Whether using teleconferencing, e-mails, web meetings, video conferencing, or the many emerging networking media to stay in touch, team members need opportunities to participate, share ideas and work outputs, and get to know each other regardless of where they are located. This regular contact helps build trust and confidence among team members, despite distance, time zones, and differences in culture.

2. Create a collaborative mindset.

In a hierarchical organization, competition is often tacitly or directly encouraged between individuals, departments, and divisions. The result can be a win–lose mentality that damages the ability to work together for common goals. Within work groups, competition is sometimes replaced with cooperation. Cooperation can be positive, but sometimes creates a “let’s get along” culture leading to suppression of valuable opinions and different viewpoints and perspectives, and a lack of willingness to confront tough issues.

A collaborative mindset brings together the best of competition and cooperation, fostering respect for all team members’ interests, talents, and expertise. It also allows for vigorous discussion of differences while encouraging a focus on mutual gains and shared goals.

3. Clarify the team’s purpose and goals.

All teams need to understand their reason for being, but this is even more important for virtual teams. Members of the virtual team need to understand what contribution the team is making to the larger enterprise, what specific results are expected, and how they contribute to the team as individuals. Without this clarity, team members are unlikely to become fully engaged and focused. Knowing their purpose not only enhances team identity, but also creates energy and a sense of urgency even when virtual team members are acting individually to carry out tasks and assignments.

4. Establish clear performance standards.

Again, every team needs to have performance standards and expectations, but this is particularly vital when the manager is unable to observe behavior directly. The team needs to understand not only what they are going to achieve, but how they will achieve it. When people come from a diverse set of experiences, functions, and possibly even divisional or geographical cultural backgrounds, it should not be assumed that they all share the same perspective about what constitutes quality or excellence. This is an opportunity for the leader to set benchmarks, suggest sharing of best practices, and encourage the team to clearly articulate standards by which their performance will be evaluated.

5. Adapt coaching strategies for distance management.

Effective coaching is a challenge for most managers, but especially so when they lack the opportunity to observe their team members carrying out tasks and interacting on a regular basis. Nonetheless, coaching is as important, or more so, when the team is dispersed. Leaders of virtual teams need to set individual and group expectations, monitor the team’s progress, and give feedback, just as they would if everyone were sharing the same location.

Adaptations include making virtual observations of performance by evaluating work outputs and deliverables such as:

• Documents and reports
• E-mail communications to team members and internal/external customers
• Contributions on team conference calls
• Sales quotas achieved or customer satisfaction ratings

Leaders should also plan regular feedback for the team in a group environment such as a web meeting or conference call, as well as for individuals via phone calls, e-mails, and other channels of communication. When possible, occasional face-to-face meetings with individuals should be arranged to allow for more personal connections.

6.  Celebrate milestones and successes.

Feeling like a team means not just working together but being recognized for team members’ sacrifices and accomplishments. Leaders of virtual teams have a great opportunity to reward the team for high performance, reinforcing the collaborative mindset and the sense of being part of something larger than oneself. Participatory celebrations are especially valued by team members who are isolated from other members or when the only recognition for their team contribution comes from a remotely located manager. “Reward the group and the group will reward you”[2]

Although growth in the number of virtual teams may have been accelerated by recent downturns in the economy and corporate responses to those declines, the trend in this direction was already underway. It is safe to say that virtual teams will likely be the norm for many people, if they are not already; and many, if not all, leaders in larger companies will eventually have the opportunity — and challenge — of managing a virtual team.

By adopting these clear, tangible strategies, leaders who manage at a distance can overcome performance barriers that result when teams cross time, distance, and culture. Their teams and companies will be positioned to leverage the efforts and talents of diverse teams, working together to create a source of advantage in a global marketplace where the rules of competition are constantly changing.

[1] Frank Siebdrat, Martin Hoegl and Holger Ernst, “How to Manage Virtual Teams,” MIT Sloan Management Review Summer 2009
[2] Philip Evans and Bob Wolf, “Collaboration Rules,” Harvard Business Review July–August 2005