I've done a couple of talks recently where the subject of virtual companies has come up.
Having lived this in several jobs and now several portfolio companies, I have some fairly strong views on this.
Individual contributors can make an enormous impact on a company when the company and individual clearly identify the work, objectives, and timeframes. With the right disipline, magic can happen. I've seen this work.
On the other hand, virtual companies are tough to manage and, in almost no set of circumstances will it work when the core team is in place A and the senior manager (or managers) are remote. When we've hired senior managers for various portfolio companies, we've insisted they be with the team and not commuting in from another remote location.
Coming in and working 3 days a week, for example, and then working from a home office the other time, has not worked well in the various situations I've witnessed. One CEO was doing it via every other week in Vancouver while living in Portland, OR. Another VP of Marketing lived in Ottawa and came to the Toronto office 2 days a week. In almost all the cases I've looked over the years, rarely does it work.
Business Week runs a column by Jack Welch and he spoke of this in a recent issue:
Good observations.
On the other hand...
How many start-ups have their CEO based where they are but expect him to be on the road 2 weeks out of every three? I'm not sure this is so different in practice.
Jack Welch is actually an amusing example to see speaking on this topic - he spent many years requiring exactly this kind of travel schedule from the managers under him.
I do think that working with a schedule broken up into full weeks or more is better than the two days here, three days there setup you refer to. I like to be around to both raise an issue and deal with it, with whatever level of intensity is required. Having to drop-kick it into next week often isn't helpful.
Posted by: Neville | May 02, 2007 at 06:51
You make a good point, Neville. I do think, tho, even with a heavy travel schedule, you still have a significant amount of water cooler conversation which, sometimes, revolves around all that travel/speaking to customers.
The Welch thing, heh, what can I say, it got me to thinking.
Thank you for stopping by.
Posted by: Rick Segal | May 02, 2007 at 08:54
"... coming in and working 3 days a week, for example, and then working from a home office the other time..."
To me, that's not being a key part of the startup team. That's being a dilettante. I've worked remotely, and worked for others remotely. It works when you're passionate about and dedicated to the company, and you devote your time appropriately, regardless of where you are physically located.
Remote or local, it doesn't work if you don't dedicate yourself to the company, and are not emotionally attached.
Posted by: Jack Poller | May 02, 2007 at 10:47
My day job (which is turning steadily into a night job, too) I'm the remote leader. Our team is scattered around, including a developer in Brazil.
It's actually a lot of fun, but I can see how it doesn't work. If we had a larger team, I think there would certainly be some problems. I think that one of the biggest keys to having an effective remote work force is being quick to have a Come-to-Jesus with stray workers, and if that doesn't work let them go.
Not everybody is suited for working remote, and it requires a certain amount of dedication on the part of remote workers to not abuse a physically absent leader.
So, I'm 90% in agreement with you Rick, but the other 10% really likes my job. It's great to be able to take a 15 minute break and walk into the other room and hang out with my wife and 7 month old.
Posted by: Jay Shirley | May 02, 2007 at 11:26
Rick, I've been on the flipside of this. I've worked remotely for a startup this past year. Personally, I love working from home. But it does have its disadvantages - mainly in the camaraderie department. Sometimes grabbing a beer & pizza after work (or during an allnight session) can really help a team gel.
ps. you've been dugg:
http://digg.com/tech_news/Leading_Virtual_Companies_Remotely_Does_It_Work
Posted by: Shanti Braford; On Web Apps | May 02, 2007 at 12:08
In my experience, "when the cats away, the mice will play". Not only that but, obviously most people you employ will have had other experiences at other companies and those companies are probably not run the same way you run yours. Corporate culture is essential to growing the company the way you want it to grow. If you are not there to constantly show by example what that culture is, you will end up with the culture of the last company your employees worked.
Posted by: Keith Glover | May 02, 2007 at 13:59
"On the other hand, virtual companies are tough to manage and, in almost no set of circumstances will it work when the core team is in place A and the senior manager (or managers) are remote."
Rick, how about the open source software development projects? Most of them are virtual and they work.
http://en.wikipedia.org/wiki/Open_source_software_development
Posted by: Dimitar Vesselinov | May 03, 2007 at 06:16
Dimitar,
Thanks for stopping by. I agree that Open Source development projects do, for the most part, work in the sense that they are not a bunch of traditional cube dwellers in a bldg. The very nature of the spirit, scope, etc, lend these projects to a virtual world of collaberation. Not sure it applies to much of the non-open source world but it sure would be nice if it could.
To be clear, I am still a hopeful fan of people working on the beach!
Thanks for stopping by.
Posted by: Rick Segal | May 03, 2007 at 06:23
In response to Dimitar's comment about open source, that's actually one of the main points on how to get hired in my team. Being a remote work, there are even more candidates to sift through.
The last guy we hired I immediately recognized purely because his involvement in an open source project. I pushed to get him on board, and we got him on board fast.
Excellent decision. Open Source contributors make good employees, as long as you understand that and don't constantly stuff them with "It belongs to the company" mantra.
So many companies tried to protect 100% of the code, when only 20% of it is for their business. That makes disgruntled programmers.
Six Apart has this right, IMO.
Posted by: Jay Shirley | May 03, 2007 at 07:07
Open Source works because of the passion that contributers have towards the project. It takes a unique talent to be able to get that kind of passion out of your employees.
Posted by: Keith Glover | May 04, 2007 at 03:48
I'm a remote CTO for a small startup. So far it has worked fine. Yes, there are times when I wish was in the office regularly, but when there are urgent matters I fly in, and I try to make 4 regular trips each year, each of about a week where chit chat, food and beer is the goal. I resist moving as there is a goal to setup a dev shop where I live as salaries are around 60% of what they are around head office.
Other members of the team are remote as well, which is why it works I think. It would be nearly impossible for us to have an all-hands meeting without at least 5 or 6 people phoning in.
Proof that it works? We operate out of the cash register, no investment yet and its been 4 years and no one has ever missed a pay check.
Posted by: Nimrod | May 17, 2007 at 08:01