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"Virtual teams and networks effective, value-based, swiftly reconfiguring, high-performing, cost-sensitive, and decentralized will profoundly reshape our shared world. As members of many virtual groups, we will all contribute to these ephemeral webs of relationships that together weave our future." 'from Virtual Teams, Second Edition
There are no such things as boundaries in today's work environment. Virtual teams from all over the world use technologies like the Internet, intranets, and groupware to work together on projects but the major drawback to these teams is their high failure rate. Virtual Teams examines the numerous problems that arise and provides you with proven techniques to solve them.
Written by the two leading experts in networked organizations, this Second Edition shows you how to effectively start, implement, and maintain virtual teams in your own organization. Lipnack and Stamps present a comprehensive framework that makes virtual teams accessible and practical, describing the best practices to use in order to make your group excel.
The authors present the 90/10 Rule, which stresses how a virtual team's success is based 90% on the people involved and 10% on the technology. They also take you through the seven steps that every team must complete in order to achieve their results. These include:
Along with the authors' experiences, case studies from Sun Microsystems, Shell Oil, Pfizer, Motorola, Ernst & Young, and others are integrated throughout, offering insights from key executives on virtual teams and adapting to the virtual workplace.
With its in-depth look at this increasingly important way to work, Virtual Teams, Second Edition gives you the tools you'll need to create and build a winning virtual team for your own organization.
What is driving this new way to work?
Continuous, wild change at breakneck speed; new, newer, and newest technology; globalization and localization; and a demand for social as well as financial performance all typify business in the Internet Age.
Like Odo, the Star Trek shapeshifter on Deep Space Nine, work is dematerializing and rematerializing right in front of us. For centuries we've worked primarily face-to-face for the same boss. Now we work virtually across distance and reporting lines.
The global communications web that makes everyone on the planet neighbors--long imagined in science fiction--is in place. Nearly every country in the world has Internet connections (Figure 1.1). Coupled with such connectivity is the sheer complexity of markets and customers. Nothing is simple anymore.
It is now rare that individual companies carry out projects completely by themselves. Our own Internet start-up at its seed stage involves a core group of 10 people surrounded, linked to, and intersecting with 10 times that many more, each of whom has his or her own tens and hundreds of connections. Our project, like yours, crosses internal and external boundaries, drawing together members situated anywhere and everywhere.
Consider Valent Software, the emblem of twenty-first-century business. Its 10 employees never really colocate, yet within three years they turn a $700,000 investment into a $45 million sale to a major web portal. They provide Lycos Clubs, a community-building facility critical to Lycos's success.
Both J. Scott Benson, the CEO, and the company's chief technology officer, Chris Williams, lived in Massachusetts. "[T] he president [Anthony Antonuccio] was parked in Utah, the engineering team [led by Leigh Turner] was based in [Columbus,] Ohio and a handful of other employees worked out of their dining rooms and basements," writes Julie Flaherty in a large feature in the New York Times.
"The 'workplace' consisted largely of cell-phone calls, e-mail correspondence and meetings in hotel lobbies. Except for a small office in Woburn, Mass., that it rented primarily as a place to receive mail, Valent did not have a brick of property to its name."
Or consider the Dutch company that Bart Piepers writes about: "Right now I (Bart) am sitting in [sic] the train. Marcel [Storm, his colleague and coauthor] and I live about 20 miles apart. All the people (about 10) that work for Concept-international in different projects live within a radius of about 150 miles in three different countries. Our goal is to become as international and virtual as possible."
Allegiance to our projects is as strong as it is to our companies. "Who's the boss?" is a good question--if you even have one, or perhaps you have two. You may be part of a small team that sees something that needs to be done--then does it. All of you are leaders in your own domains. Perhaps you all work for different people who themselves cross in ever wider circles of connections. Before long, you may find yourself like the Time Based Notification team at Sun Microsystems, where 60 percent of the members move on to its successor project, the Glass House Gang (see Chapter 5, "Place"). They do their first project on a shoestring and the next with strong corporate investment.
Move in Sun's case is a relative concept. People don't "move" anywhere physically. Instead, trust binds them, as they can live primarily online. This is where the team works. To work on Sun's Time Based Notification team means to go online. Face-to-face meetings become ever more precious and increasingly rare.
The nine-to-five office as we have known it is more often than not--not. Fully one-third of the 25,000 dwellings in our city, Newton, Massachusetts, house white-collar businesses. "White-collar" itself is on the express train to antiquity. What with casual Fridays having crept backward through the workweek, even suit manufacturers are called upon to update their lines. You attend meetings in your pajamas, talk with people halfway around the globe, use insomnia to catch up online, worry about headset not car-seat comfort, and partner with people you have never--and may never--meet face-to-face. An MCI commercial got it right: the woman with "bed head" and in her slippers on a con call dreading the advent of videoconferencing.
Human beings have always worked and socialized in face-to-face groups. Now people no longer must be in the same building--never mind on the same continent--to work together. They belong to virtual teams that transcend distance, time zones, and organizational boundaries.
Ernst & Young International's chief information officer, John Whyte, "cut travel by 35 to 40 percent" with virtual teams. "We were spending well over a million a year." He compensates by breaking up his 100-person, three-continent, globe-circling organization into 10 teams of 10 people each. This unleashed what Whyte calls "lots of cross projects that are much closer to real events." Each team chooses its own ways to work virtually--weekly conference calls (the tried-and-true default communication technology for virtual teams), face-to-face, instant messaging on the Internet, videoconferencing, online whiteboarding.
The use of teams is on the rise, and with a quarter of a billion people on the planet already online, the face-to-face aspect of normal working relationships is changing dramatically.
Until the advent of the web, such ways of working were simply impractical. A few thousand lines of computer code written in Switzerland in 1989 to help out a network of particle physicists--coupled with unprecedented advances in technology--have transformed the world.
The web gives people the unprecedented ability to work together independent of place. Consider the implications of these numbers:
At last, the planet is wired--though "wired" is not entirely accurate either. Much of our interconnection is wireless. Connected, linked, matrixed. We are the future now.
Distance-defying communication opens up vast new territory, unbounded by space or time, for "working together apart." For the first time since nomads moved into towns, work is diffusing rather than concentrating. Officially, we have moved from the Industrial to the Information Age.
Working across boundaries--in partnership over corporate lines with vendors and customers, in alliances with complementary enterprises, and in deals with direct competitors--is the norm.
To test this, play "Name the Competitors" in a big deal or new alliance. Shell and Texaco stations across the street from each other are owned by Motiva (retail East), Equilon (retail West), and Equiva Services, which the otherwise competing majors own together. Bank of America and Robertson Stephens comanage deals, such as the IPO for Internet Capital Group, in which Merrill Lynch is the lead underwriter. GM, Ford, and Daimler-Chrysler set up a joint venture for web-based supply chain management.
There, on the web, business boundaries blur. "Name the Collaborators" is the new game. Lycos, the portal that goes public 10 months after it is founded, 18 is itself a network of 13 other sites. Ask Jeeves a question (you don't need the "http://," the ". com," or even the Jeeves--the three letters ask alone will get you there) and you go to a WebCrawler site with banner ads for AT& T's online billing and Barnes & Noble, each just a finger flex away. Click and you're on a site in Tasmania or Toledo (Ohio) or Toledo (Spain). Place itself has dissolved, a current reality declared in The Death of Distance, the 1997 book by Economist writer Frances Cairncross.
"We don't have all the good ideas in the world," says Hank McKinnell, president and chief operating officer of Pfizer, the pharmaceutical company. So his company has scores of cross-company collaborations with its competitors and promotes intracompany networking. "No matter how effective any one person is," McKinnell says,
When is the last time you worked on a project with only people whose offices or desks are near yours? Boundaries that separate functions and divisions within companies have become porous. People rarely work only by themselves. Even solo, independent contractors spend most of their time working in teams.
The boundary-crossing, virtual team is the new way to work. When General Electric does a late-1990s assessment of critical capabilities for the future, it finds that "the skill of leading virtual teams is the new requirement," according to Russ Baird, head of GE's Six Sigma Quality Training at the corporate Leadership Development Facility at Crotonville, New York. "We zeroed in on the skills for continued success and it became obvious that teams are more virtual than they've ever been and are rapidly becoming more so. Projects are becoming larger with multiple subteams crossing lots of functional as well as geographic boundaries. We have and need very diverse teams to address projects of this scope." Since 1998, GE has been training its famous "Black Belts" in virtual teaming.
Jack Welsh, the company's chairman and chief executive officer, who all but brought the word "boundaryless" into the business lexicon, has made e-commerce the top priority for all the companies in the portfolio before he retires in 2001. His organizational-networking imperative is paying off--GE is the first company in history to report $10 billion in earnings.
With the technology and connections finally in place, we now face the truly difficult part of the virtual equation--the people element. Real groups are notoriously complicated. Anything that goes wrong face-to-face also goes wrong online, only faster and less gracefully. Going virtual is for most people a wrenching experience, both in adapting to new technologies and in adopting new behaviors and working relationships.
Take a typical team, make it virtual, expect trouble. Working across organizational boundaries introduces communications and motivational problems. You immediately need to compensate just to bring the team up to the level of performance of a colocated team--to bridge the virtual gap (Figure 1.2).
There is good news. The steps that teams take to cope with their network nature--using collaborative technologies and designing flexible organizations--not only compensate for capabilities lost, but also establish the basis for extraordinary performance. By solving today's problem of poor performance among virtual teams, we prepare ground for tomorrow's dramatically smarter teams with a virtual edge.
Like GE, many companies--large and small, old-line and broadband-new--are experimenting with different ecologies of people, organization, and technology. Of considerable consequence is how those who had access to collaborative technology from the beginning use it today. A stop on this journey is a company that always has lived by the technology it makes.
Sun Microsystems has been betting on cyberspace since its 1982 inception. The first computer it ever shipped had the basic protocols for Internet communication built into it.
Sun maintains an extraordinary information infrastructure to support its 37,000-person company. What other companies manage with more people, Sun tries to achieve with better and faster communication. Some Sun people say they no longer use paper at all.
When web technology exploded in the mid-1990s, Sun embraced it immediately everywhere. Several thousands of web servers went up in a matter of months all across the company. CEO Scott McNealy's 1995 corporate-wide injunction "to operate on Internet time without compromising quality" set a daunting new standard. The company also launched a multiyear initiative to solve customer problems with cross-company teams, SunTeams (see Chapter 5, "Place").
Looking to the new millennium, the company decides to up the ante for itself again in 1999. Sun will become eSun. All customers will come to one Sun front door on the web: www. sun. com. Everything else will flow from there--from online purchasing for all products to MySun. com, where customers and employees will customize their own ways to work with, through, and at Sun.
The job of "dot-comming ourselves" falls to a Sun vice president and general manager from the field. Al Ormiston is just wrapping up his last special assignment--reintegrating Sun's aftermarket business into another Sun group. SunExpress had been spun off and now the company has brought it back inside. "There was lots of emotion," Ormiston recalls. "Then the world exploded and everything was 'portal this' and 'portal that. ' " The reintegration unwittingly but opportunistically gives birth to the next major change in the way Sun does business.
eSun, now a corporate-wide initiative "to transform the way we do business," begins as an aftermarket online catalog for the System System Products group, following the SunExpress reabsorption. Then Sun's president and chief operating officer Ed Zander asks Ormiston to "take what you've learned and roll it out across the whole company."
The company that promises to "dot-com" everyone else faces a very big challenge. It has to break new ground faster than its customers and its competitors. That means the entrepreneurial models in each of Sun's groups have to be pulled into one set of best practices across Sun. Ormiston leads that charge.
Ormiston describes the early eSun meetings: "Imagine 30 to 40 people in the room with their arms crossed saying, 'I'm here but I don't want to be here.' " Providing "one face of Sun" to customers means consistency across areas that always have been autonomous in the groups--inventory, purchasing, pricing, terms, and conditions, not to mention back-end technology choices that are extremely important to engineers. " They could all do their own thing in the past. It was a real tangled web," but after a few years, Ormiston says, "the web forced everyone to take the same approach. We needed a single web-buying environment." Instead, Sun then had four major divisions, each with its own sales organization and business rules. With eSun, customers come in through the same front end and are guided to the store, the communities, and other Sun services.
To avoid setting up a "central group with a mandate-like structure," Ormiston instead sets up a virtual organization. First he works with each Sun group to name its own eSun vice president, who reports both to the division and to eSun, along with eSun Program Management Offices that have the staffs to maintain them.
"Half the battle is being understood," Ormiston says, so he also asks each division to name a person to the eSun Communications Council. About 15 people from across the company (including public relations, advertising, marketing communications, and human relations) convene. "The idea is 'from our mouth to their ears. ' Their whole job is to be sure that our messaging is consistent," he says. "Every time we have 10 new slides explaining what eSun is, they go out through the council."
The Communications Council owns the eSun site. "We post everything there," he says, "Notes, meetings, road maps. It's the first time that we've publicly put up everything we do and it causes heartburn. We agreed up front to publish a monthly online eBook with the good, the bad, and the ugly so that we can maintain a nonparochial point of view. Collaborative teaming is just beginning to work with all the products."
Communication is intense. The eSun program management officers have two or three conference calls a week. The same group comes together face-to-face for a day twice a month. And the directors from each division meet face-to-face for a day once a month.
How many people does it take to add the e before the company's name? Ormiston estimates that a little more than 1 percent of the company is involved in eSun, 400 in total, with 100 on the business side and three times that many on the information technology side.
"When I came in from the field to do eSun, I assumed that everything would change because the president said so. No. It doesn't work that way when people understand that everything they've been doing for years is going to change or go away."
Even for a company like Sun that's lived by the net since Day One, transitioning to the new world is a challenge. Ormiston calls eSun "a mixed conversation. Some people feel very strongly aligned and some people feel like they're getting run over. There's lots of culture and psychology that goes on. We haven't solved it completely yet, but we're trying."
It's refreshing to talk to people at Sun. They admit that life is difficult in the Network Age and earnestly use their own behavior and technology to improve.
"eSun is the new Sun, and when we're done," he pauses, then continues, "I guess we'll never be done."
Internet speed, indeed.
In a word, it feels different. It's a blurry, messy world and everyone is scrambling to catch up.
The younger generation may have a natural advantage in the new world, but leadership in the morphing business environment remains complex.
"In a networked organization leaders have to use influence and powers of persuasion, which is much more complex and much more challenging than giving orders," says Phil Carroll, chairman and chief executive officer at Fluor Corporation. (Carroll was president and CEO at Shell Oil Company in the 1990s--see Chapter 2, "Networks"). "Young leaders have the ability to operate in this new environment. They recognize that they're not working on the authoritarian model."
Leaders must think differently about themselves, Carroll says. "You are not the source of all wisdom." He calls it an emotional challenge "if you are predisposed to want to exercise leadership from the more authoritarian model. If that's what you want to be, you'll find this other kind of leadership difficult and very frustrating because at times it's slower and not as efficient and you don't get your way. And for some people that is a problem."
Tom Botts, who worked for Carroll at Shell and is now head of Shell U.K.'s Gas Directorate, talks about "unleashing leadership capacity." When he took over as treasurer of Shell Oil Company, he tore down the walls on two floors of Shell's headquarters in Houston, redesigning the space for flow and communication. He did the same thing at Shell U.K.'s headquarters in London nine months after he took on his post there, including removing the walls around his own office. "Doing away with the trappings of power like a big office helps dispel the notion that leadership only rolls down from top," Botts says. "Leadership capacity is buried in the organization and it needs to be unleashed. When you do that, people step to the front with ideas and actions that are pretty imaginative and that others might not have thought them capable of in the past."
Two generations of leaders, old-line company, new thinking.
Robin Abrams, a self-described "gray-hair," has grown up with the Internet, switching courses and careers with the times. Originally a banker, Abrams came to Chemdex as chief operating officer from the presidency of Palm Computing (makers of those handheld devices that people stare and poke at during meetings). Before Palm, she was president of Hewlett-Packard's VeriFone, one of the original virtual companies. (Its product is entirely virtual--the electronic banking system for credit card purchases--and they have created a culture to match.) Prior to Palm, she ran sales on various continents for Apple. Never mind that she has a law degree and a bachelor's in science.
We first met Abrams in 1995 at the launch meeting of Apple's international engineering group in Tokyo. She headed Apple's sales and marketing in Asia and stopped by the meeting on her way from Hong Kong (where she, her husband, and two young daughters then lived) to Apple's Research and Development campus in Cupertino, California. Even though Abrams was riding the crest of Apple's wave in Asia with market share above 20 percent, she dragged her own suitcase behind her through Tokyo's subway maze and jumped into the conversation within moments of entering the meeting.
Eight months after she came to Chemdex in June 1999, Abrams changed jobs again, to the same position in Ventro Corporation, of which Chemdex is just a part. Ventro is one of the new breed of "business-to-business vertical marketing companies." Chemdex is one of the verticals.
Chemdex is a nifty business idea that would be simply unthinkable without the Internet, web-friendly databases, and a sufficient population of people online. It is the ultimate food co-op for the life sciences industry. It allows enterprises, researchers, and suppliers to network in an industry whose supply chain has been classically inefficient. It's hard for suppliers to find their customers; it's even more difficult for the customers to place their orders. Enter Chemdex, which
"Researchers should be inventing, not paging through catalogs," Abrams remarks. By ephemeralizing the process, Chemdex dramatically reduces expenses from an average of "$ 80 to $120 down to $40 to $60 for a purchase order."
Abrams is using videoconferencing more than ever before for interviewing, customer meetings, and negotiating contracts. "I've never done that before, but the customer's time is more precious than mine. You just don't have to do everything face-to-face."
Until Chemdex, Abrams had never negotiated a single contract without meeting her partners face-to-face. "Momentum is so important now," she says. "You don't have six weeks to build bridges." Abrams demonstrates this urgency even in her speech. Equipped with a headphone and typing at top speed using electronic shorthand, it's hard to take down her words as rapidly as she fires them out.
"You have to be sure to hire people who are pretty savvy with people skills," she says. "Interviewing now is painting an opportunity and giving the candidate tools to make the assessment. It's a 50/ 50 deal. They're interviewing you as much as you're interviewing them."
Success in this world requires new business sensibilities. "Gross margin is a rule to be broken," she explains. "In the old mainframe days, we expected gross margins to be 60 points, 15 points in PC days. Our model is 5 points of operating profit. How does that work? By delivering a high volume of transactions."
The business pace "creates a phenomenal level of energy," she says, with people putting in six days a week. And it requires trust. "Visibility, visibility, visibility," she suggests, extolling the value of face-to-face. "People need to see you."
Ventro, like many similar companies, has a great cultural challenge: "To blend the talent between young bright minds and the gray-hairs," she says. "The management team has to be ready, willing, and able to learn. The pioneer is always tweaking the model, so you have to hire people willing to learn and course-correct on the fly.
"There's no looking back over your shoulder after making a decision. You have to be adept and speedy at conflict resolution because momentum is such an asset. You're with a bunch of 32-to 35-year-olds, bright and willing to break all the rules and ask all the right questions. But you still have to surround them with a sufficient level of experience in channel strategy, brand building, and product management while keeping this momentum going. If you had all bright 32-year-olds or all bright gray-hairs, it wouldn't work."
The need for adult supervision is a new organizational requirement in the twenty-first century. Before we know it, 10-year-olds will be running the world. Perhaps they already are.
Since the 1990s, a new generation has come into business positions previously reserved for people two or three times their ages. Why? Because the new entrepreneurs have the ideas and the skills to work in the new way--but not yet the business experience to apply them. There's room for both generations.
Rear Admiral Tom Steffens, director of the Center for Intelligence and Information Operations at the U.S. Special Operations Command in Tampa, Florida, has his own experience of the generation gap: "I always find that I am about two thoughts behind in any 'chat session' I have with my son, who is a sophomore at Virginia Tech.
"The under-30-somethings are more likely to be more computer-facile than their more senior leaders, who may not even have the simple skill of rapidly pointing and clicking (and perhaps even typing). Of course, no leader wants to look incapable of anything, much less using a computer, which every third grader can do, so if the collaboration tool requires you to master Windows or whiteboarding or Internet chat while dealing with the time lag that is inherent in much of it (compared to a telephone)... well then, just forget it and call everyone to your office or HQ for a conference, even if it takes a few days or weeks before everyone can fit it into their schedule."
The gap goes even deeper for Steffens. It's conceptual as well. In his view, the older generation thinks linearly, whereas "two generations behind ours think differently ... they look at things as whole concepts and visualize the picture (still worth a thousand words, or is it a thousand terabytes?). So the whole collaboration concept works faster with them."
From the perspective of the younger generation, it's equally complex. "We have 26-year-olds who've only ever had one job before managing large groups of very smart grads just a few years younger," says Jay Albany, who is 23, and works in a dot-com.
It's not uncommon for people in Albany's position in start-ups to work 16-hour days. This is fast work but it's not necessarily smart, which is where the voice of experience makes its contribution in the Internet economy.
The word virtual has made it into everyday language. Virtual has the same Latin root as virtue, an intimately personal quality of goodness and power. Its archaic meaning is an apt definition for successful virtual teams: "effective because of certain inherent virtues or powers."
Here are three contemporary meanings for virtual:
When we use the term virtual, we do not mean it in the first sense, the way an old American TV commercial for audiotape did: "Is it live or is it Memorex? With Memorex, you can hardly tell." With a virtual team, you can tell: Virtual teams are living, not Memorex. They are most definitely real teams, not electronic representations of the real thing.
The "almost like" definition, as in "they act virtually like a team," is on target. There are similarities, but also critical differences. A virtual team conjures up a different picture from that of people in the same organization working together in the same place. People also use virtual to connote the same-but-different nature of a "virtual corporation," "virtual organization," and "virtual office."
The third and newest meaning of virtual attests to forces that have moved teams into an altogether different realm of existence--virtual reality--or, more precisely, digital reality. Electronic media together with computers enable the creation of new kinds of spaces. They are real to the groups that inhabit them, yet are not the same as physical locations...
List of Illustrations xxi
Chapter 1 Why 1
The Way to Work
How It Feels 11
The Virtue of Virtual 15
Chapter 2 Networks 27
From Tribes to Networks
It’s Official 27
The Networked Community 28
What’s Old, What’s New? 35
Network the Ages 40
The New 44
Personally Speaking 46
Chapter 3 Teams 47
Toward the Twenty-Second Century
Our Company Never Closes 47
Team 101 55
Four Ages of Small 58
Crossing Boundaries 62
The People Boundary 66
Chapter 4 69
Trust Virtual Relationships
Two Paths, Two Societies 71
New Gold 78
Capital Across the Ages 82
Creating Social Capital 85
Chapter 5 93
Place Home Is Where the Site Is
Sun’s Corporate DNA 93
Moving from Place to Place 102
Two Places 111
Chapter 6 115
Time The Virtual Pulse
On the Wings of a Big Bid 115
Five Phases of Flight 123
Life Cycle 125
Together and Apart 130
Stretching Time 134
Chapter 7 137
Purpose Why We Work
Turning Hierarchy on Its Side 137
Why Cooperate? 149
Discovering Purpose 152
Chapter 8 161
People On the Ice Together
“All of Us Smarter than Any of Us” 162
Reinventing Government 164
Chapter 9 187
Links Being in Touch
Connecting across Centuries 187
Circa 2086 189
Four Ages of Media 196
Atoms and Bits 202
Chapter 10 211
Launch Do It Yourself
Your Journey 212
Seven Steps 214
Play It Again, Sam 225
Chapter 11 227
Navigate Course Correction for Cyberspace
The Virtual Team Room 228
Holding the Whole 234
Chapter 12 239
Theory A System Science of Virtual Teams
The Periodic Table 240
Pattern Language for Virtual Teams 243
Smart Teams 253
Chapter 13 255
Think Reaching for Possibilities Together
How Groups Think 260
Group Reality 265
A Place to Think 268
Chapter 14 273
Star Maker 273
Searching for Intelligence 275
At the Frontier 277
Islands of Trust 279
The Biological Internet 282
About the Authors 301