14 tips when building virtual organizations

Virtual organizations place new and different demands on leadership. This applies not least to the ability to manage a network of mutually dependent international competencies. Here are 14 tips for all of you who are planning to build virtual teams.

Virtual teams are often defined as a group of individuals who are mutually dependent on each other’s competencies and interact based on a specific task and a specific common purpose. Unlike conventional teams, virtual teams have no time, space, or organization limitations.

Each person in a virtual company contributes a unique skill. In order to make such an organization work, of course, high demands are placed, not least on governance, technical solutions, and communication between the participants.

– Effective leadership in virtual organizations requires an understanding of cross-cultural relationships as well as knowledge and the ability to communicate and coordinate with the help of advanced technology. In addition, leaders of virtual organizations must always be available and able to motivate employees through a convincing vision, explains Victor Molén, CEO of Indivd, which is currently in the process of building a geographically dispersed virtual organization in order to support the development of physical retail over Worldwide.

Paid volunteers

The modern manager’s challenge in a virtual organization is no longer to point the whole hand and tell what the employees should do.

– His or her most important challenge is to coordinate a workforce, which consists of geographically and culturally dispersed knowledge workers with divergent wishes and requirements. Today’s virtual managers must lead and address their employees as if they were unpaid volunteers, who have committed themselves due to a shared vision, common goals, and common goals and who also expect to participate in the project’s management, says Victor Molén.

Based on Indivd’s founders’ many years of experience, here are 14 challenges and just as much good advice for everyone who is in the process of building virtual teams. We gradually share them with new tips every week.

1. Firm leadership

A major challenge in virtual organizations is the feeling of losing control. This feeling needs to be managed and balanced with the help of careful strategic planning, well-defined processes, communication, coordination, and trust between the various participants.

In addition, the boundaries are often unclear and fluid in a virtual organization and employees may therefore experience some uncertainty regarding affiliation, job roles, areas of responsibility, career paths, and internal relationships.

Here it is important to ensure that all agreements and contracts are clear regarding roles, responsibilities, and deliveries. In addition, management must be constantly prepared to reconsider these agreements. At the same time, it is important to be patient and realize that it takes time to develop well-functioning and efficient teams.

2. Correct team members

Make sure that skills and competencies complement and do not overlap. Recruitment is extremely central. Hiring the right people with the right skills, attitudes, personalities, and values from the outset will be directly decisive for the development power.

3. Communication

The importance of well-functioning internal and external communication is often emphasized as an important success factor in virtual organizations. Since the virtual teams will not be able to physically communicate and send information between them as in older work environments, it is necessary to create tools and policies that ensure active communication between the teams. In a virtual organization, there are higher requirements for the team members to be extra diligent and disciplined when it comes to sharing information and keeping in touch with each other.

4. Corporate culture

Another important challenge is the creation and maintenance of a corporate culture with strong loyalty and cohesion. The team members – often for geographical reasons – often choose their own working hours, which easily risks leading to a fragmented corporate culture. Here, too, it is about the importance of functioning communication – to continue to interact effectively and persistently with each other – this despite the lack of face-to-face contact and reduced opportunities for improvised conversations and getting to know each other a little more in-depth. It is also important to absorb and quickly engage and activate new members of the teams.

5. Common values, purpose, and vision

Common goals, common purpose and vision, and common values are what hold together and develop virtual organizations. Helping people understand and want to be part of the organization’s vision and values is perhaps one of the most important and fundamental building blocks in virtual business building. This work contributes to creating extra energy, especially if and when the participants share a vision that feels extra value for the development of the outside world.

6. Trust and confidence

Make sure to promote cooperation, trust, and commitment. Trust and confidence can be defined as reliable and positive expectations of the company’s and the company’s representatives’ motives, actions, and decisions. Creating the trust of the heart and the trust of the brain is a prerequisite for virtual team members to really want and dare to care for each other and fully recognize the competence of their employees. Trust and confidence create job satisfaction and together form the glue that holds the team together, contributes to increased profitability, improved shareholder value and thus drives the organization forward.

7. Relationship depth

By relationship depth is meant the extent and depth of the team members’ connection to each other. Building and creating deep relationships is for obvious reasons a difficulty in virtual organizations. Geographical and cultural distances in combination with an often rapid change can easily create difficult obstacles to overcome. Strong and deep relationships, on the other hand, create more efficient and conflict-free teams. The importance of stimulating internal contacts – preferably also through face-to-face meetings – cannot be overemphasized.

8. Shared understanding

Make sure that each employee contributes. Sometimes this is talked about the concept of shared understanding. This means the common ability to see the whole in terms of the team’s goals, including knowledge of and acceptance of the expertise that each team member possesses and how the team should interact together to realize overall strategic goals. Because virtual teams do not meet each other in person and often lack emotional ties to each other, to leaders, and to the organization, there is a risk of communication problems and a lack of empathy and understanding. If roles and responsibilities are not clearly defined in advance, misunderstandings and confusion are easily created, which in turn risks leading to conflicts and project delays.

9. Cross-cultural respect and insight

Cross-cultural respect and insight is another challenge in all organizations and especially virtual ones. Virtual teams often consist of members from different cultures around the world with their own culturally defined norms, values and assumptions. Four strongly inhibiting and preconceived attitudes to process and counteract for a well-functioning virtual organization are:

(a) They are our subordinates or suppliers who need to learn our language and our way of working and we do not need to learn theirs.

(b) There is no difference between people – they are pretty much the same everywhere.

(d) We have been an international company for a long time and we know how to work with people from other cultures.

10. Universal language

The term universal language means that each team member works with the same set of principles, norms, rules, and processes. Personal assumptions, expectations, and interpretations can easily cause confusion in virtual organizations and hinder effective collaboration. That everyone works on the basis of a universal language leads to a common team identity and a stronger sense of belonging between the members.

11. Virtual learning

Linked to recruitment is the virtual organization’s ability to create learning in order to constantly improve the team members’ innovative capacity. Virtual organizations must constantly be at the forefront of developing sustainable and competitive solutions to new customer requirements. Therefore, it is important to constantly convey skills and education that are crucial to the team’s success.

12. Knowledge sharing

Competence is often the strength of virtual organizations, but can also be their weakness if there is no sharing of knowledge between team members. The fact that team members share what they know for the best of the team can be directly decisive for an organization’s rise or fall. Open transfer of knowledge always leads to common mental models, shared understanding, and better decision-making.

13. Small teams

An experience Indivd has made is that in virtual contexts it is not possible to have as large teams as in more traditional organizations. When the physical contact disappears, it is no longer possible to work as efficiently in teams exceeding five people. The difficulty of holding together and directing the work increases with the size of the groups. Unfortunately, this also applies to the discipline of attendance during digital meetings.

14. Important with incentives

With virtual organizations, the game plan changes. An important way to increase motivation and commitment is various forms of incentives. It is important to understand here that the factors that drive people are both individual and cultural. In some cultures, options and co-ownership are not at all as interesting as financial encouragement and personal rewards, while they are a prerequisite for engaging the right skills in other cultures. At the same time, these preferences can be highly individual and differ greatly between different people in one and the same culture. The most important thing is to maintain focus on this in connection with salary and development talks.