Decision Support: How To Sharpen Virtual Business

The destruction of the World Trade Center has prompted many businesses to rethink the wisdom of locating employees in a single, highly visible structure. Those companies that were housed in the Trade Center are grappling with how to conduct business now that employees have scattered among offices in Manhattan and many are working from home. Although the idea of virtual organizations resonated with Internet-based business models, the loss of the Trade Center has crystallized the concept and transformed it into a business necessity.

The success of virtual businesses depends on many factors, but most involve technology, people, and cultural issues. The top technology issues include:

High bandwidth: With video, audio, and real-time document sharing, high-bandwidth networks are crucial. This includes increased bandwidth to Europe, South America, and the Pacific Rim, as well as to remote employees.

A full range of integrated collaborative tools: E-mail isn't enough. Virtual companies need document sharing, instant messaging, remote presentation, and E-conferencing.

Competency networks: It's vital to build directories of expertise and competency that clearly articulate the knowledge within the business and where it can be found. This can be done with automated tools such as the Lotus Discovery Server, Orbital Software's Organik, or Tacit's KnowledgeMail, or through the use of processes that collect and validate competency through databases or Web-based "yellow pages."

The most important people and culture issues are:

Storming and forming: As networked companies mature and teams become the dominant business structure, they'll need to allow time and funding for virtual teams to meet, greet, and brainstorm. This phase is often neglected, making teams less efficient, because members haven't shared their views and built relationships with remote team members.

Face-to-face meetings: A well-executed virtual business doesn't preclude physical meetings, but it limits them to important issues and circumstantial visits. All physical meetings should be anticipated so that working space is made available to visitors. The visitors should be made aware of meetings or other activities that may be of interest to them while visiting. Companies also should consider setting up visitor areas that are assigned based on travel schedules, so when the visitors arrive, they can quickly locate space, rather than negotiate for it.

Think regional: Many people commute from suburban to urban settings. There are clearly productivity negatives caused by lateness, lack of alertness, and other factors. Businesses should consider satellite offices in suburban areas, linked tightly to urban headquarters via technology. These mitigate travel for people in the suburban areas and make logical extensions of the company, creating clear alternatives for backup and recovery sites, office space, and technical facilities. Accommodations also should be made in both regional and home offices for local services and supplies. Examples include PC repair and support, as well as office supplies. The company can still negotiate business rates, but should do so with vendors with offices in the same suburban areas.

Establish communities of practice: Competency networks, as captured by knowledge-management software, should mirror communities of practice, or small groups with expertise in certain areas. Business-continuity processes require that communities of practice own "skill profiles" in remote locations. The business should understand and profile individuals as well as its knowledge-based capabilities.

Education: Businesses need to train people in techniques that maximize their effectiveness in a distributed environment. This means providing the best tools for each kind of work, as well as a solid grounding in collaboration tools, facilitation, team dynamics, and interpersonal communication.

Rewards and lessons learned: Collaborative behavior should be encouraged. Companies need to quickly capture local lessons that encourage further learning and collaboration. They also need to realign incentives to reward those who participate in, and encourage the growth of, the collaborative learning model.

In the short term, companies need to establish instant messaging standards, re-examine collaboration server distribution, and begin educating employees on the practices required to work successfully in a distributed environment.

The new business reality relies on the Internet not only to market and deliver services, but as a core thread in the fabric of companies linking the voices, faces, products, and skills of employees, partners, and customers.

Robert K. Weiler is chairman, president, and CEO of E-business advisory firm Giga Information Group. Reach him at [email protected]. Giga VP and Research Leader Dan Rasmus contributed to this column.

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