Virtual Company Advice
Caroline Davis, president of a women's clothing company, has surrounded herself with a stellar management team. Well, not literally. Davis's Worth Collection, which had $40 million in revenues in 1998, is based in New York City. But her three vice presidents are in Indiana, South Carolina, and New Jersey. "I've always looked for the right person, regardless of location," says Davis. Moving key executives to pricey Manhattan would have cost the company a small fortune, so she decided to make long-distance managing work. Here's how she does it.
- Hiring. "Worth hires people who work well independently and don't need constant supervision," says Davis. As part of the hiring process, she uses a written "personal profile" test for insight into prospective hires' work habits.
- Communication. "Everyone is connected by e-mail, voice mail, and fax so that communication flows much as it would in a single location," she says. "There are also weekly conference calls with all levels of management." Recently, for instance, the group discussed plans for a national sales meeting and a major recruiting effort. Managers come to New York every 10 to 12 weeks for additional long-term strategic planning.
- Culture. "We pay more attention to our corporate culture than if everyone were in one place and we took it for granted," says Davis. On the phone, "sometimes we'll discuss a book, or I'll send out a magazine or newspaper article and ask for opinions on how it might relate to our own strategic planning." She adds, "Biweekly, Worth puts out a newsletter that goes to everyone in the company as well as to our independent sales associates. It contains everything from motivational pieces and corporate stories to letters we get from customers."
Like Davis, Will Pape has years of experience managing employees who are in distant locations. As co-founder of VeriFone, Pape helped grow that company as a "virtual corporation" with employees scattered across the globe. (VeriFone, which makes electronic payment systems and is based in Santa Clara, Calif., was acquired by Hewlett-Packard in 1997.) Here are Pape's tips for making long-distance management work:
- At least some of the time, have managers operate in cyberspace, rather than out of the main office. "Sitting in a central office without plugging into the virtual culture is almost a guarantee of failure," Pape says. "You don't know what's going on, and you signal your employees that operating virtually isn't really important." And, like Worth's Caroline Davis, who brings her managers together regularly for strategic planning, Pape believes it's important for employees to get together frequently.
- Make sure home-based employees have appropriate work space. "In my experience, one of the main causes of productivity decline in virtual organizations is inadequate work space," Pape observes. "Physical work space is so important that companies should provide written guidelines for home offices." He thinks every home office should be a separate room, with a door that shuts. It should also include at least two dedicated business phone lines -- one for business calls, and one for e-mail and faxes. "When people put their office space where household functions go on -- the kitchen table or the bedroom, for example -- they have a hard time taking a break from work," Pape says. "In time those workers become bone-weary, and their productivity slumps."
- Strengthen relationships between remote workers and employees at the main office. "People who work out of their homes or at customer sites also need to spend some time in an office with their colleagues," Pape argues. "Any face-to-face meeting -- a regular status meeting or an annual, sales, or planning meeting -- is an opportunity for cross-fertilization." His tip: When you plan the agenda for a meeting that includes remote workers, allow extra time so employees can socialize. "Some managers are bound to wonder if such organized socializing is a waste of money," Pape notes, "but I believe that forging those ties creates both a sense of belonging and the personal relationships that are necessary for remote employees to work effectively."
- Find ways to help people feel connected to the organization and to one another. Make sure, Pape advises, that remote employees receive frequent -- perhaps even daily -- updates about company progress. Include them in planning initiatives, and make your corporate mission and vision clear to every employee. "When you become a virtual organization, your staff suddenly loses all those interactions in the hallway, in the elevator, and by the water cooler that help move projects forward and smooth out conflicts," Pape says. To compensate, he suggests making regular use of videoconferencing and telephone conversations. Relying on e-mail too much, he finds, can allow conflicts to escalate. "When workers do most of their communicating by e-mail, small irritations easily grow into major conflicts," Pape says. "Learning how to disagree remotely is an important component of being able to operate virtually."