2000 Product Development Management Columns

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Want Virtual Results? Use A Virtual Team

Increasingly, managers are turning to virtual teams to develop new products. But increasingly, they are displeased with the outcomes: mediocre performance or lackluster products. There is a more effective alternative—co-location. But first, we must understand why virtual teams have become so popular.

Virtual teams sprout from two sources. One is new communication technologies— everything from overnight express to the Web— that allow activities to be carried out at a distance. The other factor is subtler but more disturbing. In my experience, many companies are fragmenting their operations geographically. Through acquisitions and mergers, they unwittingly split their product development resources among dispersed sites, believing that technological patches will cover any gaps created.

Even without acquisitions, most manufacturers are becoming more global. Sales and marketing activities now span oceans, and manufacturing is done offshore to cut costs. Consequently, we now design products for markets on various continents, in several time zones, for people in many cultural traditions, speaking many different languages. The same complications often arise when integrating design with global manufacturing.

Management seems to presume that virtual technologies will advance fast enough to effectively overcome geographic dispersion. To some extent, this is true. Videoconferencing saves travel expense, time, and jetlag. E-mail allows us to work in multiple time zones and easily broadcast information to as many individuals as desired. However, e-mail also allows critical decisions to sit in an in-box indefinitely. Worse, we have no idea whether our e-mail message was understood or is being acted upon. Yesterday’s phone tag has become today’s e-mail tag.

Recent books, such as Mastering Virtual Teams (Duarte and Snyder) and Virtual Teams (Lipnack and Stamps), suggest how to work with virtual teams. But these books seem to presume that physically co-located teams are impossible. These authors show us how to survive with what we seem to be stuck with. Yet, all the managers I know who have experienced the power of co-location would employ it again if time-to-market were critical. These managers will go to great lengths to provide as much co-location as possible for their development teams.

So, how do we provide co-location in a fragmented, global world? First, recognize that if speed to market is critical, time is money. Calculate the cost of delay (Chapter 2 of the book Developing Products in Half the Time: New Rules, New Tools, [John Wiley & Sons, 1998] shows how). Be willing to spend money to get the team together. For example, Carrier Corporation couldn’t co-locate a team developing a new air conditioner because they were assigned a manufacturing site and a test facility in different regions, that they could not move. They compensated by conducting liberal team training at the project’s outset, spending generously on travel for the whole team, and pre-booking eight hours of videoconference time every week for the duration of the project. Carrier essentially bought time through co-location.

If you can bring the team together for only part of the project, make it the initial portion, for several reasons. The team needs time together initially to build trust. At this time they should explicitly establish the work methods they will use throughout the project and decide on roles and responsibilities. With this groundwork in place, the team will feel comfortable moving much faster later in the process.

Another reason for an emphasis on early face-to-face communication is that this is the stage of the project when the issues to be communicated are the most ill-defined. In-person communication will help greatly in quickly and accurately resolving this fuzzy material.

Think about who most needs to be co-located. You can obtain much of co-location’s benefit at a reasonable price by analyzing your teams to discover the intensive communication links, then co-locating these partners.

Finally, realize that the alternatives to co-location are not equal. Consider them in terms of the electrical engineering concept of bandwidth. E-mail requires very little bandwidth to communicate electrically, but it can’t communicate graphics, emotions, sounds, or tempo. The telephone requires more bandwidth, but provides some communication richness. Video is broader bandwidth still, and is also richer. The ultimate in both measures— bandwidth and richness— is face-to-face presence. The books listed above will help you judge when each medium is needed.

Now that I have used co-location liberally, I should define it, because I find that many people who haven’t yet accepted it tend to water it down— getting watered-down results in return. A co-located team is one in which marketing, engineering, and manufacturing (at least) are located in a 30-by-30-foot area, such that they can see each other while working and overhear each other’s conversations.

(c) Copyright 2013 Preston G. Smith. All Rights Reserved.

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