CIO —

In a market fraught with uncertainty, many companies have focused on cutting expenses and increasing productivity and efficiency as a way to stem market share losses and reverse downward sales trends. This often means downsizing and reorganizing to reduce labor costs, eliminate redundancy, and better target scarce resources. In the process, offices have been closed, divisions and departments merged, employees dispersed, and leaders challenged to manage wider spans of control—often covering multiple locations. In the changed global business landscape, gaining competitive advantage will depend in part on the ability of business units, divisions, and functional departments to collaborate successfully across a whole new set of boundaries.

Collaboration, however, does not necessarily occur without thought or effort, even among people separated only by a floor or a cubicle wall. Teams, the workhorse units of the organization, are increasingly "virtual," consisting of people working across space, time zones, and often cultural boundaries. As virtual teams become more and more a reality for growing numbers of people, leading them effectively is critical for companies wishing to exploit the opportunities for achieving high-priority business goals.

The Benefits and Liabilities of Virtual Teams

According to a 2009 study by MIT's Sloan School, well-managed virtual teams can potentially outperform teams sharing a location. The benefits of virtual teams include:

• Integrating diverse knowledge and skills to drive innovation, address complex tasks more effectively, and make better decisions
• Reducing costs due to eliminating overlapping functions and sharing of best practices
• Sharing knowledge about different products and markets
• 24/7 productivity by teams working across global time zones¹

¹Frank Siebdrat, Martin Hoegl and Holger Ernst, "How to Manage Virtual Teams," MIT Sloan Management Review Summer 2009

To achieve these potential benefits, however, leaders need to overcome liabilities inherent in the lack of direct contact among team members and managers. Team members may not naturally know how to interact effectively across space and time. They need strong team skills such as setting goals, sharing responsibility for getting things done, and providing mutual support. And they need smart leadership to make sure they can leverage those skills in a virtual working environment. Without team skills and effective leadership, a virtual team can become ineffectual and dysfunctional. Problems can include:

• Difficulties in communicating and understanding one another, resulting in a lack of common ground, trust, and shared responsibility
• Failure to develop task-related processes such as setting clear goals and standards
• Inability to collaborate in a way that takes advantage of different perspectives, knowledge, talent, and expertise
• A lack of full engagement and commitment by all team members to deliver their best performances when completing tasks and progressing toward team goals

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