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(originally published by Booz & Company)


When Teams Fail: The Virtual Distance Challenge

Critical as they are, corporate teams have been a notorious weak link in the effort to get work done on time and within budget. Here’s how to measure what’s going wrong.

Consider what it was like to work in a large corporation prior to, say, 1975. Much of the work, especially knowledge-based tasks such as product development and marketing strategy, was done by men, and white men at that. No matter what industry, by and large these men worked together in geographically centralized locations, where meetings took place face to face, teams played a relatively minor role in getting things done, and information technology as we know it today was nonexistent. The model — vertically integrated, process-oriented, and authoritarian with rigid managerial hierarchies and clear-cut lines of responsibility — came straight out of the industrial age.

Now consider the myriad changes that have transformed the corporate working environment since that time: Women and minorities have joined the workforce in large and growing numbers, and globalization has expanded the demographics of companies even further, turning the upper ranks of multinational corporations into seats of highly diverse managerial talent from developed countries and emerging economies alike. Thanks to the explosion of communications and information technologies, tasks have become much more “distributed”; many people no longer work in a traditional office, or even for a company with a local presence. And work is predominantly done by project teams, which might comprise workers separated by thousands of miles and by five or 10 time zones. Indeed, the very organization of the corporation has changed: It’s flat and highly networked, with accountability spread far and wide and to every level.

For the most part, these changes have been for the better. The increased diversity, reach, and technology of the digital-age corporation have produced a flood of fresh thinking and innovation, and the results, in productivity and enhanced value, are well documented. But there’s a less publicized downside. Studies have shown that the failure rate of a wide variety of corporate projects is high. For example, a November 2005 KPMG study of information technology implementations found that half of companies worldwide experienced at least one project failure the year before, and that 86 percent of companies lost more than 25 percent of anticipated IT benefits because of projects that had to be shelved or sharply downsized.

There is no shortage of advice for managers seeking to improve team performance and boost business results. Most of it, however well-meaning, depends on subjective, anecdotal evidence, and appeals to any number of fuzzy, unproven concepts. Noticeably missing from this litany of solutions is an objective model that would let managers quantify precisely why their teams struggle and the effect those struggles have on critical processes such as innovation, project success, and job satisfaction, and then measure how well efforts to boost team output are progressing.

That’s the approach espoused by Karen Sobel Lojeski, an organizational behaviorist and consultant who has pioneered a concept she calls Virtual Distance. Lojeski holds that there is an inevitable “perceived distance between individuals, groups, or organizations, brought on by the persistent and pervasive use of communications and information technologies to mediate the work we do.” The greater this virtual separation, the more problems the team will experience.

Lojeski developed the notion of Virtual Distance as a Ph.D. candidate at the Stevens Institute of Technology, after conducting a series of surveys and interviews with hundreds of large enterprises to analyze the difficulties companies were having in organizing successful virtual work teams. She was struck by an unexpected finding: The prevailing view, that teams underperform primarily because they are too widely dispersed geographically or among different organizations, was not quite accurate. Poor performance, Lojeski learned, occurred just as frequently among work teams whose offices or cubicles are on the same floor — people who are virtually, but not physically, distant from each other.

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  1. Karen Sobel Lojeski, Richard Reilly, and Peter Dominick, “Multitasking and Innovation in Virtual Teams,” 40th Annual Hawaii International Conference on System Sciences, 2007: An academic but compelling paper on the risks of multitasking. PDF Download.
  2. Graham Oakes, “There’s no success like failure...,” Financial Times, July 11, 2006: A contrarian view of the prevailing notion of high IT project failure rates. Click here.
  3. IT Cortex Web site: An IT consultancy whose site includes a useful, if somewhat dated, roundup of IT project success surveys. Click here.
  4. Virtual Distance International Web site: Karen Sobel Lojeski’s consulting firm, with links to a variety of publications on the problems of virtual work. Click here.
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