Inside Small Business » 2008

10 Ways to Use Virtual Teams

Inside Small Business | April 24th, 2008

There is a lot of talk about virtual teams, virtual offices, virtual storage and virtual worlds these days. What is meant when we use the term “virtual”? Answers.com defines it as:

Existing or resulting in essence or effect though not in actual fact, form, or name: the virtual extinction of the buffalo.

So if we can achieve something that has an effect that is similar in quality to the “actual” entity, we call it virtual. Amazon’s Elastic Compute Cloud represents computing power and storage that doesn’t actually reside in your office, but which you can access to run your applications. Second Life is a virtual world which doesn’t actually exist in the physical world, but simulates a lot of what can happen in the physical world.

Similarly, a Virtual Team is one in which the participants don’t actually reside in your actual, physical office. A Virtual Team consists of two or more people collaborating on a project on behalf of another person or company. As someone who designs and builds virtual teams for Internet Startups, I thought it might be helpful to outline some of the key components you should know about Virtual Teams.

1) A Virtual Team is NOT another word for one or more freelancers grouped together. Freelancers might be part of a Virtual Team and are a great source of raw talent. There are load of sources for finding Freelancers and Virtual Assistants today. Some of my favorites are MyParttimePro, Guru and Craigslist. A Virtual Team is more than a group of freelancers in that it has a micro-culture of its own, an operating rhythm, a common mission and a clear set of inter-related roles and responsibilities.

2) Virtual Teams can be productivity boosters. They can save time and money by employing the cycles of part-time or under-utilized workers with skill sets that match full-time professionals. An effective Virtual Team can help accelerate your business growth by delivering execution capabilities across finance, marketing, sales, technology, management and legal areas of your business.

3) Virtual Teams are brought to you by the Web. This approach to human team creation just didn’t exist 20 years ago. I built my first Virtual Team in 1995 to help create one of the first online banking systems. Using a team of four or five talented software developers, we helped a large bank launch their first retail banking foray on America Online. I didn’t have the overhead of a payroll, insurance, office space, etc. of an actual team. I only paid my virtual team for the time that they worked. We learned that we built the system for about 1/10^th the cost of the Bank’s marketing budget for the same project. The virtual teams of 2008 are even more powerful and effective because of the tools available and the changing mindset of the workforce.

4) An effective Virtual Team needs good infrastructure. We use a collaborative environment called Huddle to help our teams coordinate around client projects. We use Google Calendar to coordinate our schedules. We use webcams and Acrobat Connect for meetings and desktop sharing. In working with virtual teams, we found it helpful to have standard pricing worksheets, service agreements and work order formats. Common meeting formats can help facilitate sales conversations, kickoff meetings and lessons learned. Having documented standard operating procedures for the most common forms of work that you perform will allow new virtual team members to get up and running quickly. All of these elements are examples of infrastructure used by virtual teams to be more effective, cost-effective, and nimble.

5) Effective Virtual Teams are tricky to create. Pay attention to human factors like cultural fit. Ask yourself and potential team members – how do you define value? You want to ensure that the team members will resonate with you and with the rest of the team. For example, there is nothing more frustrating to a gun-slinging code-writer than a slow, methodical project manager. That same project manager will be terrified when things show up on the Web site in the middle of the night without specs or testing. You need to decide on your team’s objectives and recruit to fill a culture that best fulfills those objectives.

6) Create Good Screening Criteria. If you plan to use Virtual Teams over and over, like we do, then I suggest you invest time in developing some good screening criteria. For example, when we are seeking to have specialists join our team, a favorite question is, “What can you deliver of value for under $1000?” The ones who run for the hills were never cut out for our teams. You might also want to ask about their infrastructure, their working hours, their availability or their preference for the kinds of people they enjoy working with. What are the things that will set your best virtual team members apart?

7) Have a Virtual Team Architecture. Think carefully about the structure of your Virtual Team. We like the power of the pyramid. Our specialists are used in a very select manner, targeted to client needs. Our project and marketing managers glue the project together and we use interns, stay-at-home moms and entrepreneurs to provide affordable muscle. This structure allows for the most cost-effective and efficient allocation of your manpower.

Create an Operating Rhythm for your Team. Your Virtual Team needs to have regular check-ins, periodic brainstorming sessions and Lessons Learned sessions after a new endeavor. The regularity of these sessions helps to compensate for the geographic distance between the team members and it allows everyone to be on the same page. In addition, it also gives everyone the chance to discuss ways they can improve their process.

9) Some top uses for a Virtual Team. We use Virtual Teams for a whole range of activities including competitive assessments, marketing list building, online marketing, buzz building through social media, Web site development, software development, investor preparation. If you plan to run the Virtual Team, you need to make sure that you have the domain knowledge and project management skills to make it work. For example, don’t create your own Virtual Team to develop software if you aren’t a software project manager. You’ll have to hire someone else’s team… and that might be a virtual one. You can even create a Virtual Team to screen other teams (for example, getting help to decide among numerous technical project responses to a project job board like Guru.com).

10) Focus on what you love. Consider using Virtual Teams to run Virtual Offices. As your office infrastructure becomes virtualized through tools like Quickbooks or the more comprehensive Netbooks, the possibility of having your business operations run mostly by a virtual team is now a reality. Imagine if you could outsource all of the pesky work you don’t like in finance, marketing, inventory management, etc. so you could focus on what you really love most. While we provide virtual teams tailored to running your office, services like Bookminders help provide Virtual Team members who focus on one aspect of the task (book-keeping).

We hope this sparked your imagination for how you can utilize Virtual Teams in your business. In the comments below, please share your stories and questions around Virtual Team use – the good, bad and ugly.

Skip Shuda is Chief Leverage Officer with Team and a Dream. Team and a Dream helps to accelerate the launch of web businesses.