Managing Groups and Teams/How Do You Build High-performing Virtual Teams?

Introduction
“Virtual teams are groups of geographically and/or temporally dispersed individuals brought together via information and telecommunication technologies.” (Piccoli and Ives, 2003, p365) Virtual teams are increasingly becoming a key feature of projects in modern organizations, while the landscape of communication tools continues to change dramatically. The benefits of virtualization include diversity of perspectives, large member selection pool, extended hours of productivity, and reduced transportation costs.

However, many new challenges arise, such as difficulty in performance monitoring, disappearance of social cues, member isolation and anonymity, and technology issues. In addition, virtual teams must deal with cultural, temporal, and geographic barriers. Using a framework based on Larson and LaFasto’s Teamwork, conventional team strategies have been adapted for the virtual context to help virtual team leaders and members overcome these challenges.

A Clear and Elevating Goal
Larson and LaFasto (1989) stress the importance of a clear and elevating goal in the performance of an effective team. They define goal clarity as “a specific performance objective, phrased in such concrete language that it is possible to tell, unequivocally, whether or not that performance objective has been attained” (p28) and elevating as “personally or collectively” challenging and that it “makes a difference.” (p31) While Larson and LaFasto consider this to possibly be the most important component of an effectively functioning team, it appears to be even more critical for a virtual team.

To stress this point, Kirkman and Rosen, et al. (2002) quote a team member from Sabre, Inc. as saying “virtual teams need to understand much more so than co-located teams what goal they are working towards because you are working in such different areas, and in our case, in different countries. It plays a much stronger role if you know what your ultimate target is going to be. Everyone is working towards the same thing.” Further work on the performance of virtual teams by Kirkman and Rosen, et al. (2004) demonstrates a positive correlation between empowerment and virtual team performance. They define empowerment as having four dimensions, two of which, potency and impact significantly overlap the concepts of goal clarity and elevation.

This research therefore supports and elevates the arguments made by Larson and LaFasto about the importance of a clear and elevating goal for virtual teams. Virtual team managers should make sure to have a clear and elevating goal for the group and should make sure to prominently display the team mission statement on the virtual work space, team web-site, and other electronic communications to the group.

Results-Driven Structure
Team structure is a key factor which differentiates successful teams from unsuccessful ones. Team structure encompasses many aspects such as tools, processes, communications systems, facilities, and organization of the team. However, the best structure depends on the objectives and composition of the team.

Virtual teams tend to be very effective in project development tasks. However, the lack of face to face contact can be a challenge in building consensus. For decision-making teams, having the right team composition can help to overcome this. Collectivistic teams have higher levels of collaborative conflict management than individualistic teams, and are motivated more by outcomes which benefit the entire team. (Paul, et al, 2005)

Research has also shown that highly diverse or heterogeneous teams outperform homogenous teams in many performance measures, though they take longer to reach consensus. Virtuality can be beneficial for highly diverse teams since it obfuscates potentially divisive demographic differences. (Kirkman et al, 2002)

Larson and LaFasto outlined four necessary features of effective team structure, which apply equally to virtual teams, but become more challenging.

First, team members must have clear roles and accountabilities. Lack of visibility may cause virtual team members to feel less accountable for results, therefore explicit facilitation of teamwork takes on heightened importance for virtual teams. Temporal coordination mechanisms such as scheduling deadlines and coordinating the pace of effort are recommended to increase vigilance and accountability. (Massey, Montoya-Weiss, and Hung, 2003)

Second, teams require effective communications systems. This is especially important for virtual teams because geographic and temporal differences may rule out the most common communication channels. “Many in our study found e-mail a poor way for teams as a whole to collaborate.” (Majchzak et al, 2004) Individual email conversations cause others to feel left out, but copying everyone causes email overload. Sharing documents over email often leads to conflicting versions. Many successful teams prefer to use virtual work spaces, online forums, instant messaging, and file repositories. Regardless of the communication system, team norms and rewards structures should support use of the systems.

Third, effective teams should monitor individual performance and provide feedback. Assessment and development of virtual team members is very limited in the virtual environment. Performance management is an enormous challenge when employees are out of sight. Managers should monitor group communication to assess subjective factors such as idea generation, leadership, and problem-solving skills. (Kirkman et al, 2002) Utilizing peer and customer feedback helps assess contributions to team effectiveness. Managers should also consider using "richer" communication media (such as video conferencing) to more effectively deliver evaluation feedback.

Finally, teams must rely on fact-based decision making, for which information and communication tools are vital. Teams can adapt decision-making software to facilitate fact-based problem solving and decision-making. (Kirkman et al, 2002) They might also assign one person to ensure accurate information is clearly communicated (Piccoli and Ives, 2003). Rocketdyne, for example, used collaborative technology to manage knowledge. They allowed all communications to be recorded and all information to be visible to the team, and even prohibited face to face discussions. (Malhotra, Majchzak, Carmen, Lott)

Members
Larson and LaFasto recognize three common features of competent team members: technical skills and abilities, desire to contribute, and capability of collaborating effectively. Virtual teams amplify the importance of using appropriate criteria when selecting people for the team. A critical element in high-performance teams is creating functional diversity among team members, while productively managing resulting task conflict. Work group studies suggest that “such conflict evidently fosters a deeper understanding of task issues and an exchange of information that facilitates problem solving, decision making, and the generation of ideas.” (Pelled, et al, 1999, p22)  A best-practice study of successful virtual teams concludes that diversity among disciplines, working styles, and problem-solving approaches can be exploited to produce “solutions instead of acrimony.”  (Majchrzak, et al, 2004, p133)  Conflict researchers have found that task conflicts can improve team performance if managed collaboratively. (Weingart and Jehn, 2000)

However, regardless of other qualifications, not everyone can handle the social isolation of a virtual team. Maintaining this challenging environment requires selection of team members with interpersonal skills, self-regulatory skills, a high level of knowledge, and comfort with technology. (Gibson and Cohen, 2003) This critical balance between technical and interpersonal skills must include the ability to work with others to identify, address, and resolve issues.

Managers should consider using behavioral interviewing techniques and simulations to select team members with unique areas of competence that will contribute to a high-quality solution. Ideally some members should have team process backgrounds. Managers should also provide potential team members with a realistic assessment of virtual team challenges, and the choice to opt out.

Unified Commitment
Larson and LaFasto suggest that lack of unified commitment is often the most important feature of ineffective teams. They identify two key elements: dedication to the endeavor (commitment) and dedication to the team (unity).

High-performance teams are distinguished by passionate dedication to goals, identification and emotional bonding among team members, and a balance between unity and respect for individual differences. Virtual teams face the challenge of developing and sustaining unified commitment in the absence of face-to-face contact. In particular, they must identify and deal with the most serious threat, competition between individual and team goals.

Kerber and Buono recommend appointing a strong team leader, willing to maintain frequent contact with team members, take full advantage of collaborative technologies, demonstrate a high level of personal commitment, and deal quickly with self-serving and non-contributing team members. Larson and LaFasto suggest that commitment can be enhanced by involving team members in project planning and in defining team identity, goals, and processes. Virtual team leaders should identify commonalities among members early on, while focusing the team on achieving key performance objectives and providing a clear context for recognizing team success.

Finally, interdependence of goals, tasks, and outcomes among members of virtual teams can overcome motivational challenges, particularly early on. (Hertel, et al, 2004) Virtual team managers can create the experience of connectedness by delegating goal setting, assigning interdependent tasks, and rewarding both personal contributions and team performance.

Collaborative Climate
“Collaboration flourishes in a climate of trust.” (Larson and LaFasto, 1989, p. 87) Trust is based on social characteristics (familiarity, competence), immediate outcomes of interaction processes (reliability, integrity), and institutions (social norms, policies). Studies have shown that while trust has little impact on task performance, it can significantly reduce process losses. (Jarvenpaa, Shaw, Staples, 2004)

Trust affects how we interpret member behavior. “Trust is the lens through which these factors are interpreted.” (Jarvenpaa, Shaw, and Staples, 2004, p253) Therefore trust plays an important role in virtual teams where ambiguity is high. Unfortunately, building trust is an enormous challenge for virtual teams. "In virtual organizations, trust requires constant face-to-face interaction—the very activity the virtual form eliminates." (Kirkman et al, 2002) Structured opportunities for socialization are less satisfying in virtual environments, and slow development of relational ties.

When a team is formed, expectations about workloads, processes, and contributions lead to “psychological contracts” which can damage trust when broken. (Piccoli and Ives, 2003) Reneging and incongruence are heightened for virtual teams due to the limited ability to communicate. Studies show that in high-trust teams, structured behavior control mechanisms (rules, progress reports, explicit assignments) intensify the negative effects of reneging and incongruence because they increase salience of member behavior. (Piccoli and Ives, 2003) However, in low-trust teams strong structures actually mitigate the negative effects of trust by minimizing the role trust plays in interpreting member behavior.

Trust is not always dependent on social bonds. Instead, it can be founded on performance consistency. Task-based trust (vs. interpersonal trust) may be more achievable for virtual teams, and can be built by developing norms around communication patterns, ensuring reliable and rapid responses, and making team interaction timely and consistent. (Kirkman et al, 2002)

Standards of Excellence and External Support
Virtual teams are held to the same standards of excellence as conventional teams, but there are subtle differences. Virtual team members often function as the point of contact for their immediate physical group. They often have more autonomy than conventional team members as their teams may meet according to varying time zones which may not be understood by their local management. The presence of a true “invisible team” (Larson and LaFasto, 1989, p109) is also a unique component of a virtual team. The “invisible team” is the management team to which each of the members report. The invisible team sets the standards for each member.

Misunderstandings may arise if the “invisible team” does not align itself to the same set of expectations. A virtual team leader must understand the level and kind of support from each contributor. Larson and LaFasto observe that “loss of morale…decreased belief and commitment to the team’s goal” (p110) result when support is not visible to the team. The team leader should consider what expectations are reasonable to ask of members. Virtual teams that span various companies must create some form of “shared understanding” (Symons, 1997, p427) in order for members to develop a set of expectations. Failure to establish understanding may result in standards that are not achievable by all members. External support frequently determines how resources, such as incentives and capital expenses, are contributed by team members. During the Rocketdyne-Boeing Project, expectations of each member were established at the outset of the project. (Malhotra, Majchzak, Carmen, Lott) Resolving how each member would contribute time, resources, and expertise reduced misunderstandings as the project progressed. Standards of excellence and external support intersect on many levels. Time and energy is well spent at the outset of a virtual team to evaluate the level of excellence the team will achieve. This is especially true when financial contributions require resources outside of the control of the virtual team. Managers of virtual teams need to understand the feasibility of their requests given the context of their members’ management.

Leadership
Principled Leadership is the final ingredient identified by Larson and LaFasto (1989) for effective team performance. Pauleen (2004) tells us “leadership challenges are magnified in a virtual environment” and stresses the necessity of face-to-face meetings, stating “it is essential for them (leaders) to build personal relationships with team members before commencing a virtual working relationship. Strong relational links are associated with trust, creativity, motivation, morale, good decisions, and fewer process losses. However, Majchrzak, et al. (2004) argues that you can lead high-performing virtual teams without face-to-face meetings and provides several examples of successful teams whose members never met in person. This requires intensive communications to build a coherent identity and hold the team together, and their research found that the leaders of successful virtual teams “rarely let a day go by when members did not communicate with one another” and “frequent phone conversations between the team leader and individual members …were not unusual.” Research by Kirkman and Rosen, et al (2004) on the performance of virtual teams may provide a clue for leaders attempting to resolve this dilemma. They suggest that periodic face-to-face be held to focus on process improvement, but if this is not feasible “managers need to make extra efforts to empower virtual teams to deal directly and decisively with process improvement issues” (p. 188).

Gibson and Cohen (2003) suggest virtual team leaders need to engage the group in openly discussing cultural differences and similarities to help develop communication norms. Thompson’s (2000) work suggests the leader of a virtual team must also play a key role in assessing and balancing team performance levels across the four dimensions: team productivity; team satisfaction; individual growth; and organizational gains. Pauleen (2004) states that the leader of a virtual team must: assess team issues, boundaries, organizational policies, resources, and technology; target relationship levels necessary for performance; and develop effective strategies and select and utilize appropriate communication channels.

Conclusions
Virtual teams must deal with problems that befall face-to-face teams, along with some unique challenges. At the same time, they have the potential to realize additional process gains and deliver high-quality solutions by bringing together diverse individuals with complementary knowledge without the limitations of physical, organizational or cultural boundaries.

Our competitive environment places a premium on the quality and speed of solutions, and technology is providing increasingly richer collaboration tools – advancing from the telephone and the fax machine to video conferencing and virtual workspaces in a little over a decade. Organizations that learn to harness the power of virtual teams with these collaborative technologies will gain significant competitive advantage.