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The challenge of global employees

As global teams of Internet-connected workers become more of a reality, so do the corresponding logistics and cultural barriers they raise. Stanford Business School explores how some managers are tackling the challenges.

Here's a management challenge: Run a 16-country, multilingual team that operates on both sides of the international date line, and make it capable of interpreting thousands of arcane and sometimes conflicting government regulations for product designers back home.

And try doing it at a time when travel budgets are tighter than ever.

That was the mission Hewlett-Packard gave John Monroe, the now retired head of the company's Corporate External Standards (CES) organization, in 1999. A 24-year HP veteran with a doctorate in electrical engineering, Monroe knew that the team members needed to trust each other, solve common problems quickly, and demonstrate a significant return on investment to the company's increasingly cost-conscious management.

"Sure, I was unhappy that we couldn't travel much, but I just told myself to get over it," Monroe said.

Get over it he did. His team saved the company $800,000 a year in compliance costs for consumer products in Argentina and $200,000 a year in avoided costs and faster cycle times in Korea. In 2002, the HP-Compaq merger integration team adopted the CES organization structure and business model.

Not every company with a dispersed work force has challenges on the scale of HP's external standards group, of course. But as business expands and diversifies, and supply chains routinely span the globe, more and more managers are required to build and run teams whose members rarely work face to face--whether they are prepared or not.

"It's scary. A lot of organizations create virtual teams with almost no understanding of the unique implications of that decision," said Margaret Neale, a professor at the graduate school of business at Stanford.

Making those teams work isn't easy. Relatively routine tasks, such as scheduling a meeting, become complex and fraught with interpersonal friction when one person's work day begins as another is sitting down to dinner or sound asleep. A simple e-mail exchange frazzles nerves because of cultural misunderstandings, and information needed in one place sits on a desk in another because there's no routine mechanism to share knowledge.

"We put people in a complex virtual environment and we don't give them training, because we don't know what to train them on," Neale said.

For Neale, understanding the virtual environment is a natural extension of her research and teaching on collaboration and negotiations. Neale and colleagues Terri Griffith of the Leavey School of Business at Santa Clara University and Elizabeth Mannix of the Johnson Graduate School of Management at Cornell University have studied and written about virtual teams for four years.

While still incomplete, their research suggests that despite inherent limitations the virtual team model can be used successfully by a variety of businesses. Stanford Business interviewed Neale and Griffith recently and spoke with executives at companies fielding virtual teams to solve difficult business problems.

Go to your rooms
It's a common sight in many offices: groups of people huddled around a spiderlike Polycom speakerphone for a meeting with colleagues in any number of remote locations. Meeting via phone is often a useful tactic, but have you ever noticed the dynamics of those meetings? If the groups are uneven in size, members of the larger group tend to dominate the conversation and engage in side talk while someone else is speaking. Unable to see each other, people inadvertently interrupt and miss significant visual cues. Some members almost never speak, and by the end of some sessions it appears that there have been two meetings (or three or however many nodes make up the meeting) instead of just one.

Multiple e-mails are sometimes necessary to clarify points that could be dealt with in a quick conversation.
At the Sutherland Group, a Rochester, N.Y.-based provider of call centers studied by Neale and her colleagues, managers found a creative way to solve the Polycom dilemma. "They send people to their rooms," jokes Griffith. Rather than meet in conference rooms, team members stay at their workstations and dial into a phone bridge.

The result is one meeting, no side talk, and everyone has immediate access to data needed for the discussion. Of course, phone bridges cost money and do not have unlimited capacity. Some companies use various forms of videoconferencing, ranging from inexpensive Web cams mounted on individual monitors to theater-like conference rooms equipped with equipment that sends a high-bandwidth signal to another conference room.

Whichever model is followed, regularly running remote meetings takes tact, cultural sensitivity, and creativity.

Although English is the official language of HP's standards group, not every nonnative English-speaking employee finds it easy to communicate in a meeting, especially during a teleconference. As a result, those employees tend to be quiet, and the company loses the chance to benefit from their ideas. HP managers noticed this and instituted the "warm up" at the beginning of every meeting. According to Monroe, it works like this:

A manager asks each participant to "check in" with the team by relating a two- to three-minute story in English about some event in their personal or business life. The topic, he said, isn't important. "At one meeting we discussed the World Cup. It got everyone's motor running."

As a result, team members get to practice speaking and, just as important, listening in English. They learn more about each other--which builds trust--and get a sense of what skills other members bring to the team.

Even when employees have good language skills, they naturally interpret written and verbal communication through the filter of their own culture. Consider a situation that developed at Check Point Software, an Internet security software firm with most of its 1,200 employees split between offices in Israel and the United States:

"People in Tel Aviv asked me why their U.S. counterparts would sometimes seem upset by e-mail exchanges," said John Alexander, the company's Redwood City, Calif.-based director of human resources. A major problem? Not exactly. But Israelis, who tend to be rather direct, and even blunt, were sending e-mails that seemed, well, a bit rude to their American counterparts. And, he said, the Americans were sending e-mails that seemed wishy-washy.

Americans, for example, tend to frame requests with phrases like "Thanks in advance for sending me..." and Israelis would say, "Thanks for what? I haven't done anything yet," said Laurie Guarino, a member of the company's public relations staff.

Although individual incidents tended to be rather minor, the company knew that cumulative effects could affect morale and hinder the development of the team. Check Point brought in an Israeli-born consultant to help Americans understand how Israelis think and communicate. "Now," said Guarino, "I'll simply write something that's polite, but very direct, like 'Please send me the memo by 5 p.m. your time.'"

Check Point's managers dealt with the situation before it became a major issue, but not recognizing--and ameliorating--conflict when it does occur is a common problem in virtual settings, Neale said. "People hope conflicts will go away. But they get worse. It is the responsibility of the team leader to be hypervigilant, to keep these problems from spiraling out of control," she said.

Staying on top doesn't necessarily mean bending your budget to acquire new technologies. In any case, the current economic slump makes it difficult for managers to win the case for exotic new technologies. But even in better times, whiz-bang technology isn't always the key to success. Neale recalls one company that "spent inordinate amounts of time trying to get the latest and greatest technology and then found out that what their people used was the telephone."

"The telephone is easy, it's synchronous, and it's broad-banded. That is, I can get a lot of information from your voice if I know you," Neale said. By now, most people understand the downside of e-mail: flaming, inadvertently distributing messages very widely, and shooting from the hip. But it's also worth noting, said Neale, that e-mail, unlike spoken communication, gives the author a chance to finish a thought without interruption. And it gives people time to think, because they don't have to respond instantly.

Neale and her colleagues have found that e-mail is the key enabling technology for virtual teams. One drawback that, in fact, extends to the whole virtual team process is the difficulty of sharing knowledge. Reading a long e-mail thread can be difficult, and many search engines index e-mail poorly. Moreover, some organizations lack the storage space to archive it for long periods of time.

More broadly, much of the knowledge developed by virtual team members is scattered across their computers, filing cabinets, and most important, their brains. When they leave the company, how can that knowledge be retained? Although corporate portals and sophisticated search engines are helpful, there's no easy answer.

What time is it?
Everyone has heard stories about inconsiderate managers who consistently call subordinates in other time zone hours well outside of normal business hours. But less common are organizations that find creative ways to gain advantage from significant time differences.

Although English is the official language of HP's standards group, not every nonnative English-speaking employee finds it easy to communicate in a meeting, especially during a teleconference.
Lode Coen, the art director of Antics Online, a small marketing agency based in Belmont, Calif., works from an office in Brussels, where it is nine hours later. California staffers send projects to him at the end of their workday (which is the beginning of his), go home, and find Coen's additions to the project ready when they log on to the computer system the next morning. The result: a saving of one workday, a crucial edge in an extremely competitive market.

The disadvantage: The window of time for U.S. and European staffers to actually discuss the work is rather small, and multiple e-mails are sometimes necessary to clarify points that could be dealt with in a quick conversation.

Moreover, Antics co-founder Kevin Welsh warns that not every team would cope as well with a nine-hour time difference. "If Lode and Charlie (Antics co-founder Charles Ogden) and I hadn't worked together for years (while co-located at another company), this might not work."

Because Antics is small and close knit, the time difference rarely leads to personal grievances. But avoiding the 5 a.m. conference call is much tougher at a larger business. HP's Monroe said his team has learned to share the pain. "We rotate the hours, so everybody gets to work in their pajamas at times."

Writing about social change more than 30 years ago, activist Saul Alinsky said, "Only in the frictionless vacuum of a nonexistent abstract world can movement or change occur without that abrasive friction of conflict."

Modern business is far from frictionless, of course, so the real question is not can conflict be avoided, but how can it be managed. The first step: Understand that there are different types of conflicts. Neale and her co-authors identified three.

• Relationship conflict is an awareness of interpersonal differences; it may include personality differences, hostility, and annoyance between individuals.

• Task conflict is an awareness of differences in viewpoints pertaining to the team's task.

• Process conflict includes disagreements regarding how to do the task or how to delegate resources.

Conflict can be frightening, but it can also be very useful.

"Task conflict," Neale said, "is the conflict of ideas or controversy. And this is exactly the kind of conflict that is absolutely essential. It's the type of conflict we want to create and encourage in teams because it gets people to share their ideas. The battle of ideas occurs, and something better comes through the interaction--or else we wouldn't even have the team there."

So the task of managers is to ensure that conflict about ideas doesn't turn into what Neale calls a "relationship clash." Not surprisingly, she said, "virtual teams have a much more difficult time distinguishing the conflict of ideas in their virtual environment from the conflict of personal relationships."

The antidote? Trust. The more team members trust each other, the less likely they are to mistake the battle of the idea for the battle of the ego. Again, this places more responsibility on the team leader. "You (the leader) have to be much more intentional about it," Neale said.

Neale emphasizes that successful managers of virtual teams build trust with face-to-face contact. "There's no substitute," HP's Monroe said. "Driving travel costs to zero is a false economy." CES regional teams meet face to face in locations every year or two for three to five days, he said. Alexander and his Tel Aviv-based boss meet face to face at least once a quarter, teleconference weekly, and speak on the phone and e-mail each other frequently. "You can't overcommunicate," he said.

Neale and her colleagues partnered with a large Silicon Valley software firm that asked to remain anonymous. They called it SoftCo. They administered a Web-based survey to 35 teams ranging in size from 2 to 28 members, representing employees from the company's three U.S. locations and a variety of European sites. The teams ranged from those whose members all worked at the same site to a team that had eight members in seven locations.

Here are some of the findings: • The distribution of team members does not have an observable effect on performance. At SoftCo, teams with members who all work at the same site do not receive significantly higher performance ratings from their mangers than do teams with members in multiple locations.

• Virtual teams and traditional teams have the same levels of task and relationship conflict. Process conflict is greater on virtual teams. "As more virtual teams have to manager greater complexity, attention to process can become a key to their success. A similar focus in (more traditional) teams, however, may actually get in the way of efficient and effective standard operating procedures."

• Not all benefits, or downsides, of virtual teams can be quantified. By and large, making them work is a case of finding virtue in necessity. If the results from the SoftCo study are projectable, it suggests that virtual teams focused on noticing conflict may actually have an advantage over traditional teams in managing it.

The dynamics of working in a team are more complex than working alone, and virtual team dynamics are more complicated still, Neale, Griffith and Mannix concluded in "Conflict and Virtual Teams," a chapter in the 2003 book Virtual Teams That Work.

While it is the case that team members, whether virtual or not, need to pay attention to how the team functions, members of virtual teams needs to be especially vigilant, they wrote Problems resulting from miscommunications that may be easily corrected through face-to-face interaction can take on a life of their own in the virtual environment. As such, communication--and, perhaps, overcommunication--among team members may be the key to success when team members are physically, temporally and culturally separate. "Given appropriate resources, by being aware of their situation, they can construct their environments to avoid process conflict, and perhaps find ways to outperform their co-located counterparts."

"Virtual teams don't limit us to physical proximity in choosing members," Neale said. "It opens up a set of players that I may not have access to if I insisted we all have to be here all the time for meetings."

And that's a significant win for business.

 
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