Going global is often a requisite growth path for businesses seeking to expand and whilst the model of setting up satellite offices is a tried and tested way to expand overseas a more recent organizational model is that of ‘distributed’ teams or companies.
What exactly defined a distributed company though and what are some of the challenges in running a company using this relatively new organizational model?
Distributed Teams: An Overview.
Also referred to as a virtual or geographically dispersed team, a distributed team is a group of people who work as a team across time, space, and organizational boundaries. Some equate distributed teams to remote teams, but they are not always the same. Creating remote teams, however, does not usually have the conscious intention of dispersing team members across different geographical locations. Remote workers are hired regardless of their location (e.g., it can be in the same city, but not within the same physical office). In contrast, distributed teams are created with the goal of having team members based in specific locations.
In terms of organization, a distributed team is not like a “branch office” or “country office” approach, in which a company has a head office or headquarters in a certain country and discrete units in other countries. This is a new paradigm for doing business–the entire company is considered as one contiguous unit, despite the distributed nature of its offices or employees.
Overcoming the Challenges of Running a Distributed Team.
Distributed teams certainly have their advantages. However, setting up and managing one entails some challenges. In addressing these challenges, it’s important to consider the basic points of finding the right people, using suitable software tools, and effective management.
The Need for a Harmonious Work Culture.
It’s not easy working with people who come from different cultural backgrounds. Distributed teams may need to establish new playbooks to manage day-to-day interactions, on top of the usual drawbacks, which include employee loneliness, dissatisfaction, and the feeling of not having opportunities for development.
To mitigate culture-related issues, companies need to hire the right people who are willing to work together considering the diversity of other employees and adapt to a remote-based work arrangement. On the other hand, software can be used to help bring distributed employees together by facilitating a semblance of “water-cooler-talk” and “team-building” activities in a distributed environment. An employee performance management platform like Glint can help achieve this as it provides employee engagement solutions that allow companies to track and improve worker satisfaction, development, as well as culture.
Global Payroll, Cross-Border Payments, and HR compliance.
Going global entails differences in labor laws and computation of pay, benefits, and taxes. Unfortunately, many companies resort to highly manual processes as they handle payroll for their international operation. To address this, businesses will need a unified way to handle payroll for a distributed workforce. A global human capital management or HCM system for distributed teams will also make it possible to address compliance needs and streamline payroll processing for workers across different countries.
To get up and running quickly with overseas hiring companies can make use of Employer-of-Records or EoR. These can take care of formal employment arrangements for distributed teams in different countries — something that will be useful in taking care of taxation, benefits, and other labor law compliance matters outside of the one’s own country – without having to set up formal legal entities
Collaboration and Communication.
Working together across geographic distances is another big challenge. Even with all the advanced tools for communication and interaction over the internet, it’s still difficult to avoid employee isolation. That’s why it’s important to hire workers who have collaborative instincts and the natural inclination to work with others. Additionally, businesses should employ the right collaboration tools.
The choice of a collaboration tool depends on the nature of the task to be undertaken. For software development, for example, there are specialized platforms like Github and Crowdsourcer.io. For those involved in research, Authorea is a good option. There’s also Aconex for those in the engineering and construction fields. When it comes to general collaboration, it’s advisable to choose tools that include screen sharing, document management, and internal communication features like what Fuze and Circuit have.
Having information silos can also be a big productivity killer. Team members might refuse to engage in discussions or share what they know. This could be due to hesitation to interact with unfamiliar workmates or difficulty in establishing rapport.
To promote knowledge sharing, it helps to have the right tools or platforms. Communication solutions like Yac.Chat, Loom, Jamm, and Tandem offer new and exciting ways for both synchronous and asynchronous communication and collaboration as they support not only voice and video communication but also offer screen sharing and other features that facilitate collaboration. A platform like Donut also provides an excellent way to bring employees together and foster strong relationships and collaboration. It helps connect workmates, who may not know each other, through productive conversations and activities that bolster a sense of community.
Ultimately, resolving the challenges of establishing and running a distributed team requires the right people, software tools, and management. Time and culture differences can’t be resolved by software and good management alone. It is important to hire the right people for the job. Likewise, hiring the best accountant would not be enough to achieve efficient payroll management. Companies will need to consider getting software tools that make the process more efficient. The same goes with collaboration and knowledge sharing.
Creating a distributed team requires, at a minimum, the right people, the right software and the right management. Distributed teams have been proven to work, and companies looking for the right human capital regardless of borders, states and citizenship can benefit from this model of working to boost their growth.