How Virtual Teams Can Increase Profits

As the global economy continues to grow, transnational corporations are expanding their hiring practices by embracing global virtual teams. No longer are corporate headquarters the mainstay for employees. To attract the best employees while tapping into global knowledge, corporations are expanding to allow professionals to work in a virtual environment. While virtual teams can cut costs, they also provide a significantly more varied team base that contributes to the depth and breadth of an organization. As with all teams, virtual teams can be highly functional or highly dysfunctional. Experienced leaders who understand the dynamics of motivation, leadership, quality and communication across diversified cultural divides are in high demand.

Creating Leaders for Virtual Teams

Before we explore how and why virtual teams are proliferating at an astounding rate across the globe, it is important to look at the leadership skills necessary for managing these teams. Professionals who have vast experience in managing in-house, onsite corporate teams often lack the base skills necessary for success in the virtual world. One of the strengths of a virtual team is the range of experience and knowledge that stems from a variety of professional backgrounds and cultural backgrounds. Currently, General Electric boasts that more than 50 percent of its current workforce is based overseas. This provides a competitive advantage that allows the company to access local talented professionals who possess expertise as both a consumer and professional.

Benefits of Virtual Teams

It is vital that virtual team leaders understand the natural differences in communication and motivation to ensure each team member performs to his or her optimal capacity. BP, Nokia, and Ogilvy and Mather are all successfully utilizing professional virtual teams. These organizations and others find that virtual teams boost collaboration, creativity and efficiency. Before virtual teams were common, if the ideal employee lived across the globe, relocation was required. Today, these individuals can stay in their current location and telecommute as part of the team. A recent poll found that 52 percent of corporations surveyed reported that virtual teams are used as "top management" and 79 percent are used as "project teams." These numbers are projected to grow in the coming years.

One of the overlooked benefits to functional virtual teams is the "follow the sun" practice. While some managers may think they want all team members to work the same hours regardless of location, this is not efficient. A virtual team that is comprised of professionals across the globe allows for a 24-hour productivity cycle. As members in one area are wrapping up their day, team members in other time zones are starting their day.

One of the risks that corporations with highly concentrated onsite teams face is the "group-think" mentality. While a homogenous team may be easier to manage than a virtual team, the experience, perspective and vision of a multinational team provide much needed insight for tapping into global markets effectively. Statistically, more than 70 percent of the world's purchasing power is concentrated outside of the United States, so teams without true global insight run the risk of limiting their global market share.

The Need for Diversity

According to Nestle, foreign sales of its products total 97.8 percent of its total sales. Missed opportunities for marketing, sales and management abound when team member diversity is not embraced. Marketing gaffes happen often when teams are centrally located in the United States and the customer's culture is not embraced. This is not the fault of team members but due to hiring a homogenous team with little understanding of cultural differences and dynamics. Virtual teams that span the globe help to ensure that marketing communication messages are effective, timely and not offensive. A company like Nestle, which thrives because of its foreign market share, must tap into the knowledge and expertise of its markets. Virtual teams are the ideal component to bridge cultural gaps and increase profits.

Who's Seeking Telecommuting Jobs?

Telecommuting once was a function of lower level professionals. This no longer is the case. Professionals from all walks of life, with a wide array of professional backgrounds and education levels, and in nearly every corner of the globe are seeking the freedom, autonomy and collaboration that come with working as part of a virtual team.

According to Global Workplace Analytics, 3.1 million workers in the United States telecommuted in 2011, which represented a growth of more than 70 percent in just six years. After the economic downturn of the last decade, many corporations consolidated their headquarters, leaving many professionals far from a job. This has fueled the desire and demand for professional telecommuting jobs.

A 2012 survey conducted by the Society for Human Resource Management found that virtual teams are becoming more and more prevalent. In fact, according to the survey, 28 percent of U.S.-based corporations use virtual teams, while 66 percent of multinational corporations embrace these types of teams.

As corporations continue to look for ways to cut expenses and raise productivity and collaboration for greater profits, analysts believe that the number of virtual teams will continue to grow. The importance of leaders who have the knowledge and expertise to lead in a global environment is paramount for success. Effective communication with members of global virtual teams as well as effective marketing communications aimed at a global consumer must be the focus of all organizations seeking greater global profits. 

Source: USC's online MCM