Virtual Companies: How Your Team Can Successfully do Without an Office

Jan Tissler
9 Min.
Virtual companies

Some have been preaching for many years that remote work is not just a stopgap solution for exceptional cases. Take Matt Mullenweg, co-founder of WordPress . Doing without offices altogether can be an opportunity to work productively and successfully. What's behind buzzwords like "virtual companies" or "distributed companies"? And what do you have to keep in mind?

The year 2020 has introduced new acronyms like "WFH" aka Work From Home. Many a company was suddenly confronted with an issue that had been ignored until then: It had to work without offices. Those who were not prepared for this unsurprisingly fell into a deep productivity valley.

Less micromanagement

This happened simply because the basics were not even there: The necessary tools were completely missing or turned out to be insufficient. But it's not just about the right tools. The way of working has to change fundamentally for virtual companies. How tasks are planned and distributed to employees works differently. So-called remote leadership for agencies and companies needs more freedom as well as more trust - and significantly less micromanagement.

Some of these companies (and their managers) surely long for the day when they can return to "business as usual". Perhaps the (occasional!) home office will then remain as a bonus to boast about in job ads. In practice, however, these organizations will continue to be fixated on and optimized for the office and physical presence.

Working remotely is not a recognized alternative or even the more sustainable model at that moment, but the exception and is seen as a half-baked copy of "real working" on site. At the same time, it is pretended that "real work" and collaboration is only possible if everyone is in the same room or at least in the same building at fixed times.

It doesn't even occur to them that remote work might have its own advantages. Or that the model is the better option for some tasks and professions. Then it seems absurd that companies could benefit from being a "distributed company".

Example Automattic: Remote by conviction

All the greater then the astonishment when successful companies have never been organized differently. Sometimes this arose out of necessity, because initially there was no budget for an office. But then the model remained because it had proven itself.

The best example among many others is the company behind WordPress .com and WooCommerce: Automattic. Founder Matt Mullenweg likes to talk about how "experts" tried to make him understand that this model would never work with more than one or two dozen employees. Today, Automattic has nearly 1,300 employees - and still no permanent offices.

WordPress  Automattic Team
The Automattic team - distributed worldwide

In fact, until not so long ago, the company even had something like an in-house coworking space in San Francisco: you could go there to get your work done and meet your colleagues. But it was used less and less. So Automattic saved those spaces.

Matt Mullenweg could feel vindicated this year in what he has been preaching for so long: the future of many companies is a decentralized structure without offices. "The illusion that offices are about work has been shattered forever," he wrote in a blog post. In the end, offices are more about control than creating a helpful and supportive work environment.

The 5 levels of distributed enterprises

He has set up a model for distributed or virtual enterprises that is modeled on the stages for autonomous vehicles. It is as follows:

Level 0: Remote is not an option

Remote work is not possible, because you have to be present in person for the task. One thinks here of craftsmen, salesmen or even firefighters. Of course, there may be situations and future developments that change this, at least in part. One thinks of remote-controlled or semi-autonomous robots that help fight fires. But as of today, that's not possible.

Level 1: Remote is for emergencies only

Many companies found themselves at this level before the coronavirus pandemic. Remote work would theoretically be possible, but there is no support for it. In an emergency, employees might be able to work outside the office for a day or two. But for the most part, that's when most of the work will fall flat. This is also due to the fact that even basic tools such as one's own e-mail account or calendar are only accessible with difficulty as soon as one is no longer in the internal office network.

Stage 2: Remote is possible, but only in exceptional cases

Many a company has had to raise itself to this level because of the pandemic: they have been forced to accept that many or all of their employees will be working remotely for an extended period of time. To this end, the appropriate technical foundations were created and new tools such as Zoom or Microsoft Teams were introduced.

The processes and thought models, however, have not yet changed. Instead, they are trying to transfer the previous ways of working into the digital world. This works about as well as the "e-paper" version of a daily newspaper on a smartphone: it works with effort, but not really well.

In the case of remote work at this level, this means that everything continues to happen synchronously and you are constantly interrupted. The supervisors are concerned about the productivity of their teams, but do not change the boundary conditions for this reason. Instead, software is supposed to ensure that the employees are actually only working on their projects, or you have to prove that you are actually "present" via a webcam that is constantly switched on.

Stage 3: Remote as an opportunity

From here on, working outside an office is no longer seen as a stopgap solution with many disadvantages, but (also) as an opportunity. You create a better working environment at home or in a coworking space and the company recognizes how valuable asynchronous working can be. Communication takes place more in writing. The personal component also plays an important role (without pandemic restrictions): teams meet for one or two weeks a year.

Stage 4: Remote is the new normal

Once here, the processes become consistently asynchronous. Work performance is evaluated on the basis of results and not whether and how long employees are present in one place. Trust develops and becomes the basis of cooperation. Not only extroverted "loudspeakers" are heard with their opinion, but everyone, because there are many ways to participate in discussions.

Companies can attract talented employees who don't happen to live near the offices or are willing to migration . Employees' home offices tend to be better equipped and much more focused on individual needs than the average office. Meetings in real time are well prepared. Diversity is also strengthened because each person can do his or her work in a way that suits him or her.

Level 5: Remote nirvana

Matt Mullenweg sees this as the "nirvana stage" that may not be attainable. It is meant more as an incentive. At this level, distributed companies are always better, more successful and more productive than their competitors with offices. Employee satisfaction is at a maximum.

Dropbox becomes "Virtual First"

In general, companies like Automattic, Buffer, or Doist have it easier because they relied on distributed teams from the beginning. They did have to make sure that their model still worked with a growing team. But the basic ways of thinking and acting were already in place.

It's more difficult for companies that have to adapt - as happened in the wake of the coronavirus pandemic. On the one hand, they often found that remote work wasn't as bad as they always thought. For another, this forced experiment also pleased many an employee.

Dropbox, for example, revealed in an official statement that 90 percent of its 2,800 employees felt productive at home and did not want to return to a strict five-day work week at the office. To be sure, they also saw drawbacks to working remotely. "Nonstop video conferencing, constant notifications and social isolation" are cited there as examples.

Dropbox Blog
Dropbox is also a pioneer in the blog on the subject of "Work Culture".

However, Matt Mullenweg would point out that Dropbox would just have to dare to move to the next level. These "cons" are signs that the office mindset has been transferred unchanged to the remote world.

It seems that Dropbox wants to work on exactly that. There are to be offices called "Dropbox Studios" all over the world. This includes previous locations such as San Francisco, Seattle, Austin or Dublin. But there are also to be "on-demand spaces for team meetings" elsewhere. The announcement states:

As a result, Dropbox is expected to see greater geographic distribution over time, and teams will have more freedom to choose where they live, work and find new collaborators

The company intends to dynamically adjust the location of these "studios" according to demand.

But as the tiered model above explains, organizational changes are also part of the new, location-independent world of work. Dropbox speaks here of "non-linear workdays". In the future, the company will only designate "core collaboration times" where time zones overlap. It encourages its employees to design their own schedules apart from that. "Dropbox wants to prioritize impact and results this way instead of hours worked." Sounds almost like someone there got smart with Matt Mullenweg ....

Dropbox is also just the latest example from the tech industry. Twitter and Square had already announced they would allow temporary home offices indefinitely as an alternative. And Facebook's Mark Zuckerberg predicted that 50 percent of his employees will work remotely within the next decade.

8 tips for virtual companies

But how do you find your way in the new world of distributed working? The company behind the Todo app Todoist has put together eight useful tips in a blog post to make remote work work better:

1. find your own solutions

Just because another company is successful with a certain tool or way of working doesn't mean it's a good fit for you and your business. Always look at what the fundamental problem is and then look for a solution that fits it. Example in the post: The company tested Slack as a communication channel because so many were using it. However, Doist found that it wasn't a good fit for his global team.

2. set to remote first

In organizations that rely on a hybrid model, remote workers quickly fall through the cracks. They are forgotten in communications as well as promotions. Instead of just enabling remote work, it should be actively encouraged. It should become the new normal.

3. use asynchronous communication

Her example revolves primarily around international teams. But even people who don't live across the globe have their own personal "time zones". Some person starts early in the day, another prefers to work in the evening. Some need several hours of uninterrupted concentration, some work in short bursts.

4. use synchronous communication very selectively

Nobody claims that every question, every problem, every challenge can be solved via chat. But instead of considering synchronous communication like meetings as standard, they should be a well-planned and prepared tool for special moments. This applies, for example, to complex questions, emergency situations, or even so that team members can get to know each other better.

5. document work processes and rules

The better you record how something is to be done, the fewer questions there will be. Good documentation also ensures fewer misunderstandings and conflicts in the agency or company.

6. be careful with new hires

Not every person is well suited for a remote work environment. You have to be able to handle planning your own work and having more responsibility. Communication skills also need to be strong (especially written). Matt Mullenweg, for example, has stated that they don't do interviews at Automattic, they do interview chats.

7. trust is the basis of everything

This is a particularly difficult point for many a leader. Productivity is not when someone looks busy (sitting at a desk in the office, for example), but when results are achieved. There has to be trust that employees are working on their tasks to the best of their ability.

8. don't ignore the negative sites of remote work

For it is equally clear that such experiments have failed in the past. Think of prominent examples like Yahoo and IBM. So you should by no means assume that this issue is a no-brainer. Rather, you need to look at what went wrong in such cases and how you can counter it. It's also important that everyone involved is clear about the pros and cons for them personally.

My conclusion for agencies and companies

What many still do not understand: More creative freedom does not reduce productivity, but rather increases it. As various studies have shown, "more money" as a reward only works for very simple tasks. As soon as people have to contribute even a little bit of intellectual and creative effort, this lure turns into the opposite: The bigger the reward, the worse the outcome. See this animated version of a talk by Dan Pink:

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Generally speaking: People want to do good work, they want to develop, and they want to live self-determined lives. If remote work is implemented correctly, it can give a positive boost to employees' productivity, satisfaction and health. And as mentioned above, such flexible working models open up companies to candidates who would not have been considered in the past.

Virtual Enterprises: What questions do you have for Jan?

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Contributed photo: Olia Danilevich

Jan is an online journalist and digital publishing specialist with over 20 years of professional experience. Companies book him as an author, consultant or editor-in-chief. He is also the founder and one of the editors of UPLOAD magazine. Photographer Author's picture: Patrick Lux.

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