Though IT projects at ISO were coming in on time and on budget, Roy Nicolosi had the grudging suspicion that something was wrong. “We were having some emotional friction,” says Nicolosi, CIO and vice president of the Jersey City, N.J.-based provider of risk-management products and services for insurance, finance and other industries.
ISO has been on an aggressive acquisition pace; in just the first quarter of 2005 alone it bought two companies that provide fraud-protection services for the mortgage industry.
This rapid growth certainly brought up clashes in style between the conservative parent company and the entrepreneurial firms it was absorbing. Also stirring the muck within the parent corporation was the kind of occasional feuding between silos that is common to most large organizations. But Nicolosi realized those were just symptoms, not the disease. “We didn’t know what medicine we needed,” he says.
Until, that is, he learned about a new concept that provided a framework to identify the specific problems faced by ISO—and by almost every large company in the world today: “virtual distance.”
Though project teams and co-workers at ISO work closely together using e-mail and other collaboration tools, they are kept emotionally and physically apart when much of their interaction is conducted through technology rather than face-to-face.
Karen Sobel Lojeski, the program director for the business and technology program at the Stevens Institute of Technology, coined the phrase “virtual distance” after studying how ISO and some 300 other companies are affected by virtual teams.
Click here to read the other two parts of this series: Part II: Make Your Team Stronger by Bridging ‘Virtual Distance’
and Part III: Four Ways to Make Virtual Teams Work
Many companies understand that teams can become disjointed due to physical distance, time-zone differences or organizational differences (such as whether people work for different subsidiaries). Her virtual-distance model measures eight social or cultural factors that determine how distant, or disconnected, team members feel from each other, no matter where they are in physical space.
One of her preliminary studies suggests that greater virtual distance results in lower trust, muddled goals and diminished success in such measures as customer satisfaction.
Performance Degraded by an Abstraction
Like Nicolosi, most of the study participants had a vague sense that virtual distance was causing trouble, but they had no idea of the actual performance or financial impact—let alone what to do about the problem.
“Managers are spending an extraordinarily greater amount of time planning and coordinating virtual teams than they did before,” Lojeski says. “They have a difficult time knowing whether the members of these teams really understand what they’re talking about when they communicate with each other.”
At first glance, virtual distance would primarily seem to be an outgrowth of globalization and outsourcing. Certainly, Anupam Gupta, founder of a data-warehousing consulting firm named Avenues International Inc., worries about the virtual distance between his U.S. operations and programmers in India. However, like many executives, when Gupta looked at this problem more closely, he found that virtual distance was also an issue among American members of some teams.
Ironically, virtual distance isn’t primarily a matter of distance. One company in the study, for instance, banned most forms of virtual work. Eighty percent of the employees worked in the same location, but still the firm’s overall virtual distance was just as high as for firms with teams scattered around the world.
Virtual distance can be caused not only by real distance, but also by such things as teams that are too large. It can result from having team members at different social ranks—like a vice president and a Java programmer—which makes some people wary about talking openly for fear of upsetting their superiors. These factors create psychological and emotional distance by stifling interaction, particularly when team members often communicate without being physically present.