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Effective virtual projects
by Nick Fryars

The ability to execute virtual projects – projects where the team members seldo...
A more fundamental issue is that there are still no coherent suites of related
technologies to support virtual projects. F...
5. Creating ‘paths to success’: lessons from demonstration projects that give
        managers of virtual projects example...
There must be motivation for each of the team members to make the project work. A
team member assigned to a glo...
The team needs to understand these different          Common cultural pitfalls
settings to communicate and collaborate    ...
2. The ease of ‘dropping out’: in a virtual project it is easy to ignore team
        commitments by not answering e-mails...
Prepare                               Interact                        Report
• Organize information             • Capture ...
Figure 3: Part of an interview captured using comapping, with the focus on one topic

    Built around structured informat...
1. Management of a virtual project: this paper has given some clues as to the
        specific competences required to per...
1. Develop virtual projects framework and toolset and make available.
      This should include an initial set of project ...
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Effective Virtual Projects


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The ability to execute virtual projects – projects where the team members seldom or never meet physically – is becoming an increasingly important capability for international organizations. This paper identifies five factors that determine the success or failure of virtual projects, and discusses how to build the capability to execute virtual projects effectively, including those currently thought too small to be viable.

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Effective Virtual Projects

  1. 1. Effective virtual projects by Nick Fryars The ability to execute virtual projects – projects where the team members seldom or never meet physically – is becoming an increasingly important capability for international organizations. This paper identifies five major factors that determine the success or failure of virtual projects, and discusses how to build the capability to execute virtual projects effectively, including those currently thought too small to be viable. Globalization, economic crisis and climate change driving virtualization The ongoing globalization of the world economy means that almost all international organizations are under pressure to deploy global initiatives at ever-decreasing costs. Global competition forces businesses to seek to deliver ever better branded customer experiences across multiple geographies, while serving large volumes of upwardly mobile consumers in emerging markets. To do so, they must manage global supply chains of ever greater complexity, synthesising capabilities from multiple countries to deliver optimal performance at least cost. Most couple this with a ruthless focus on driving cost down, in the knowledge that only a few mouse clicks separate them from their competitors in the customer's mind. Governmental and international organizations must address policy issues whose scope is increasingly global. The increasing number of significant players on the world stage – the G7 is now G20 – means that these organizations must work in the context of a growing number of complex international networks. The hard part is that they must do so in an economic context that requires reduction of their own operating cost to meet the constraints of reduced budgets. Possibly the biggest challenge is that both businesses and governmental organizations must meet these demands while reducing the carbon emissions (transportation accounts for about a third of all carbon emissions) and cost associated with travel. These factors, combined with the rapid growth of internet-based technologies, yield a powerful force that is causing a drive to virtual projects, projects where the team members seldom or never meet physically. Yet few organizations have so far built an effective capability in executing virtual projects. No dominant model on the supply side The organization seeking to ‘virtualize’ its projects is confronted with a mass of supposedly enabling technology with ever-changing capabilities at ever-changing price levels. Market offerings vary from high end videoconferencing technology with an investment level of $120k-$350k per room and substantial operational cost (such as the Tandberg technology sold by HP) to low end web conferencing such as that offered by Skype or The former is prohibitively expensive for organizations that cannot achieve a high utilization of these facilities; the latter are often offered 'free' to capture market share, but offers indifferent performance and limited facilities. In the increasingly crowded mid-market there is a wide range of affordable technologies that deliver reasonable performance but that typically have a rigid feature set. © Nick Fryars 2009 1
  2. 2. A more fundamental issue is that there are still no coherent suites of related technologies to support virtual projects. Few suppliers seem to have looked at how a virtual project works in practice. Possibly this is driven by the lack of experience that still exists in most major multinationals with operating truly virtual global projects. There is significant activity in this field. For instance, several major corporates have recently implemented global workplace communications based on technologies like Microsoft Office Communicator. Yet while valuable in lowering communication thresholds between staff worldwide, this type of tool does not in itself provide an adequate basis for effective project support. The greatest potential is in smaller projects Current corporate practice in running global projects – common types include new product development, IT, organizational change and capital projects – still relies heavily on traditional approaches. Common threads include the use of a professional project office that manages the activities of the global team, and usually involve the need for team members to travel at least several times during the course of the project to attend project events. In practice, this means that global projects with a cost budget under €1.5M and an NPV of €5M 1 are unlikely to get executed, simply because they require a minimum investment level to set up project management that meets corporate standards. Yet potential global initiatives which offer rapid, but incremental, value creation opportunities – such as smaller enhancements to product, supply chain or marketing – can easily be smaller than this minimum size. The result is often that these smaller global projects are not executed and that value creation properties are missed. Effectiveness in executing virtual projects can provide the key to unlock this potential. The reward lies in the ability to gain competitive advantage by being faster, better and cheaper at deploying fine-grained global initiatives than the competition. Recent experiences suggest that effective use of currently available technology can drive this cost budget 'floor' down to €600k and NPV €2.5M. The ability to do smaller, more finely grained global projects effectively can be significant; even 10 such smaller projects would add at least €25M to the value of a company. There are other reasons for favouring these smaller projects: the larger a project is, the larger the amount of money at risk and the more difficult it is to stop. Small projects mean more rapid learning, less money at risk and fewer sleepless nights for senior management. Realizing an effective virtual projects capability The key question is thus how international organizations can create the ability to run finer-grained projects more successfully and thus tap this potential. Experiences with successes and failures in several major organizations suggest that five factors are critical to success: 1. Clear criteria that help determine whether a project can or should not be executed virtually; 2. Rigorously applied ‘rules of the game’ that provide a framework within which the project and the team can work; 3. Choice of an adequate and sufficiently stable toolset; 4. Explicitly developing competences in running, facilitating and supporting virtual projects; 1 Assumptions include 1 year duration and 4 central project staff. © Nick Fryars 2009 2
  3. 3. 5. Creating ‘paths to success’: lessons from demonstration projects that give managers of virtual projects examples and practices to follow. Getting these factors right can enable an What a physical meeting costs organization to execute a small global project A single 3-day meeting involving 10 virtually both faster and cheaper than when a people in 1 location can easily cost conventional approach is used. Greater speed can €20,000-€30,000 more than if they be achieved because the project is less dependent had done the same work virtually. on meetings involving travel, which are often Costs include travel, hotels, meals, difficult to organize and thus consume lead time; meeting facilities and the time loss cost savings can be achieved through the incurred by the travel itself. elimination of most travel costs, through time savings and because the minimum size of the project management team is smaller. Factor 1: clear criteria for what can be done virtually and what should not Some projects can be a great success if executed virtually. Others are doomed to failure from the start. So why was a virtual business planning project a success while a virtual change project flopped? Filtering criteria help determine which projects should not be executed virtually and help distinguish those projects that are promising candidates. Three of the most important filtering criteria are: Threats The degree to which a project threatens individuals’ roles or job security Motivation Whether motivation exists for (candidate) team members to work on the project, regardless of their suitability Sponsorship Whether a global senior management sponsor exists who has a personal interest in the success of the project Threats Almost any change project is threatening to somebody, whether or not it affects job security. A change project may require sensitive interactions with both individuals and groups in order to defuse potential conflict situations and create a climate of acceptance or willingness to change. There may, for instance, be a need to motivate people to work on organizational changes where their own jobs change substantially or even disappear. Scope for 'missing signals' and wrong interpretation of communications is far greater when communication is remote, even when the best possibilities that technology can currently offer are deployed. In these situations there is still no substitute for physical meetings and encounter sessions. An essential ingredient is often that affected staff recognize that “the boss is human too” and is putting his or her best foot forward in a challenging situation. This does not mean that virtual presence technologies should never be used in a change project. Regular high quality video interactions, for instance with the CEO, can substantially enhance a change program in an enterprise with a large number of locations. Planning tasks such as the detailing of changes and their consequences as well as fine-tuning the implementation plan can also be done successfully by virtual teams. © Nick Fryars 2009 3
  4. 4. Motivation There must be motivation for each of the team members to make the project work. A team member assigned to a global project must find a balance between 'local' pressures and 'global' commitments, and must ‘make time’ explicitly for the project in the face of demands for attention from their immediate environment. This is likely to happen regardless of any agreements that have been made concerning the individual’s time, especially when the individual in question is a sought-after ‘expert’. Team members must thus be motivated to meet agreed deadlines and address obstacles themselves without needing outside pressure to do so. The keys to motivation will vary from organization to organization, but a common factor is that there must be some form of formal recognition and reward for each member of a team for their effort and achievements. Where possible this should be integrated into personal targets and evaluations; rewards can vary from points on an evaluation score to a financial bonus or simply an ‘honourable mention’ in the Company newsletter. From the team members’ perspective, it is essential that they have clarity in advance on what they can expect: both from the project (objectives, scope, plan etc.) as in terms of personal recognition; and that they agree with both. Sponsorship A global project, by its nature, usually requires resources that are ‘owned’ by many local managers. These managers will need persuading that their resources should develop time to the project, and this may require budgetary negotiations. Moreover, this allocation will often require defence in the course of a project in the face of shifting circumstances and priorities. A prerequisite for success is thus that a virtual project must be both explicitly funded and defended globally at a senior level; there must be a senior executive with global reach who cares and wants it to succeed. Factor 2: Rigorously applied ‘rules of the game’ The ‘rules of the game’ play an even more important role in a virtual project than in a co-located one. There are three main reasons for this: 1. Global projects require a more explicit framework than when the team is co- located; 2. Measuring progress and making it visible is more difficult – yet more important – with a virtual project than with a co-located team; 3. Team dynamics play out differently with a virtual project and need more explicit support. Why virtual projects require a more explicit framework than when the team is co-located A co-located team usually has a shared picture of their own environment and how it works. The working day looks the same to most and they all operate within the same physical environment. This shared picture provides an implicit structure within which they all work. Members of a virtual team operate in multiple different contexts. They have different organizational positions, different pressures and priorities and different cultural settings. There may be many subtle or not so subtle differences: what words mean (e.g. to ‘table a proposition’ means more or less the opposite in British English to American English), how you ask something or make a comment, how you solve a problem, and how task-setting and evaluation works. © Nick Fryars 2009 4
  5. 5. The team needs to understand these different Common cultural pitfalls settings to communicate and collaborate Many readers will be familiar with effectively. Failure to do so will lead to some of these. Asian team members misunderstandings and inefficiencies, and in the may be reluctant to cause or suffer worst case to serious conflict. An "us and them" loss of face, even if this involves attitude is a very real pitfall for a virtual project apparently bizarre argumentation; and can easily lead to failure. Dutch team members are often used to stating their opinions to The framework for a virtual team must management in a manner that would recognize these differences and provide for be unthinkable in the US. Then there them. Part of this larger framework involves is the notorious British use of under- providing much more 'background' information statement: a manager who says on each team member and their situation than “perhaps you should consider X” may really mean “I want you to do X”. would be normal for a co-located team. The background information needed to underpin a Other relevant cultural phenomena are less well-known to an English- virtual project is both specific, at the level of speaking audience: for instance personal details, and generic, including factors German team members who operate determined by culture, geography and the like. in an environment of relative job Specific elements would typically include security do not have the same pressures as Swiss whose • Role and organizational context: help employment is at will, even if they understand the team member’s purpose; speak the same language and work • Performance measures and targets: help only an hour’s drive apart. understand what criteria the person has Even the Australians have the to meet; capability to surprise by their • Personal details that help make the team tendency to solve problems in member ‘a real person’ to others; these isolation without reference to others should include photos but possibly also – an essential skill if you live several days’ journey into the Outback. video such as an introductory message. Generic elements would include background knowledge on basics such as working hours, holidays and employment basics, but should also devote attention to cultural aspects of the relevant geographies such as: • Hierarchical and social relationships • How respect is gained and lost • How you set somebody a task and give them feedback • How to make a point without causing insult or humiliation • How to make a problem or a challenge visible and shared • How to involve people in solving a problem. Measuring progress and making it visible in a virtual project Progress measurement and reporting is significantly more important to a virtual project than to a co-located one. There are two simple reasons for this: 1. A greater need for stakeholder management: virtual projects are 'invisible' unless explicitly brought to the attention of managers responsible for team members. Maintaining confidence with the manager of each team member is essential to continuity of the project. Each such manager is an important stakeholder who must be given clarity on progress and outlook on a regular, predictable basis. The existence of multiple reporting lines means that even a small virtual project can have substantially more stakeholders than a co- located one. © Nick Fryars 2009 5
  6. 6. 2. The ease of ‘dropping out’: in a virtual project it is easy to ignore team commitments by not answering e-mails and phone calls from team members when these are not 'convenient'. Delays and other problems caused by this kind of issue need to be surfaced as quickly as possible and made visible, initially to the person concerned and secondly to their peers. A practical solution to many of the issues specific to virtual projects is the constitution of a carefully selected and properly functioning Steering Group or Project Board that receives frequent progress updates. Where possible this should contain the 'owners' of all team members; if this is not practical due to the numbers involved, the managers concerned should be copied on the progress updates. Team development phases play out differently in a virtual team Bruce Tuckman identified four phases in team development in a famous paper published in 1965: forming, storming, norming and performing. Later authors have pointed out that the process is often more iterative, with new ideas often leading to a new storming-norming-performing loop, but the basic model has been recognized as universally valid by many sources. With a co-located team these phases are usually clearly visible, and can be managed easily; in a virtual team this is almost always not the case. The most commonly occurring disruptive factor in a virtual team is that team members at different locations get into ‘storming’ mode at different times to the others. This may lead, for instance, to sudden pursuit of an idea or initiative that is locally optimal but globally irrelevant or dysfunctional. Yet it is of major importance to recognize and control this: achieving effective ‘norming’ within a virtual project is once of the most important keys to success. A simple measure is to ensure that all team members understand this dynamic, for instance by including it in a kick-off session. Factor 3: Choosing an adequate and sufficiently stable toolset The toolset and infrastructure used is probably the most important ‘hygiene factor’ for the success of a virtual project. Although project selection and a rigorous approach to ‘rules of the game’ are arguably more important, a virtual project cannot succeed without effective support for communication and collaboration. The vast and increasing number of tools and technologies to support communication and collaboration offer many opportunities, but also the risk of confusion and instability. An obvious requirement is that the toolset should provide support the organization’s standard approach to project management. Recent experience with several virtual projects suggests that three additional aspects are also highly relevant: 1. Strong visualization and collaboration capabilities; 2. Built around structured information sharing; 3. Updated only at explicitly agreed intervals. Strong visualization and collaboration capabilities Working together at a distance is challenging, because it is more difficult to communicate effectively via a computer screen and an audio link than in a face-to- face setting. Tools that explicitly structure and support communication within the limits of a computer screen provide the main building blocks of effective virtual collaboration. In a virtual team, much of the collaborative work is done in sessions with a common structure: © Nick Fryars 2009 6
  7. 7. Prepare Interact Report • Organize information • Capture and organize • Provide immediate • Define the process the discussion feedback • Inform the participants (immediate feedback) • Add top and tail: • Enable all to context and structure participate • Record in a place all • Allow focus on detail or can find overview • Integrate lists • Keep the meeting (decisions, actions, structure visible issues, risks) to ensure continuity and visibility Figure 1: Structure of a web-based working session The ‘interact’ step is obviously the most crucial. Yet most standard office suites are not designed with this kind of interaction in mind and hence often provide sub- optimal support for running web-based meetings. Adding a 'communicator' skin to these tools, as Microsoft has done, does not address the fundamental shortcomings of these tools as collaboration aids. Curiously, many new web-based tool suites such as those deployed by Google, Adobe and Zoho continue to use the existing office suite paradigm. Figure 2: An annotated tree structure from a discussion captured using MindManager Mind mapping and associative diagramming tools are often better for supporting a discussion, especially when they enable decisions and actions to be extracted easily. Although there are multiple offerings in this market segment, the choice is much smaller. Mindjet’s MindManager is the clear leader and provides compatibility with the Microsoft Office suite, including MS Project. Cheaper, but highly effective, web- based alternatives include comapping and MindMeister. Comapping in particular has made an art form out of making effective and easy to understand use of a small screen. © Nick Fryars 2009 7
  8. 8. Figure 3: Part of an interview captured using comapping, with the focus on one topic Built around structured information sharing Team participants will typically have different working environments with different ways of organizing information. A shared structure must be 'idiot proof' and intuitive, as it competes for 'share of mind' with individual team members' normal working environment. Moreover it must make all relevant information accessible and usable, regardless of structure. It is thus important to create a shared information structure where everyone knows or can see what there is, how materials are related and how they fit in the overall scheme of things. Managing changes and versions also requires showing what is current and what documents carry a formal status (such as “Approved by the Steering Group”). Typical environments like SharePoint, Livelink and Blackboard do not meet these criteria 'out of the box'. Well thought-through but preferably robust and simple tailoring is almost always needed. Updated only at explicitly agreed intervals In an environment where technology plays and important roles the temptation to update to include new features and functionality is often great. New offerings almost always promise results better, faster and cheaper. Nonetheless, this temptation should be withstood, since changes can easily disturb the carefully constructed shared understanding of how the virtual project environment works. (Remember the norming?) Changes will, of course, be necessary and opportune, but should only be carried out at regular, planned intervals with clear communication to all those affected, including an audit trail: “what was new in version 2.3 on October 1st”. Factor 4: developing competences in running, facilitating and supporting virtual projects Few, if any, large organizations have training programs explicitly geared to the effective execution of virtual projects. As a consequence, few staff are particularly effective in running or even participating in such projects. A detailed description of development of these competences is beyond the scope of this paper, but empirical evidence suggests that three areas, at least, require particular attention: © Nick Fryars 2009 8
  9. 9. 1. Management of a virtual project: this paper has given some clues as to the specific competences required to perform this task effectively. 2. Facilitation of web-based meetings: this is the ‘sharp end’ of many virtual projects and not currently a common skill. Understanding of the process illustrated in Figure 1 is essential, as is mastery of the toolset and sensitivity to the different organizational and cultural context of the participants. 3. Infrastructural support: multiple virtual projects with similar structures and supported by the same infrastructure are likely to give rise to many similar queries and support needs. These may be technical in nature or relate to templates standard working methods. To prevent multiple ‘re-inventions of the wheel’, effective and visible support is needed. A starting point for improvement is recognizing and rewarding this kind of competence. This can be done by making these competences measurable and including them in the formal competence/ performance appraisal system. This must, of course, be supported by development opportunities and training that allow individuals to realize these competences. The core of any such training should focus on project selection (what projects are and are not suitable), creating the framework and preconditions and actually running such a project Factor 5: Running a number of (well-supported) demonstration projects Any ambitious and competent potential project manager wants to know how to make a success of a project before launching into it. This means that there must be a visible 'path to success' that he or she can follow. In an organization that has no history of managing virtual projects effectively, such paths are difficult to find. Jump-starting a virtual projects capability therefore requires success stories that can serve as examples, in addition to the preconditions discussed above. Preparing the ground by executing a few well-supported and well-publicized demonstration projects can create these success stories while refining the framework needed to support them. * * * So how does one create a capability to execute virtual projects? A tried and tested approach to developing almost any new capability uses five steps and is shown below: Develop 1 framework & 3 4 5 toolset Execute Evaluate projects Launch demonstration & adjust frame- framework/ Identify 2 projects work/toolset toolset demonstration projects In slightly more detail: © Nick Fryars 2009 9
  10. 10. 1. Develop virtual projects framework and toolset and make available. This should include an initial set of project criteria, ‘rules of the game’, virtual project toolset and training material. 2. Identify 2-3 demonstration projects. These must meet the ‘virtual project’ criteria, must be capable of being executed in a few months and have a clear, readily understandable worth to the organization 3. Execute demonstration projects. These must be provided with sufficient support and expert facilitation to assure success; staff involved be must adequately trained before commencement 4. Evaluate demonstration projects & adjust framework/toolset. The demonstration projects are formally evaluated and learnings captured. The toolset, criteria and rules are adjusted as appropriate. Requirements for permanent support + infrastructure are established 5. Launch 'virtual projects' framework/toolset. Positive experiences and ‘best practices’ from demonstration projects are worked up into ‘success stories’, e.g. ‘how Azahari, Berthe, Jane and Mustafa developed Product X in 4 months. A ‘roadshow’ is developed to promote benefits of virtual projects throughout the organization, and to publicise the framework and toolset. The above is a standard blueprint and assumes that an organization is starting from scratch. In some cases the starting point will be different as the organization may already have some of the pieces in place, even if it is not reaping the benefit from them. So probably the best recommendation is to ‘start somewhere and make sure you build the capability’. An international organization that cannot master virtual projects is unlikely to survive long in tomorrow’s globalized, carbon-restricted and low cost world. About the author Nick Fryars is a highly experienced strategy and organizational consultant who has led international teams on many strategy and performance improvement projects in major multinationals, for government departments and for public-private partnerships. Much of his work is done with global virtual teams using web conferencing and visualisation tools. He has researched factors contributing to success or failure of new strategic initiatives. In addition to consulting Nick teaches courses in hypothesis-driven problem solving, strategy development and action- oriented communication on complex subjects © Nick Fryars 2009 10