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.

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 Acrobat.com. 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. 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. 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. 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. 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. 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. 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.
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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. 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. 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
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