Dealing with Virtual Organizations

Dr. Harry Smith is a business executive with over 30 years of experience in organizational management, development, and change, across a number of industries. In this case study, Dr Smith will present a real-world leadership challenge based on his professional experience that will allow you to place yourself in the same situation and to explore in-depth some of the questions that inevitably arise.

The Case

Five years ago, I took over a business unit that consisted almost entirely of people working virtually. I had nearly 500 people working for me who lived all over the world and worked remotely. They were all directly customer facing, andmost significantly they were not employed directly by my organization, but were contracted to us, mostly on a part-time basis.

To provide some context, our organization had grown rapidly over the previous 4-5 years and was confronting a classic consequence of that growtha start-up culture now requiring scalable structures and processes to ensure that growth and service standards were maintained consistently. As a leader, I inherited very little structure, other than some early attempts at putting in place performance indicators and quality standards, as well as established central units for monitoring service quality. I also had a small group of divisional directors reporting to me, each of whom were in charge of a subunit of my structure with specific and differentiated customer value propositions.

One of my biggest challenges, however, was the very "loose" structure of contracted service professionals who provided the main value work to our customers. These service professionals were highly educated and experienced, multinational, working remotely from anywhere in the world, were mainly part time, and had a tenuous connection to the company. Legally, there were strict constraints on treating them as employees, for fear of violating local tax laws. Because of this, it was very challenging to promote employee engagement and build trust across the team, accurately evaluate performance for all staff, and establish an appropriate organizational culture for this unique situation. I faced a number of questions:

1. How do I introduce a culture of engagement? Provide one effective approach to increase engagement in remote working environment.
2. How can I manage stress in a remote working environment where my employees are contract employees? Give me one example on how to deal with negative stressors and one example of how to promote positive stress.
3. Effectiveness in remote working environment depends highly on communication management. Provide me with two tips to improve communication effectiveness.
4. Dealing with contract employees from different part of the world creates concerns for ethical dilemmas and multiple standards. How can I create a balanced ethical work environment for all my employees with effectiveness in mind?