Enabling Effective Change in Virtual Teams
A Review of Essential Organizational Change Factors
Enabling Effective Change in Virtual Teams
A Review of Essential Organizational Change Factors
Abstract:
A number of organizational change factors have been found useful in enabling virtual teams to effectively change, including culture, work climate, leadership, communication, vision/strategy/mission, organizational design/structure, and organizational agility. When combined, these factors provide a backdrop for successfully managing and evolving today’s geographically distributed virtual workplace.
Microsoft Services
Author:
George Anderson, Architect, Microsoft Services
Publication Date:
April 2012
Version:
1.0
We welcome your feedback on Enabling Effective Change in Virtual Teams. Please send your comments to the Microsoft Services Enterprise Architecture IP team at .
Acknowledgments
The authorwants to thank the following people who contributed to, reviewed, and helped improve this whitepaper.
Contributors:
Paul Slater
Thanks also to:
Jon Tobey
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Table of Contents
1Executive Summary
2Essential Organizational Change Factors for Virtual Teams
2.1Culture
2.2Work Climate and Morale
2.3Leadership Implications
2.4Preferred Virtual Team Leadership Styles
2.5Managing Communication
2.6Vision, Strategy, and Mission
2.7Organizational Design and Structure
2.8Setting the Stage for Organizational Agility
3Conclusion
4References
© 2012 Microsoft Corporation
Enabling Effective Change in Virtual Teams
A Review of Essential Organizational Change Factors
1Executive Summary
The purpose of this paper is to explore a number oforganizational change factors that have been shown to be useful in enabling virtual teams to effectively change. The factors include culture, work climate/morale, leadership, communication, vision/strategy/mission, organizational design/structure, and the collective impact these factors have on a final factor—organizational agility. When combined, these factors provide abackdrop foreffectively managing and successfully evolving today’sgeographically distributed and likely culturally diverse virtual workplace.
2Essential Organizational Change Factors for Virtual Teams
Well-known leadership guru Tom Peters once remarked “Itis easier to kill an organization than it is to change it.”[1] No modern-day organization is as fraught with change as those that are dispersedacross time zones, geographies, and cultures. For this reason, the theme of geographically distributed or “virtual” project-oriented team challenges has become one of the foremost issues faced by organizations today.
Remotely dispersedteams place a special burden on organizational change. This burden is especially apparentwhen local executive leadership is absent and the functional teams that comprise the organization do not lend themselves to a clear-cut organizational authority or division of labor. In such scenarios, organizational design, or “the process of defining and coordinating organizational structure elements”[2] can drive the structure and development of such teams and its team members in many directions. Certainly no one approach is always ideal, but without a yardstick to measureorganizational change effectiveness, developing a geographically distributed team is challenging at best. Transformational leadership tenets can provide a yardstick, to be sure, but experience has uncovered a host of factors or attributes that are germane to organizations and those leaders who have shown themselves adept at successfully introducing change.
First, it has been shown that attention to the external environment is paramount.[3] Whether an organization adopts a whole-systems approach to change or a model colored in some other manner by open systems theory, working within the confines and constraints of a particular environment with the knowledge that the environment is only a microcosm of a larger environment is a constant. In the end, only whenthe larger environment is taken into consideration—along with inputs, outputs, and a timely and appropriately vectored feedback mechanism—can the other core change model components or themes be leveraged. Outside of attention to the external environment, a review of successfully changed organizations suggests that effective change is also predicated on the following essential organizational change factors:
- Sensitivity to organizational culture
- The ability to transform climate or morale for work teams or workgroups
- Transformation-enabling leadership styles and behaviors
- Effective and productive communication
- Attention to vision, strategy, and mission
- Organizational design and structure
- The ability to enable and give impetus to organizational agility
Each of these factors is examined in the following sections in context of what it means to effect change in a geographically distributed virtual team organization.
2.1Culture
More so than any other factor, true organizational change is affected by culture, which can welcome change or push it aside in favor of maintaining the status quo. For example, in a study of hundreds of chief information officers (CIOs)who are responsible for deploying transformational Enterprise Resource and Planning (ERP) solutions around the globe, culture was identified as the number one factor.[4]Effectively cultivating and managing culture to accept change is therefore critical to enabling organizational change.
Culture is one of several factors (in addition tostrategy, organizational structure, and several others) with the capacity to modify the very patterns of existence or deep structure that defines the organization. Without culture change, authentic organizational change is difficult to accomplish if not impossible.[5] Steering an organization’s culture can revolutionize or transform the organization, unlike the continuous improvement changes most organizations naturally plan for and seek as they evolve and grow over time. Cultural pressures affect organizational performance and explain why individuals and teams alike will seek out and pursue lofty goals, even at great personal expense and sacrifice.[6]
Thus, creating a culture that is equipped for and receptive to change is necessary. Fortunately, as borne out in practice and academia, cultures can indeed be cultivated that are naturally more inclined or prone to accept change.[7]However, in today’s world of geographically distributed multicultural organizations, developing a culture that is amenable to change is hard work. After all, you can’t “change culture by changing culture.” Instead, you need to influence other organizational factors that in turn affect culture.
The need to purposefully influence work climate, another essential organizational change factor, is examined next.
2.2Work Climate and Morale
Effective leaders understand that creating a great place to work requires attention to more than organizational culture. Why? Because the “local” atmosphere found within a work team is eminently more critical to individual employee satisfaction and team productivity than the culture of the organizationas a whole. A good organizationmight lure top talent in the door, but unless the work team to which the newcomer is assigned understands the importance of work climate and management seeks to preserve a healthy work climate, retention will suffer. Ultimately, the organization’s development will also suffer as its productivity flounders amid morale and esteem-related issues and related problems.
In particular, work team morale is central to work climate; the quality of work life is reflected in employee well-being or morale, enabled by empowerment, and embodied by job satisfaction. It is one of several factors that comprise group dynamics ultimately worker happiness and productivity.[8]Interestingly, the overall work team atmosphere amounts to how individualsview both their future and their past in the context of the organization. The fact thatthe morale of a group is stronger when the group plays a role in crafting its own environment or circumstances is a clear indicator of work climate’s power to transform organizations, although admittedly not as much as the deep structure changes made possible by changing culture.
Many organizational change experts view work climate as a transactional rather than transformational lever in the development of an organization and how it adapts and transforms in the face of change. Yet as the central factor in the Burke-Litwin model, it is equally clear that all roads—all organizational change factors—lead to work climate. It may not transform the organization in and of itself, but the quality of an organization’s work climate directly affects the receptiveness and effectiveness of that organization’s ability to change.
2.3Leadership Implications
The increaseof geographically distributed teams has placed a burden on core organizational change and leadership theory today, especially in cases where the team is similar to an island or string of islands around the globe—far from local mid-level and executive leadership, isolated in a sense, but critical to organizational success nonetheless. A mix of leadership styles (transformational, transactional, contingent, and others) acts as the leadership basis for most of these cases.
However, teams must be fine-tuned at a minimum, or sometimes reinvented altogether, to be initially fruitful and certainly to remain effective long-term. The underlying reasons are many. First, a well-performing geographically dispersedteam implies a team that, by its nature, must be comprised of mature self-directed and highly motivated personnel. With the absence of “local management,” only the most competent and self-sufficient individuals will be successful long-term; a successful geographically dispersedteam alludes to the need for consummate professionals of high self-esteem and self-efficacy. In the absence of such professionals, a particular leadership style may be necessary to maximize team effectiveness (along with the need for much more active “management” on the part of leaders).
Second, a geographically dispersedteam inherently implies time-zone and cultural differences (whether across town or across countries), both of which demand leadership that is characterized by excellent communication and relationship skills. Boies[9]found that “members of face-to-face groups reported feeling more interpersonal attraction towards other team members than did members of electronic groups” or virtual teams, thereby affecting individual contributions to achieving the team’s goals. Introducing face-to-face meetings in a virtual team environment is clearly valuable when possible; when not possible, supplanting these with virtualized face-to-face meetings is preferred over voice-only or asynchronous methods such as email and voicemail.
Finally, remote teams require more feedback, acknowledgement, and typically more attention to creating a sense of connection or belonging than their centralized team counterparts. The virtually managed team requires a leader adept in building cohesiveness and monitoring work climate; physical proximity to leadership does not minimize an individual’s innate need to belong and be connected. Connectedness and communication ward off employee retention issues[10], after all, essentially an unavoidable organizational life-cycle phenomenon that generally must be minimized to maintain a highly productive and happier team.
2.4Preferred Virtual Team Leadership Styles
To be effective in an environment that is subject to ongoing change, especially the kind of change that necessitates improvisational attention, certain leadership styles should be embraced and others avoided. An autocratic method is counterproductive; virtual team leaders even more so than their centralized counterparts need to feel that they are a part of the decision-making process, that they have a say in the team’s organization and circumstances. A contingent reward leadership style might do well in managing the simplest of administrative or organizational tasks, but will do little for building a cohesive team. A servant-led leadership style would also prove less effective in such location-challenged circumstances, in that much of the team-building communication between team members and leadership might be unnecessary in the wake of the leader’s “taking care of business” approach to leadership. And charismatic leaders, althoughinspiring and interesting to work for, would find themselvesat odds with the reality of completing the more-than-typical time-consuming tasks of team administration, retention, and task coordination.
Case studies and academics disagree which leadership style is most effective for leading virtual teams. In some cases, the most effective leader of virtual teams seems to be the relationship-oriented leader.[11]And because relationships must necessarily be maintained across time and space, not only is an outstanding communicator required, but also one that is willing to learn and entertain new communications mediums (from instant messaging to chat rooms, video-conferencing, net-meetings, and more – anything to band the team together and build intra-team relationships). Indeed, the most effective transformational leaders must embrace more than change—they must seek out and inject innovation into their organizations to be the most effective leaders and managers of their teams.
In other cases, the best type of leadership for a dispersedteam that is faced with impending change is one that balances transactional and transformational approaches. The transactional side of the leader could presumably ensure that administrative matters are addressed, that tasks are optimized relative to workflow and overall efficiency, and that matters outside of the individual team members’ control are seen to. The leader’s transformational side could embrace each team member’s ideas and suggestions for improvement, facilitate the exchange of these ideas among team members, and then effect change as the team deemsappropriate.
Other research has shown that a particular type of leader fares best in maximizing both organizational performance as well as work-climate morale. Labeled an “achievement-oriented” leader, this person typically maintains a strong task focus while setting forth challenging “stretch” goals for the organization.[12] More effective than his power-oriented or relationship-oriented counterparts, the findings associated with this achievement leader set the stage for Burke-Litwin’s focus on work climate as the model’s centerpiece. However, without sound communication, such leadership will still fall short, as explored in the following section.
Experience shows that combining transformational leadership with attention to organizational design and other important details serves to develop and promote a set of common beliefs or values, thereby fostering a consistent and more effective corporate culture and stronger work climate. In this way, the organization can be motivated to achieve a greaterlevel of group performance than is individually attainable, which sets the stage for transformation that enables both deep structure change and improved work team productivity without sacrificing morale, longevity, and esprit de corps.
2.5Managing Communication
Sound, timely communication is essential not only to leadership and effective management practices, but to the organization and its mechanisms for change. Communication affects culture and it influences work climate.[13] Communication is the primary driver behind converting strategic vision into strategy, mission, and finally change. It gives substance to change; great leaders possess the ability to effectively communicate their vision both inside and outside their organizations. Through effective communication, “leaders breathe life” into their visions, thereby enabling change through contagious enthusiasm and a can-do spirit.[14]
Given their distributed structure, virtual teams present unique communications challenges. Workers need to be shielded from unnecessary and therefore distracting disturbances while still maintaining open lines of communication.
Communication plays a role in propping up employee morale, too. Of course, the effect on morale still largely depends on “whether the information being communicated is good or bad news.”[15]That technology can more rapidly and accurately communicate problems and opportunities, or improve decision making, matters little to employees who are unable to take advantage of such technology.
What of the future modern-day workplace, though? Given the overarching need of all systems to maintain their own integrity and continuity,[16] improved communications within the realm of virtual organizations was precisely what Gibb[17] called for when he described his TORI trust model (Trust, Openness, Realization and Interdependence). According to Gibb, high integrity promotes improved communication, and sound communication in turn promotes greater trust. Levitt and colleagues[18] describe the methods and values of communication and coordination that are necessary for distributed teams in light of global virtual work processes that “include measures of activity flexibility, complexity, uncertainty, and interdependence strength.” Organizations founded in anything other than sound communication, underpinned by trust and optimized for virtual teams, run the risk of limited longevity for themselves and their constituents. This risk is especially evident for inherently complex multicultural teams.
2.6Vision, Strategy, and Mission
A number of traditionally strategic factors combine to enable widespread change. These factors are vision, strategy, and mission. Mitchell’s[19] view on this is pragmatic: “Strategy-making ensures that organizations are responsive to their changing external environments and to their stakeholders and clients.” Burke[20] shares important dimensions of effective change models, primary of which is transformational strategy or strategic vision. Effective change models thus necessarily incorporate an understanding of the current state, a desired or future state, and the steps or phases deemed appropriate to navigate between the two. Burns[21] (1978) describes these steps or phases as “when a person imagines a state of affairs not presently existing…[ultimately] elaborated into a broader vision of change.” Because vision, strategy, and mission are generally accepted as self-evident principles of effective organizational change and management, discussion of them in this paper is limited.
2.7Organizational Design and Structure
The purpose of organizational design is to create a structure or design that serves to effectively coordinate organizational tasks and motivate people to achieve an organization’s objectives.[22]Rottman and Lacity[23]further define this factor as “the capability to design and implement organizational arrangements to realize plans and contracts.” Organizational structure has also long been viewed in terms of an adaptive organism shaped in reaction to the characteristics and commitments of participants as well as to influences from the external environment.[24] Such an “institutional” approach or framework could naturally evolve and change as an organization’s needs or mission changed. To extend the biological metaphor, organizations would seem to have lives of their own, looking and acting in many ways like individual personswith individual person-like behaviors.