Virtual Team Failure: Six Common Reasons Why Virtual Teams Do Not Succeed

The popularity of virtual teams in today’s business world keeps growing. Mostly because new and emerging technologies have made it easier than ever, and the potential cost savings of virtual teams is perfect for companies trying to reduce their budgets. Unfortunately, too many companies fail to take the steps necessary to ensure their virtual teams are successful.

Today, more and more companies are emptying their cubicles and opting for a virtual workforce. For many organizations the cost-cutting nature of virtual collaboration, which allows companies to save money on office leases or other real estate costs and decreases the need for business travel, is simply too hard to resist at a time when budget cutting is priority one. Unfortunately, just because there’s been a boom in working virtually, this doesn’t mean companies opting to go virtual are getting it right.

In today’s complex organizations it is not uncommon to have as many as 50 percent of employees working on virtual teams. It’s not hard to see why. Advances in technology have made it easier to organize and manage dispersed groups of people. And competitive pressures and the needs of today’s global market workforce have made virtual teams a necessity for some organizations.

Unfortunately, having solid business reasons for implementing a virtual strategy does not mean that strategy is always going to be executed well. Many companies have virtual teams that are ineffective and failing the company.

In Virtual Team Success: A Practical Guide for Working and Leading from a Distance (Jossey-Bass/A Wiley Imprint, 2010, ISBN: 978-0-470-53296-6, $50.00,, Darleen DeRosa and I examine the growing virtual teams phenomenon and present explanations for why virtual teams do and don’t pay off for companies. The book leverages our robust global research study and hands-on experience to provide an immediately usable resource for virtual team members and team leaders.

The OnPoint Consulting study referenced in the book was designed to help organizations maximize their investment in virtual collaboration. The study included over forty-eight virtual teams across industries and found that 27 percent of the virtual teams surveyed were not fully performing.

A study discussed in the MIT Sloan Management Review reinforced OnPoint’s findings. In that study, only 18 percent of the seventy global business virtual teams assessed were found to be highly successful.

That means a whopping 82 percent did not achieve their goals. The cause, we believe, is that organizations are approaching working on and leading virtual teams as if the dynamics were the same as those for colocated teams. We found that many organizations simply recycled the same guidelines and best practices they were using for their colocated teams and hoped for the best.

Frankly, that system just doesn’t work. Face-to-face teams and virtual teams are like the proverbial “apples and oranges.” We saw the need for Virtual Team Success because when we started working with various organizations that used virtual teams, we noticed that few actually understood how to set their virtual teams up for long-term success.

DeRosa and I have pinpointed several common reasons why virtual teams fail that any company with virtual teams should carefully consider:

Ineffective leadership. Leadership is the factor most important to the success of virtual teams. The warning signs of an ineffective team leader include (1) the team is not meeting its performance objectives, and deliverables are delayed or of poor quality, (2) relationships between the team members and the leader are damaged, (3) the leader is not clear about the team’s direction or purpose, and (4) the team leader pays more attention to team members who are at his/her location or whom he/she gets along with.

To be effective, team leaders in a virtual environment must be especially sensitive to interpersonal, communication, and cultural factors to overcome the limitations of distance. Organizations should select team leaders who not only have the necessary technical skills but also have the team-building and interpersonal skills required to effectively lead in a virtual environment. If you’re a team leader, get your team organized. Set goals and establish the direction in which you’d like the team to go. And always keep members engaged through timely feedback, team-building exercises, and periodic face-to-face meetings.

Lack of clear goals, direction, or priorities. As with any team, virtual or colocated, a lack of clear goals and priorities will inhibit team performance. And because it is tougher to communicate with and inform team members who are geographically distributed, this can be an even bigger problem for virtual teams. The most effective virtual teams reassess goals as priorities shift over time.

When new virtual teams are formed, the most effective teams outline team goals and objectives immediately. A successful scenario might go something like this: A global engineering team conducts a kickoff meeting to build relationships and outline team goals and responsibilities. During the meeting, the team leader clarifies team member roles and establishes how the team will work together. Once things are underway, the leader uses virtual meetings and regularly updates postings on the team’s Intranet site to inform team members about any updates and changes over time.

Lack of clear roles among team members. In virtual teams, it is especially important for team members to clearly understand their individual roles, specifically whom they report to and who reports to them. Lack of clear accountabilities can have a huge impact on virtual teams.

High-performing virtual teams establish clear roles upfront and continually reassess and ensure clarity of roles over time. Clarifying accountabilities and outlining how and when team members should work together minimizes delays and inefficiencies that are common when working virtually. One global information technology team in our study created a “team handbook” that provided background on each team member and clearly laid out how each person was to contribute to the team. When questions arose during large, complex projects, team members would consult the handbook to determine which team member to consult with. Many of the less effective teams in our study did not clarify roles during their launches and often failed to revisit roles as things changed during their projects.

Lack of cooperation. When a diverse group of individuals is asked to work together to accomplish shared objectives, it takes time to build an atmosphere of collaboration. And because there is a lack of face-to-face contact inherent in virtual teamwork, the process of establishing trust and relationships can be even more arduous.

Office cliques and the conflicts that come with them can still form with virtual teams just as they can with colocated teams. Take, for example, a virtual team in OnPoint’s study that we will call “TeamInnovate.” Two-thirds of that team’s members were located in Philadelphia while the remaining one-third were scattered in different sites around the world. Naturally, the team members in Philadelphia developed stronger relationships with one another than they did with the members who worked outside the main hub.

Unfortunately, this set-up led to the formation of subgroups, which began to impede team collaboration. Several team members routinely worked together on projects and didn’t keep other team members informed. Over time, this lack of collaboration led to a lack of trust amongst team members. The high-performing virtual teams in OnPoint’s study were more able and better equipped to handle these kinds of conflicts than the low-performing teams.

Lack of engagement. When working virtually, it can be difficult to assess individual team members’ levels of engagement because they are in different locations and rarely meet face-to-face. To avoid this common problem, leaders and team members should proactively look for signs of disengagement. 

If you’re a team leader, regularly assess your team by asking yourself the following questions: Are all team members contributing to conversations and projects? Are they attending and actively participating in team meetings? Are team members motivated to take on new work, or are they feeling overwhelmed? Are people working well together, or is there frequent and unproductive team conflict?

Looking out for these common red flags can help prevent engagement issues from derailing a team. With virtual teams people can easily become bored and “check out” because there is a lack of dynamic face-to-face interaction and because there are more distractions. So if you are a virtual team leader, constantly assess your team members’ levels of engagement. If you monitor your team’s performance to ensure that the team is always fully engaged, the team’s effectiveness will be much improved.

Inability to replicate a “high-touch” environment. Electronic technology has made virtual teaming possible but is not a perfect substitute for human interaction. One of the greatest performance barriers for virtual teams is the lack of a high-touch environment.

Poor communication, lack of engagement, and lack of attention during virtual meetings are a few of the warning signs that a high-touch environment has not been achieved. While meeting face-to-face requires time and expense, virtual teams who invest in one or two such meetings per year perform better overall than those who do not. Leveraging tools such as Instant Messaging to increase spontaneous communication can also help. We would also advise that teams use tools such as electronic bulletin boards to create a sense of shared space. And finally, be sure to develop a communication strategy and continuously re-examine it to ensure everyone is comfortable with and engaged by your communication set-up.

Given the prevalence of virtual teamwork and its importance in achieving business objectives, we were surprised to find through our study that so many teams are ineffective. But what was most startling is that many companies either don’t realize that their teams are underperforming, or despite their initial investments in these teams, they don’t take the time to focus on enhancing their effectiveness. The good news is that there are numerous strategies that organizations and team leaders can employ that will improve the performance of their virtual teams.

Organizations that get it right know that virtual teams and colocated teams cannot be built and managed in the same ways. The organizations that take the time to understand exactly what they are getting into will have substantially better odds for success than those that start their teams on a whim without proper planning or follow-up. By educating leaders and team members on the common pitfalls that are out there, we hope to help organizations create strong, prosperous virtual teams.

About the Authors:
Darleen DeRosa, Ph.D., is a managing partner at OnPoint Consulting. Darleen brings more than ten years of management consulting experience, with deep expertise in the areas of talent/succession management, executive assessment, virtual teams, and organizational assessment. Her client list includes Accenture, Bayer Pharmaceuticals, Daiichi-Sankyo, Gerdau Ameristeel, and Johnson & Johnson. Darleen received her B.A. in psychology from the College of the Holy Cross and her M.A. and Ph.D. in social/organizational psychology from Temple University. Darleen is a member of The Society for Industrial and Organizational Psychology (SIOP), METRO, and other professional organizations. In addition to Virtual Team Success, she has published book chapters and articles in journals such as Human Resource Management.

Richard Lepsinger is president of OnPoint Consulting and has a twenty-five-year track record of success as an organizational consultant and executive. His client list includes Bayer Pharmaceuticals, Citibank, Coca-Cola Company, ConocoPhillips, Goldman Sachs, Johnson & Johnson, NYSE Euronext, PeopleSoft, Prudential, and Subaru of America, among many others. In addition to writing Closing the Execution Gap, he has coauthored four books on leadership including Flexible Leadership: Creating Value by Balancing Multiple Challenges and Choices, The Art and Science of 360° Feedback, The Art and Science of Competency Models: Pinpointing Critical Success Factors in Organizations, and Virtual Team Success: A Practical Guide for Working and Leading from a Distance, all published by Jossey-Bass/Pfeiffer.

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About the Book:
Virtual Team Success: A Practical Guide for Working and Leading from a Distance(Jossey-Bass/A Wiley Imprint, 2010, ISBN: 978-0-470-53296-6, $50.00, is available from major online booksellers.

Jossey-Bass publishes books, periodicals, and other media to inform and inspire those interested in developing themselves, their organizations and their communities. Jossey-Bass’ publications feature the work of some of the world’s best-known authors in leadership, business, education, religion and spirituality, parenting, nonprofit, public health and health administration, conflict resolution and relationships. For more information, visit Jossey-Bass is an imprint of Wiley.

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