Risk management with virtual teams

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Copyright John C Goodpasture, 2010 ©

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John C. Goodpasture, PMP Managing Principal

Square Peg Consulting LLC

www.sqpegconsulting.com

www.johngoodpasture.com

Risk Management with Virtual Teams

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Risk Management with Virtual Teams

Risk is the price we pay for opportunity

Virtual teams present unique risk management situations, some effects of which can be

accommodated within planned buffers on the baseline, and others will be potential

impacts that are ‘off baseline’ but identified on the risk register.

Risk management in context with virtual teams begins with a consideration for the unique

structure and organizational form of the virtual team. For risk managers, the nature of

virtual team boundaries and remote interpersonal relationships strongly impact the risks

associated with virtual teams.

Virtual Team Boundaries

Virtual teams have more boundaries than

co-located teams. Some of these are

internal to the team, but others are

external and unique to the nature and

architecture of virtual teams. Thus,

relationships are defined and constrained

by boundaries, each of which is to be

managed for the risk to both budget

efficiency and performance

effectiveness.

Virtual teams have more boundaries �. that are unique to the nature and architecture of virtual teams.

Networking

With virtual teams, every team member

is a potential node on a network and a

point of interface with other members of

the team. At each node for each team

member, there are governance rules.

Some of these rules are general purpose

and apply to every node, and others will

be very specific to the circumstances at

one node and not apply to others.

Governance on the network

The purpose of network rules is to

control or direct workflow among team

members, and to mitigate the risks of

time and distance between team

members. One mitigation is to use the

rules at boundaries to establish a degree

of command control that is naturally

present in co-located teams, but not so in

virtual teams.

Work cycles

Because virtual teams can operate

around the clock, the need to

synchronize configuration control of the

project’s intellectual property—

documents, standards, designs, reports,

data, and procedures. Synchronization

errors can become a significant risk to

the integrity of the material. Rules for

configuration control typically require

that check-in and check-out cycles

operate 24 hours per day so that no team

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member is locked out during their work

day, but this puts unusual stress on the

system because there is no time-out for

stabilization, maintenance, and for

processes to load and apply changes to

run in batch cycles. One approach is to

rotate required downtimes among all

work day cycles.

Remote Interpersonal Relationships

Establishing effective relationships

within virtual teams is perhaps one of

the most important risks to be managed.

It’s not uncommon that virtual teams are

“teams of strangers”. Not only are

teams composed of strangers, but to

compound matters very often

communication is strictly non-verbal but

at the same time remote. And, in many

entrepreneurial situations, the team may

be recruited virtually with members

never having met face to face with

company management or team

leadership.

It’s not uncommon that virtual teams are “teams of strangers”

It’s obvious that not only is the body

language missing, in many cases we

can’t imagine what it might be since

we’ve never interacted with our virtual

teammates in a common brick and

mortar space. To fill the vacuum, we

find ourselves imagining reaction effects

and imparting a persona of our own

making.

So it is that other means of building

relationships come to the foreground. In

doing so several distinct risks are

encountered that is the subject of the

following discussion.

Four attributes govern relationships, and

each has unique risks when applied to

the virtual team.

Inheritance:

Virtual teams--unlike there co-located

counterparts--do not routinely inherit the

culture and values of the project

leadership or the project’s host business

enterprise. Extra effort on the part of

project management is required to instill

values and culture among participants

that may only be transient members of

the team or the business.

Misunderstandings that arise from

cultural differences can be profound and

lead to risks of unintended

consequences. For example--and from

my own experience--a failure of a

project activity as viewed from the

perspective of one cultural outlook may

be evaluated as poor planning and

execution by the activity manager. But at

the same time--viewed from the

perspective of another culture--that same

activity and result may be seen as

appropriate risk taking, even though the

risk did not work out favorably.

Depending on what culture is inherited,

the activity manager will either be

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penalized or rewarded. Certainly no

project manager wants a confusion of

values; ensuring the inheritance of a

commonly understood risk attitude is a

very important project management task

to obtain a smoothly working project in

a virtual team setting.

Cohesion:

Co-located teams draw effectiveness

from the cohesion among members that

share a common environment, team

goal, project culture, and willingness to

support each other. Such cohesion

depends greatly on trust. Trusting

relationships do form in virtual teams,

but they generally form more slowly,

thereby risking the near term schedule

and perhaps the associated budget.

Lack of trust is among the most cited

reasons for team failures. Virtual teams

have no easy way to establish trust but

commonly employed mitigations usually

involve occasionally getting team

members together physically in some

way.

Some projects have produced metrics

that show better team performance if

team members have been personally

introduced. A prominent example is the

early space programs that employed far

flung teams in remote tracking stations

that had to work together on a common

mission and pass information accurately

and with timeliness

Trusting relationships do form in virtual teams, but they generally form more slowly

Coherence:

Coherence is an attribute of the familiar

idea that teams can achieve more

together than their members can when

working independently. In the absence

of coherence there is often confusion,

ambiguity, wasted effort, and sometimes

an outcome that lacks essential customer

value.

Coherent behavior is time sensitive. We

are all familiar with the difference

between the noise of a crowd talking

among themselves and those same

individuals singing in a choir. Singing is

an example of coherence; the noise of

the crowd is those same voices without

phase (timing) coherence.

Communications and collaboration

among team members is sensitive to

coherence. The time lags within virtual

team communications and collaboration

degrades coherence, raising risks

because things are out of phase with

each other.

The common mitigation for improving

coherence is to introduce an opportunity

for simultaneous communications that

are time sensitive. Sessions for time

sensitive communications are scheduled

so that they overlap the working day for

as many members as possible. To make

these sessions practical and productive,

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the working day may have to be time-

shifted for some participants.

Coupling:

Coupling is a measure of sensitivity,

correlation, and interference of one

activity upon another. Within teams,

activities are more highly coupled than

the coupling between teams. But virtual

teams are not as highly coupled

internally as co-located teams, and this

reduced coupling is a risk to

performance.

Informal person-to-person

communications is a form of coupling.

The informal communications by casual

association that is a centerpiece of co-

located teams is all but missing in virtual

teams. These so called ‘water cooler’

conversations are a very important

communications channel for coupling

one activity with another, but this

coupling mechanism is all but missing

with virtual teams, raising the

communications risk.

Summary

Virtual teams present unique risk management issues, some of which can be

accommodated in the baseline, and others are risks listed in the risk register.

Two risk categories are virtual team boundaries and remote interpersonal relationships.

Boundary conditions may lead to inefficiencies and ineffective performance both within

teams and between teams. Relationships risks include lack of value inheritance, poor

team cohesion, absences of coherence in communications, and weak coupling between

team members. . In all cases, when these risks are recognized and understood, project

managers can take steps to mitigate these risks.

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To read more from John Goodpasture, visit johngoodpasture.com and sqpegconsulting.com

Risk management with virtual teams

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