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How Close Are We to a Virtual Company Revolution?

Are We Close to a Virtual Company Revolution?

As we all know, the First Industrial Revolution used the power steam to mechanize production; the Second used electronic to create mass production and the Third used IT to automate production. And while those revolutions were characterized by advances in technology, the Fourth Industrial Revolution, as Klaus Schwab explains in the book of the same name, is quite different than the previous three. Today, we are facing a range of different technologies that combine the digital, physical and biological worlds, and have a potential to connect billions of people as well as change practically every business industry.

Virtual Companies and Remote Working
Ever since Yahoo announced the termination of their remote working program three years ago, people never stopped debating whether or not virtual employees and teams can perform as well as those in an office environment. However, there is a strong case to be made for remote work and virtual teams. According to an often-cited Cisco study, almost 70% of workers feel that they are more productive when working remote. Nevertheless, companies that are opting for this modern business model still face quite a few challenges. And while the model is relatively new, they can still learn from someone who had already been through it.

The Benefits of Virtual Companies

Lower Costs

Whereas traditional businesses are forced to maintain traditional offices, virtual companies effectively eliminate any real estate costs. Savings from this easily translate to lower prices for consumers (who, naturally, reward the company with their business), which gives virtual businesses a huge competitive advantage.

Employee Retention

In the past, smaller businesses definitely had a hard time attracting top talent, because most quality workers just weren't interested in joining small, unproven companies. However, virtual companies now have the advantage of a remote work environment, which helps employees save up to 10 hours every week in commuting time.

Newest Technology

Practically every virtual business needs to invest a huge chunk of their budget in technology – they have to develop strong processes and cutting-edge tools for data management. Even though this means that their technology expenses will probably be quite large, it will only serve as another competitive advantage down the line.

The Challenges of Virtual Companies

Company Culture

Unfortunately, due to lack of face-to-face meetings, virtual businesses can be susceptible to poor company culture. That is why, most team leaders have to devote a lot of their attention to developing a pleasant working atmosphere that allows their team to learn more about one another, and establish fruitful working relationships.

Communications

When you’re working in an office, you have no trouble speaking with your colleagues – in most cases, you only need to turn to the next desk and start a conversation. And the fact is, many employees today are still not accustomed to this type of communication. While there are many cloud-based tools out there today, like BlueJeans and OfficeSuite that allow employees to collaborate, most people are still learning how to rely on them.

Hiring Remote Workers

And while younger people (especially millennials) are attracted by the idea of remote working, some people are just not suited to work in that environment. Luckily, today you have modern online time attendance software to help you with performance management, but it still can hard to find experienced employees who are self-disciplined enough to stay productive from home.

Meeting In Person Still Matters

Despite many advantages of virtual teams, when it comes to building strong relationships within the company, meeting people face-to-face is still a vital part of the process. Regular meet-ups also remain important even after the first few months. Recent research from the Harvard University suggests that in about 85% of companies, employee morale has a tendency to sharply decline after the first 6 months, and continues to go down for years afterward. And that is why employees have to use the time they have in person to really get to know their co-workers and completely eliminate any feelings that cause a disconnect.

All in all, the new business model can be a rather beneficial form a cost effective and talent acquisition perspective, as long as young entrepreneurs manage to carefully avoid some of the aforementioned obstacles. For now, the virtual business model can provide a competitive advantage, which can easily become the very difference between success and failure.

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Nate M. Vickery is a business consultant from Sydney, Australia. He has a degree in marketing and almost a decade of experience in company management through latest technology trends. Nate is also the editor-in-chief at bizzmarkblog.com.