Virtual teams: characteristics, challenges, and effectiveness

¶ … Virtual Teams

A Study of the U.S. Army Logistics Network

The concept of virtual teams has grown exponentially with the pervasive adoption of the Internet and the corresponding growth of technologies that enable greater levels of collaboration, coordination of complex tasks, and greater shared ownership of tasks as well. Organizations, whose strategic objectives rely on specific skills sets in specific locations, as is the case with supply chain and logistics functions, have found virtual teams to be highly effective (Barki, Pinsonneault, 2005). The potential for creating virtual teams to more efficiently streamline complex processes in supply chains showed early promise (Bal, Gundry, 1999) and has since led to the development of knowledge-based virtual teams that are strategic and process-driven in nature (Lee-Kelley, Sankey, 2008). As virtual teams and the systems, technologies and processes used to support them have grown more collaborative in nature, knowledge development and retention, not merely production, has become the new measure of their effectiveness (Stevens, Karkkainen, Lampela, 2009). With these core concepts in mind, the intent of this analysis is to analyze how the U.S. Army Logistics Network use virtual teams to ensure supply chain processes are made more efficient and continually improved upon. In conjunction with this goal, the effectiveness, social dynamics and decision making of virtual teams will be assessed, in addition to the obstacles and success factors as well. The communication within virtual teams and the logistics of telecommuting are also discussed. Virtual teams' ability to generate knowledge is an evolving strength.

Effectiveness, Social Dynamics, and Decision Making of Virtual Teams

Assessing Effectiveness

Key to the effectiveness of virtual teams is first the composition of the team itself, and second, the leadership styles and approaches used to impart ownership of key tasks. The formation of a virtual team, to ensure the highest levels of effectiveness possible, requires team members who perceive their value as individual contributors first yet also see their contributory effects as critical to the success of the overall team (Bal, Teo, 2001). For any virtual team to be effective, the team members must see the success of the entire team as a critical part of their own credibility within the broader organization as well. Team creation must be focused on selecting candidates who have a sense of accountability and responsibility to the performance of the team as a unit, and see their contributions as not standing alone, but integral to the entire team's success (Bal, Teo, 2001). As a result, often those included in virtual teams are often senior members of organizations who may have managed in-house teams on their own before, and can see the implications of team performance organization-wide. Effectiveness of a virtual team is highly dependent on the level of shared ownership that each team member has for its vision, mission, objectives, processes and daily tasks.

As a result of these many shared aspects of ownership and the need to continually keep remotely located team members motivated, leadership is critical to the success of any virtual team (Kerber, Buono, 2004). Clearly transactional leadership where the focus is purely on activity-based metrics and the use of balanced scorecards to evaluate individual contributions can only go so far in terms of leading a virtual team. This is especially the case in the U.S. Army Logistics Network, where it is more important to commanders of purchasing and procurement teams to concentrate on enabling collaboration vs. spending time on transactional leadership. In this context, transactional leadership is comparable to micro-managing, and often does not nurture and sustain cross-department or cross-division collaboration which is so critical for the success of the Logistics Network in general and the performance of the purchasing and procurement divisions and departments specifically. As the U.S. Army Logistics Network is comprised entirely of enlisted and career military personnel, retention is not as much of an issue for leaders as is it in the commercial sector, yet morale is critical for learning to occur. Mastery of a specific knowledge area is critical for job satisfaction, especially for remote employees (Weiss, 2002). For the U.S. Army Logistics Network and its purchasing and procurement virtual work teams, this translates into the requirement on the part of leaders to be more focused on transformational vs. transactional leadership. Just as virtual teams require team members to be more focused on the entire groups' performance over just their own, a virtual team also requires leaders to shift from a being transactional to transformational. In fact this aspect of virtual teams is considered to be the most critical in terms of team's ability to get to their goals and accomplish their missions. Transformational leadership is critically important in virtual teams so that trust between team members, often separated by significantly long distances and multiple time zones, can be achieved. A transformational leader of a virtual team can also do much to avert potential conflicts and even crises that may impact their team over time as well. Studies have shown that virtual team leaders who have high levels of transformational leadership in fact are just as effective as leaders who regularly see their subordinates face-to-face (Purvanova, Bono, 2009). Transformational leadership, it can be inferred, is critically important to the success of any virtual team. The extent to which the U.S., Army Logistics Network continually invests in officers' training to continually strengthen their ability to be transformational leaders is a critical success factor that will be discussed later in this analysis. Assessing Social Dynamics

The social dynamics of virtual teams, over time, are more determined by the leadership style and its level of consistency in terms of being transformational (Purvanova, Bono, 2009) than any nearly any other series of factors. That's because a leader of a virtual team must instill a very high level of trust individually with each virtual team member and also amongst all members of the team as a group. This instilling of trust is what can lead to significant advances and performance gains over time as a virtual team works to accomplish objectives together (Jong, Schalk, Curseu, 2008). Transactional or micromanaging leadership styles on the other hand tend to isolate team members and often lead to factions being created throughout a virtual work team. In the case of the U.S., Army Logistics Network and sits purchasing and procurement virtual teams located across five continents, the use of balanced scorecards that measure and incent greater levels of collaboration across teams are often used to ensure productive social dynamics both within and between teams are attained.

Social dynamics within the U.S., Army Logistics Network's purchasing and procurement teams can also become highly competitive over time. As one of the most critical processes these teams work on is pricing, the tendency to compete on how far one team member can drive a supplier down in terms of price and then post their accomplishment to the teams' Intranet pages, a securely protected website is commonplace. The front page of the Intranet site at times can be seen as a leader-board of who is getting the greatest price concessions over time from suppliers. In the context of this pricing competition leaders of these virtual teams need to be careful to nurture healthy interdepartmental and even independent competition without sacrificing team accomplishment. This is one of the paradoxes of managing global virtual teams to attain the highest levels of performance possible, which is the managing of collaboration vs. competition (Lee-Kelley, Sankey, 2008). The team dynamics needed to accomplish this balance is critically important, and calls on leaders to continually stay focused on building trust and transparency (Purvanova, Bono, 2009). The essence of transformation leaderships' contribution to virtual teams' effectiveness is the creating of a trust-based approach to communication. As difficult as this is to do from distances, the purchasing and procurement teams in the U.S. Army Logistics Network regularly hold offsite meetings where the team members get to interact in person with each other. These events are held at the departmental level every six months and at the divisional level every year. Commanders of these specific divisions also ensure there are a series of workshops of purchasing, procurement, price negotiation strategies and strategic sourcing also held to ensure additional training goals are met. The goal of creating more trust by giving virtual team members an opportunity to meet each other face-to-face while also providing for one-one-one conversations with the team leaders and in larger divisions, commanders, also helps to create more shared ownership of team goals as well. Creating more opportunities for teams to get to know each other in person helps social dynamics over the long-term, creating greater opportunities for knowledge sharing over time (Karayaz, 2008). The U.S. Army Logistics Network has found that performance scores significantly increase for teams when they are trained on new processes and systems in the same location as well (Shipley, Johnson, Hashemi, 2009). This is attributable to virtual team members assisting each other and further reinforcing the lessons learned from training sessions held at their offsite meetings.

Decision making within the procurement and purchasing teams varies significantly by the leadership style of the given leader or commander, the extent of decisions being made that impact individual supplier relationships, and the relative costs of the decisions over time. The U.S., Army Logistics Network has defined specific pricing and costing levels by rank, and strives to push accountability and responsibility as far down the chain of command as possible. As nearly every officer who acts as a buyer within the purchasing and procurement teams has been trained on the fundamentals of accrual-based costing, cost-based accounting, supplier management and supply chain planning, each is given a set of metrics to measure their performance individually and as a team against. As a result, decision making is pushed to the lowest levels of virtual teams with accountability being assigned to the officer responsible for a given supplier. Decision making that involves the entire group is much more collaborative in nature, relying on Internet-based technologies for sharing documents, presentations, and other materials to assist in the development of alternatives. The U.S. Army Logistics Network is heavily reliant on collaborative forms of technology based on the Internet in their decision making approach across divisions. This aspect of their operation is discussed later in this analysis, yet the technology is mentioned here to highlight its supporting role to the process of strategic decision making. What is critically important is that the actual decision making process be strategically managed when a new supplier is being considered, or in the event of a major event, for example the invasion of Iraq, where there had to be exceptionally high levels of coordination across all divisions of the logistics network.

Analyzing the Obstacles and Success Factors of Virtual Teams

Obstacles

The U.S. Army's Logistics Network believes that knowledge transfer is by far the greatest obstacle they face in making virtual teams as effective as they can be. The fact that the number of products and services they source over time varies significantly while at the same time there is the need to procure supplies for new programs including the rebuilding of Iraq illustrates why knowledge transfer is such an obstacle for them today. One of specific example of this is in the sourcing of ceramic armor that is being used to protect American soldiers and also outfit Iraqi forces (Ceradyne, 2006). Ceramics require an entirely different series of processes of procurement, quality management and eventual integration into the U.S. Army supply chain. This specific example illustrates how knowledge transfer not only about the procuring of ceramics across a virtual team is critically important, but also the quality management, quality audit, Department of Defense (DoD) requirements interpretation of specifications and first article ordering are. In short, there are entirely new subsystems of processes built for each new technology of armament produced for the U.S. Army. Combining these factors is the need for coordinating demand forecasts for the U.S. Army personnel in Iraq, the security forces hired by the U.S., and the forecasts from the Iraqi Army and Police. As the decision was made to standardize on ceramic armor based on it saving 19 lives during the height of the Iraqi war and given its proven resiliency in protecting troops from roadside bombs, the U.S. Army chose to standardize on this technology. Considering the literally thousands decisions that include purchasing new armor, it is clear why knowledge transfer is such a big obstacle for the U.S. Army to overcome. That is why the culture of the procurement and purchasing teams are entirely focused on training and the valuing of knowledge above even metrics of activity and performance over time. The greatest obstacle is gaining enough knowledge in time to make the best possible decisions in the shortest amount of time. It is literally a race of virtual teams against the clock to gain as much insight as they can and move forward with their decisions.

Correlated to this obstacle is the one of communicating the knowledge gained quickly throughout the virtual team (Jong, Schalk, Curseu, 2008). Both public and private sector-based virtual teams are continually facing the obstacle of knowledge transfer. This problem area however has led to significant opportunity for technology innovation with will be discussed in the next section of this paper titled Communication Practices in Virtual Teams.

The lack of communication within teams is the second major obstacle, and is often illustrated by mis-communicated requirements to suppliers, lack of clarity about pricing, and pricing errors. In the case of strategic sourcing programs where there are several officers involved in a major project, the lack of knowledge capture can also lead to a breakdown in communication over time. The over-reliance on technology has been seen as a catalyst for a lack of communication in many virtual teams as the reliance on knowledge management systems first and processes second takes precedence (Stevens, Karkkainen, Lampela, 2009). This also happens in the purchasing and procurement within the U.S. Army Logistics Network once databases have been created, knowledge management systems programmed and developed, and taxonomies defined of how the data will be stored. All that is left to do is change the behaviors of the officers who must input data about their suppliers they manage, including pricing and product data. This sounds quite simple, yet is by far the most difficult aspect of making a change in communication happen. Many officers resist putting the data they have in their heads into a knowledge management system their peers, superiors and even members of the Department of Defense can query and use whenever they want. This is a classical case of resistance to change that often occurs when new systems are put into place to make process more efficient and move virtual teams from being isolated to being part of a community (Slater, 2006).

The lack of communication that leads to resistance to change is often based on a lack of trust about not only how the knowledge being shared is going to be used, but also about ones' role once they share their most valuable information. This dynamic of a lack of communication being predicated on a lack of trust has been seen in empirical studies of resistance to change (Garg, Singh, 2006) and is the third major obstacle the U.S. Army Logistics Network faces. The lack of trust as to what their roles are, how the sharing of intelligence and insights gained, and how the data they share in technology-based applications on the U.S. Army Intranet site all weigh into their decisions as officers to contribute to the greater growth of knowledge. Understanding that the insights and intelligence they have of suppliers and their performance in managing them has a direct impact on their promotion potential illustrates why they are hesitant to share any information whatsoever. This third obstacle of a lack of trust is exemplified by a resistance to change is the most debilitating in terms of slowing down the progress of any organization to its goals (Garg, Singh, 2006). For the U.S. Army Logistics network this is exacerbated by the fact they must move very quickly in order to attain their objectives. Take for example the sourcing of Ceradyne armor. The sharing of insights gain from supplier qualification has direct benefits for not only the Logistics Command but also for the Iraqi armed forces and police forces. Sharing this information is vitally important for the entire supply chain to function. Overcoming resistance to change by concentrating on creating trust is crucial for the most important processes of the purchasing and procurement teams, located across the globe, to function correctly and the U.S. Army Logistics Network to serve its part of the broader support system for the Department of Defense and foreign governments.

In contrast to these obstacles, the success factors of U.S. Army Logistics Network purchasing and procurement teams capitalize first on their experiences as Army officers and the heavy reliance on procedures and processes to get their work completed. As the Department of Defense requires processes to be documented, tested and verified regularly for every aspect of purchasing and procurement, the documentation of workflows is fairly complete. There is in fact a series of workflows and processes defined that purchasing and procurement officers can rely on to guide them through supplier relationship management issues. There are also tiered pricing strategies for commoditized products and services, which serve to drive up the transaction velocities over time, all of which are defined and negotiated through the Department of Defense on products and services sourced in conjunction with their needs. The net effect of all these defined processes and procedures and pricing tables is framework into which the purchasing and procurement teams can readily work. This success factor is responsible for the rapid on-boarding of new officers into the purchasing and procurement virtual teams as well. There are new officer orientations run every ninety days where new members of the virtual team are provided a thorough training on all of these processes, procedures and frameworks. The combined effects of the compliance of U.S. Army regulations for purchasing and the need for strict adherence to Department of Defense requirements makes the knowledge transfer of these initial processes, procedures and frameworks organized and thorough.

A second key success factor of these virtual teams is the clear assignment of responsibility by sourcing group and suppliers including the defining of strategic sourcing cross-functional teams. As the chain of command throughout the U.S. Army Logistics Command is well defined due to the reporting structure, there is significantly less definition of the creation of cross-functional teams for purposes of strategic sourcing. This ability however to create a strategic sourcing framework is based on having senior-level team members who can balance their existing responsibilities in conjunction with the needs of the strategic sourcing team (Desouza, 2008). This translates into significant stress even on experienced officers, yet the benefits of strategic sourcing in cost performance and quality management objectives being achieved are worth the extra effort. This has become abundantly clear in the work completed on the sourcing of Ceradyne ceramic armor by the U.S. Army Logistics Network relying on the expertise of virtual purchasing and procurement teams, many members of which are located throughout the U.S., Europe, and Asia. The implications of strategic sourcing on all government procurement have accentuated the need for greater levels of coordination and collaboration throughout the U.S. government. This puts an added emphasis on the need of these strategic sourcing teams, virtually located, to work in conjunction with their counterparts in the U.S. Office of Management and Budget (OMB) who has primary responsibility for strategic sourcing (Bearden, Morton, 2006). The ability of the U.S. Army Logistics Network to create this level of collaboration and coordination on strategic sourcing projects involving virtual team members located globally indicates how well cross-functional team development and execution have become a strength.

A third strength of virtual teams is the ability to quickly create ad hoc teams to address complex and highly unique requirements over time. In the case of the virtual teams that are involved with procurement and purchasing functions for the U.S. Army, the most complex processes of inventory allocation, distributed order management, logistics management and planning and the development of Collaborative Planning, Forecasting and Replenishment (CPFR) workflows need to be tailored for each supplier (Barahona, Chowdhary, Ettl, Huang, et al., 2007). Take into account the complexities of these areas of supply chain management for a major initiative like the invasion of Iraq, and this strength of deep supply chain and logistics expertise becomes clear. In summary, the success factors of the virtual teams completing procurement and purchasing center on the standardization of processes and procedures, the rapid deployment of cross-functional teams that can still stay aligned with the requirements of the chain of command structure, and the deep expertise these virtual working team members have in supply chain management techniques and approaches.

Communication Practices in Virtual Teams

The level of communication throughout any virtual team is highly dependent on the level of trust the leader or manager creates over time (Purvanova, Bono, 2009). To the extent there is trust not only between the subordinates and managers or leaders and also between the subordinates themselves, is the extent to which there will be trust within and between other virtual teams as well. The focus of much of the leadership of virtual teams is based on trust as a motivator and enabler of more effective communication. Transparency breeds more effective communication while the lack if just deters it more. The fact that effective communication is highly dependent on subordinates and members of the virtual teams feeling less threatened and more open to communicating is a direct result of this dynamic. Effective communication within the purchasing and procurement virtual teams of the U.S. Army Logistics Network is predicated on their commanding officers providing support and assistance when needed, while at the same time concentrating on providing accountability for shared results. The U.S. Army has found the more complex the project the more critical it is for teams to be measured not on individualized performance but on collaborative performance. Taking this step to measuring shared performance significantly improves the level of communication as a result.

In terms of enhancing communication, the U.S. Army has found that continually reinforcing the identity of the virtual team, its mission, role and objectives are all critically important to ensuring the motivation to communicate stays high. This was learned over time as virtual team members' levels of collaboration and communication began to drop of significantly after sixty days or more of not being significantly involved in new projects. This finding of the U.S. Army of the need for continual strengthening of the role, mission and objectives of the virtual team being one of the best potential strategies for enabling the enhancing of communication is supported by empirical research as well (Sivunen, 2006). Virtual team leaders and commanders realize that there is a continual stream of interruptions for virtual team members located globally, and that the continual reinforcement of how critical their role is in the virtual team to ensure effective communication over time. There is also the need for continually reinforcing the integral role of their analysis and continual work with suppliers and the contributions group-wide to pricing concessions and pricing goals being met. The practices that lead to the enhancing of communication in virtual teams are also tied to the level of authenticity, transparency and trust that virtual team members perceive their manager or leader to have (Barki, Pinsonneault, 2005).

The U.S. Army Logistics Network has taken a multi-faceted approach to overcoming communication barriers, beginning with a highly structured schedule of in-person meetings so virtual team members can regularly meet and discuss complex issues face-to-face, and more importantly, understand the people they work with more at a personal level. There are significant cultural and work dimension differences between each member of the virtual teams the U.S. Army relies on for global purchasing and procurement. To minimize these cultural dimensions, the U.S. Army requires its officers and commanders to complete cultural dimensions and cultural assimilation training before takin command of groups of virtual teams. Included in this training are examples of how to use the Hofstede Cultural Dimensions Model (Hofstede, 1983) to evaluating differences between the five cultural dimensions which are included in the model's framework. The cultural dimensions model is used for strategic planning of larger initiatives that require the coordination and collaboration across cultures that are significantly different from each other. The U.S. Army reports this has been very useful training for including new virtual team members whose native nations are in the Middle East and throughout Eastern Europe, two regions with cultural dimensions unlike any other area of the world. Using cultural dimensions analysis and the framework and follow-on research by Hofstede, the U.S. Army has been able to significantly reduce the cultural factors that contribute to communications barriers becoming solidified. The strategy of creating procurement and purchasing teams throughout the United Arab Emirates, Saudi Arabia, Turkey, Jordan and Israel and them linking them with U.S.-based, European, and Asian team members is to provide faster response times on supply chain requests and supplier coordination throughout the Middle Eastern region. Overcoming the cultural barriers between team members using Hofstede's Cultural Dimensions models have significantly increased the speed at which the U.S. Army's virtually-based procurement and purchasing teams have been able to combine efforts to attain larger and more logistically difficult goals. An example of this is the standardization of quality management guidelines and minimum quality levels for ceramic armament for all nations in the region (Ceradyne, 2006).

The technologies the U.S. Army relies on for enabling greater levels of collaboration globally are based on the underlying concepts of enterprise content management systems (Blair, 2004). What's most critical from a technology standpoint for supporting the U.S. Army Logistics Networks' virtual teams is an enterprise content management system that has the ability to create multiple taxonomies, or approaches to organizing data while also providing process workflow flexibility so the virtual teams can define and update how they plan to use the data over time. The U.S. Army has also expanded their enterprise content management systems to include comprehensive knowledge management including semantic-based search (Karayaz, 2008). In addition, the use of latent semantic indexing, a technique of developing linguistic models of interrelationships over time is also being used increasingly in larger sourcing and procurement projects. The most visible area of the enterprise content management and knowledge management systems however is the portal or groupware applications. As security is a critical concern for the U.S. Army, groupware (Nedelko, 2008) or portals are often not accessible via public Internet access; the virtual team members must first access a secured site and then often used a secured Virtual Private Network (VPN) to gain access to the portal. With the growth of Web 2.0 technologies and social networking, the U.S. Army is actively experimenting with Wikis or online lookup systems, the use of Facebook-like approaches to virtual team communication and the adoption of secured XML links to ensure virtual team members can collaborate and communicate interactively with each other (Bernoff, Li, 2008). All of these technologies were originally developed for the private sector and as a result often lack the level of security necessary for use by U.S. Army virtual team members. As several of the virtual team members are assigned as cross-functional team members on Army bases, there is sufficient security at the infrastructure level of these military installations to ensure the data is not compromised. In the case of virtual teams in private industry however, the need for greater security is critically important, especially for teams that work in pricing, procurement and supply chain management for private enterprises.