Virtual Operations

My blog entries are typically about the items at the time uppermost in my mind.  The fact that I have not written an entry for some weeks does make me pause for thought!

MyWorkSearch operates as a virtual organisation and in one of those weird coincidences as I was driving my car this morning I was thinking about the challenges that this presents and I decided to write a blog about it.  I arrived at my (home) office to be greeted by the news that those challenges had just ratcheted up by several notches as an important supplier has badly let us down.

When a small team of us started MyWorkSearch in February 2009 we wanted to keep overheads down and also have maximum flexibility.  There seemed little point in taking on the high fixed costs of an office at a time when we had no income and no certainty that our business would be successful.  Equally we knew that if the business prospered we might need to grow quickly and once again the fixed infrastructure of a conventional office could be an impediment.  So we decided to embrace technology managed for us by third parties.  Using a combination of cloud computing and outsourcing, all of our key services, such as customer database, email, telephony and file storage, could be provided by specialists and made available to our team irrespective of location.  Our costs would mostly be proportional to our usage and thus added expense would only be necessary as the company grew.

MyWorkSearch has done rather well.  Within six month of issuing our first invoice we had achieved over £1m in sales and monthly turnover, if maintained, would result in multi-million annual sales.  We have ten full time software developers and another ten people in assorted other roles.  All the while we have avoided taking office premises and operated as what is often described as a virtual organisation.

There have been a number of positive aspects from this approach.  I think the biggest one is that we have been able to hire excellent people irrespective of their location as our talent pool has not been limited by commuting distance.  Some benefits have been the flip side of a challenge.  In a central office one can often spot issues simply through management by walking around.  That does not happen in virtual organisations so it has forced us to think through our operations and document them.  We have been far more disciplined than many other small businesses would be and we believe we are well placed to embark upon ISO accreditation.  Another area often taken for granted is team communications.  In many businesses there are those ‘water cooler’ conversations where colleagues bump into each other and find themselves discussing an issue.  These unplanned meetings can be very effective.  We don’t have them in our company and we need to make the effort to speak and meet regularly.  A combination of regular conference calls, team meetings and away-days are our necessary alternative.

There are two disadvantages to our setup that we have not yet solved and both are about people.  One is that some people do not have domestic circumstances or a temperamental disposition that permits them to work from home.  The latter may be a preference or simply a recognition that without the disciplines of an office environment it is easy to get distracted and find that hours have passed with little actually done.  The other disadvantage is our inability to take on trainees.  We are of a size that we could take on an inexperienced person or two and through on the job training develop their talents.  So far we have not found a way of doing this when people work at a distance from each other.

The news I received this morning was that a supplier we outsource a proportion of our call handling and support to has let us down badly and we need to replace them unexpectedly and quickly.  This would not happen had the team been employed directly by us, albeit in a previous business we did experience the equivalent when some builders cut through the cabling to our office resulting in two days without internet or phones.  The good news is that we have documented processes that will significantly reduce the learning curve for a new supplier and our technology is set up so we can redirect calls and data to this new organisation.  However the lesson for us is to dig deeper into the business operations of our suppliers as I think that more diligence on our part would have avoided the problem.

Nowadays many businesses with a handful of staff operate virtually.  What we are doing is relatively unusual as most organisations centralise around a location once they have grown beyond this.  However I think that technology developments will make virtual operations far more commonplace for startups and I would welcome hearing from others who have experienced this and seen how other organisations manage the challenges and take advantage of the opportunities.