Virtual Companies

You read and hear a lot about virtual companies these days. What does it take to actually try and make one work?

At Setpoint, we are in a highly cyclical business.  We used to size our business based on the busy times and then try and tough it out during the slow times with out having to lay people off.  Every time you have to lay people off, it is very painful – not only for the people you have to let go, but it is difficult for those that remain. A couple of years ago we made a strategic decision to size our company for the lean times and use outsourcing techniques to handle the busy times, we decided to try and become a small base of key people that can wear many hats and outsource some functions that we believed could be more generic with proper management.

I had read many articles about the virtualization of the work force. One book that gives great insight is The Future of Work by Thomas W. Malone.

It is hard to make a virtual company work. Reading about it is one thing, putting it into action profitably has been much more difficult.

We used to help us filter and identify technical people that fit our needs.  We then used our best mentoring VP to sort through the resumes and set up discussions to find those that might match with our culture.

One thing we did instead of flying them out to meet with us was, we set up a 20 hour project they had to complete (we paid them for this) to see how they would do. We found out a lot by seeing how they solved that project. Like all people that work for a company – not all will be a fit for you or them, the sooner you find out the better for everyone involved.

We have needed many tools to help us make this concept work. One of the main tools we use many times a day is from – it is called Basecamp. This is our main communication and file tool, it is a diary of all that is taking place and assignments given. We use concurrent licenses for our engineering software programs to give us flexibility to share licenses. helps in our concepting phase. Every engineer has a unique color they use so we can recognize who has done what. is used to host virtual meetings and share information. You will need a conferencing program so that many can join the daily conversations. Setpoint is considering IP phones so we can send phones to our virtual employees and have them just a local extension away.

As you start out with new people give them clear short work assignments to make sure you and they are a good fit with your culture. The key roles of some of your employees will have to change. They have to over communicate and not be afraid to call up and see how their distant team member is doing. One of worst things is to assume everything is going fine if you don’t hear from a virtual team member.

More than anything it is important to have frequent (at least daily) contact with your virtual people. We have done things to connect with our offsite members so they feel like they are working for a real company that cares for them. In Basecamp we have a picture of our facility. As we send messages back and forth through Basecamp we have our own pictures on the message to reinforce that there is a real person behind all of this action.

Your face to the customer has to remain with your employees. We have found that customers have to connect with employees – not virtual team members. It has to appear seamless to them.

We feel that we are making progress but it is a continual battle.  Is it better than carrying too many employees through a downtime in the cyclical nature of this business? For us, the answer is a definite yes.

We are still growing at being a company that has virtual team members and believe we still have many lessons to learn as we go down this path. We’d love to hear from any of you out there that can help Setpoint get there faster.