Research suggest that while dispersed teams, working remotely, are often more efficient than co-located teams at successfully completing projects, they also tend to persist with failing projects longer than than co-located teams. Going forward in a hybrid work environment, managers need to help dispersed teams get better at failing fast. This will involve better screening and planning of projects, more frequent synchronous working, and more managerial monitoring and intervention.
Over the past year, we have all become used to working in dispersed teams. But now that it’s becoming possible to go back to the office and work side-by-side with colleagues, it’s natural to ask how much we actually will.
The benefits of dispersed teamwork are well-documented. There’s plenty of research to show that bringing together teams across organizational or geographic boundaries allows companies to leverage diversity in people’s backgrounds, attitudes, and capabilities. This diversity promotes improvement, creativity, and innovation. Yet the same research has also recognized that communication problems, cultural misunderstandings or disagreements about when and where to meet may lead to coordination costs.
In an effort to find out whether and under what circumstances the benefits would outweigh the costs, we examined 5,250 teams in an online community, many of which were dispersed across different organizations and geography. The members of this community work for a variety of organizations, including large organizations like Microsoft and Cisco, and the teams we studied voluntarily had come together to work on establishing standards for the internet.
The results of our study were surprising: We found that dispersed teams were more efficient than non-dispersed teams, but only when the outcome of the project was successful. Conversely, co-located teams were quicker to abandon failing projects but were less efficient in working on projects that did succeed.
Succeeding Faster
In general, dispersed teams spent less time and went through fewer iterations before reaching success than the co-located teams. This suggests that team members are aware that it’s difficult to coordinate when they are located in different organizations or when they have to coordinate across geographic boundaries. So if the teams themselves choose when it’s worthwhile to work across boundaries, they are likely to do so only on projects that they believe will be successful, and they will work harder to achieve success.
In contrast, co-located teams don’t need to make an extra coordination effort to complete their project. They have fewer incentives to work efficiently. They may also be more willing to take a risk in selecting a project, as they will perceive lower coordination costs going into it.
Failing Slower
On projects that failed in our sample, we found that co-located teams moved on to other projects more quickly than dispersed teams, which kept working on failed projects for more iterations before abandoning them. This might be because dispersed teams feel more committed to what they believe to be good ideas or think that their superior team will overcome any hurdles. We also observed that dispersed teams invested more effort in the projects early in the process than non-dispersed teams, which would make them prey to the sunk-cost fallacy and risk an escalation of commitment.
Additionally, it may also be that it’s when failure occurs that the coordination costs kick in: Research also suggests that dispersed team members may find it more difficult to communicate around a failure or reach agreement on when it is time to abandon the project. In contrast, co-located teams may find it easier to meet up to discuss the progress of the project and agree when it is time to let it go. It may also be easier for non-dispersed teams to get started on new projects, so they may therefore be less reluctant to abandon failing projects.
Research in entrepreneurship has shown the benefits of encouraging teams to take risk and embrace so-called “fast failures,” where teams fail often and quickly in order to learn. Our study suggests a qualifier to this recommendation: If teams are dispersed, they may not be very good at failing fast. And when dispersed teams hold on to failing projects, it is costly: The involved team members are unable to learn and move on quickly. In the meantime they consume resources that could have been freed up for investment in other projects. In other words, the real costs of dispersed teams lie with the failing projects that the teams are reluctant to abandon.
So how can companies limit the costs of failure in dispersed teams?
Increase the Efficiency of Failure
Dispersed teams may need help identifying up front which projects are more likely to succeed or fail. Putting in place better coordination mechanisms may also help dispersed teams to reach agreement on when it is time to abandon a project. Failing this, management may have to step in.
1. Screening
Dispersed teams may need support to ensure that they commit to projects that are really more likely to succeed. Actions to take could include scenario and risk planning, presenting ideas to colleagues or management before committing to projects, or putting in place situations that allow teams to seek critical input up front. Such conversations may also make team members more open to the fact that the project can fail and therefore leave them more ready to abandon failing projects.
2. Synchronous working
When dispersed teams coordinate across time zones, they often structure tasks so that they work on the projects at different times. This makes it simple — and when things go well also efficient — to get the work done, but generates little opportunity for communication when work is actually done. This means that discussions of problems that indicate that the project is failing likely get delayed. Dispersed teams may therefore need to put in place mechanisms whereby work is done on the projects with some overlap in time to allow for synchronous conversations.
3. Management intervention
Managers need to follow up more closely with dispersed teams than with co-located ones in order to ensure that progress is made and to look for indicators of when projects start to fail. Dispersed teams may also need more help in abandoning projects when they start to fail. With intervention at the right time, fast failures can also happen for dispersed teams so that resources are freed up quickly and can be redeployed on new projects. When it comes to co-located teams, management may need to pay attention to what projects are started, so as not to waste resources on projects with little potential, i.e., too many fast failures.
As managers contemplate the lessons from the giant experiment in dispersed working that the pandemic imposed, they need to examine critically just what worked and what didn’t. They should also remember that co-location and dispersion need not be mutually exclusive. Parts of a project may require co-location, other components may not. Whatever the overall design, though, project managers need to ensure that the weaknesses of both working modes are properly addressed.