I am currently based out of our San Francisco location. Using my phone, I promptly connected with colleagues in Singapore via Facetime and obtained an update about a new hire in one of our portfolio companies. Communication technology like this is the next best thing to teleportation in today’s era, enabling us to accomplish tasks that would have seemed impossible just a few years back.
The emergence of the digital age is bringing forth a dispersed workforce on a global scale, supported by the continual advancements in technology that help connect people from all corners of the planet. Both new and established enterprises must be equipped to collaborate with and reap the rewards of this fresh labour approach, to stay ahead in a perpetually changing worldwide marketplace.
Reasons for Its Distribution
It is common knowledge that numerous enterprises face difficulties when it comes to recruiting the most skilful personnel in their vicinity, which can be a costly affair. Simultaneously, enterprising and competent individuals spread across the globe are on the lookout for promising prospects that may not exist in their own homelands. My acquaintance Niko Bonatsos frequently mentions that talent is ubiquitous, but opportunities are not. As a result, companies have expanded their horizons to land the ideal match for their responsibilities.
During the 1980s, businesses in the Western world began outsourcing some of their operations to expert service providers overseas, capitalizing on the lower wages in countries such as India and Bangladesh, which in turn boosted their revenue. This choice played a significant role in the development of the outsourcing industry in these nations. Cognizant, for instance, an Indian IT outsourcing corporation, reported a whopping $12 billion in revenue during the previous year.
Traditionally, language, cultural, and educational barriers have created a vast divide between those who partake in economic transactions. Remote freelancers are often not considered to be colleagues, but rather members of a contracted team tasked with specific duties such as building a contact center or developing a website for an American company. Until recently, “outstaffing,” where businesses provide full-time staff to their clients, was only limited to strategic tasks, such as guaranteeing software quality. However, this has been changing as the economic terrain evolves.
Rationale behind Remote Workforce
While outsourcing and entry-level outstaffing remains a feasible choice for businesses, the distributed organizational model is gaining ground as a fresh approach. Corporations such as Stack Exchange and Upworthy allow their employees to work remotely if they prefer. One prime example of a fruitful enterprise implementing this model is Automatic, the creators of WordPress, which is presently valued at over one billion dollars and employs remote crew members from 43 different countries. It is likely that this decentralized organizational model will continue to expand in the forthcoming years.
Businesses have a legal obligation to optimize profits for their shareholders, and this tendency is influenced by that responsibility.
Studies carried out by Jerry Porras of Stanford University have suggested that teams with a sense of unity and shared values are more likely to prosper in the long term for businesses. Although assembling a remote team may prove to be more cost-effective than recruiting on-site personnel, the optimal way to enhance performance in this area is to assimilate remote staff into the culture, ethics, and framework of the organization.
Modern progress in collaborative technology has spawned an entirely new way of conducting business. In a similar manner to how telephones transformed the workplace during the 20th century, modern Software-as-a-Service (SaaS) solutions, such as Jira and Asana; team messaging applications, such as Slack; and a host of video conferencing platforms, have revolutionized modern offices. Nowadays, “working” with someone located on the opposite side of the globe may include a video conference with screen sharing capabilities, and a Slack channel for information exchange. This is just the outset; it will be fascinating to witness the future implications of virtual and augmented reality on remote work.
This bears no resemblance to the use of landline phones and fax machines 30 years ago.
Cultural Integration: The Binding Force of a Decentralized Future
Despite the multitude of progressions in collaboration technology, finding a genuine substitute for face-to-face communication remains challenging when it comes to establishing a company’s culture and fostering trust. The need to focus on education and training is of paramount importance, and technology serves as a crucial asset to bridge this gap.
Recent progressions in the startup ecosystem are noteworthy, and the story of Works serves as an excellent example. Works is a startup that Spark endorses and specializes in linking organizations with remote software engineers, specifically in Asia. Their prime focus is to locate and train engineers who possess not just strong coding talents, but the ability and interpersonal skills to collaborate with colleagues from distant locations. Works developers are highly sociable, engaging with their clients on social media, and frequently joining video conferences to contribute to technical and product planning discussions.
It is somewhat ironic that while technology advances and facilitates remote communication, entrepreneurs are progressively being tested in mastering the human aspect.
The expansion of geographically decentralized teams is merely the inception of a broader phenomenon. There is vast potential in extending this remote team model to the global labour market. By harnessing the underutilized talent available around the world, businesses and ideas can achieve their full potential, irrespective of their origins. (source) (source)
Remember that Spark Capital has supported Stack Overflow, Upworthy, Slack, and Works.
This article was re-published from Spark Capital’s blog, initially published at johnmk.tumblr.com.