Over the past thirty years, the growth of the Internet and online systems has led to new ways of organizing and structuring businesses.
These days, it can make little difference where an organization's staff are physically located. The difficulties and time lost during commuting, the global pandemic, and other factors, have shown organizations that they can carry on pretty much as before, without having to house all their personnel under one roof in traditional workspaces.
Some companies (as we shall discuss) have always 'operated virtually', and drawn great benefits from doing so, scaling fast into global organizations.
Post pandemic, it could be that we never go back to a situation where city-dwelling office workers all commute at the same time of the day, back and forth to work, every working day.
In a virtual organization, employees are physically located anywhere in the world, and connected through online apps and systems such as Slack, Asana and Zoom.
Being located around the world, in different time zones, means global companies can provide services 24 hours a day to whoever they want.
The virtual organization still 'exists', has structures, departments and systems, much like any other organization.
In some senses, they may not physically exist “but are made by software to appear to do so"(1). They have been described as "unreal but made to look real". (2)
A virtual organization can also be a flexible network of separate, collaborative entities and people that come together to deliver a product or service.
This arrangement could be temporary, or refer to one part of the overall organization, or be a permanent structure.
There are various types and approaches:
Automattic, the company behind Wordpress, which powers 20% of all websites on the planet, runs a virtual organization of 1,850 people speaking 119 different languages, in 96 countries.
According to their ‘About Us’ page (3), Automattic deploys 400+ web changes in a typical week, sends 662,000 Slack messages and interacts with 26,000 clients.
Founded in 2005, the company’s mantra is “help make the web a better place" and its staff can "work wherever [they] like and take as much leave as [they] want.”
Founder Matt Mullenweg prefers the word ‘distributed’ to ‘remote’ when describing his organization. He even has a podcast called ‘Distributed’ where he discusses the future of work. (4)
His idea is that the workforce should not feel remote, they are merely distributed around the world.
1,850+ Automattic Staff, around the world
Source: https://automattic.com/map
Looking through some of their employees' details, you can see 'Code Wranglers' located in Thailand, 'Rocket Engineers' in Portugal, and even a 'Protector of the Asynchronicity' in Salt Lake City.
A converted warehouse acts as their head office, located in San Francisco, California, but otherwise, Mullenweg has grown the business without needing physical office space.
(Above and Below:) Automattic's simple head office, 29th Street #343, San Francisco, CA 94110
In September 2019 Automattic raised US$300 million from Salesforce Ventures, valuing the company at US$3 billion.
Nike, Dell Computers, GitLab and Zapier are other proponents of the virtual organizational structure.
Zapier's view is "if you are on Slack, you're at work." Over the past ten years, the organization has grown from three co-founders to more than 550 people, in 38 countries.
The central concept is to automate the use of web applications, with the idea springing from a Startup Weekend in Columbia, Missouri, in 2011.
From the outset, the three co-founders all worked in different cities developing Zapier as a side hustle along with their own day jobs. They were virtual from the start, and have retained this structure since.
In 2012, they were accepted onto the Y-combinator accelerator. This three-month period was the only time they worked in the same city at the same time.
By the end of 2012, they started hiring, with a head of support in Chicago, and eight more people living and working from Nebraska, Missouri, Pennsylvania, Florida, and Tennessee. By 2014, they had their first international hires, in Thailand and the UK.
"Over the years, we've learned a few things about building and managing remote teams," said co-founder and CEO Wade Foster.
"Our story—and the stories of other remote companies - proves that it's possible to scale even when you're fully remote."
Foster's three tips for scaling a remote team are:
Both Zapier and Automattic show how you can build sizeable and successful organizations, virtually.
Virtual organizations are not for everyone, and come with various advantages and disadvantages.
While Automattic and Zapier provide great examples of how to scale an organization in a virtual and real sense, many companies have tried and failed to do so. In fact, once most organizations grow beyond 25 or 30 staff, the 'system' tends to take over, and the organizations can 'break'.
This is why we developed Functionly's easy-to-use, drag-and-drop online tools. They are immensely powerful, and fundamental for your organization's success. Getting the structure right to meet your organizational strategy is critical.
Whether you organize your virtual company within functional departments, or as a matrix, or flat or bottom-up, Functionly is here to help.
Sign up for free today, and get started with Functionly.
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