Calejo is a company of the time and an important example of today's organizational and disruptive move to a more virtual business and social world. A movement that is led by the startup world and which has now been accelerated by the Corona pandemic.
The startup company Calejo is now growing rapidly. With a virtual head office in Sundsvall, six employees living in Sundsvall, Stockholm and Kazan, as well as a network of dedicated AI specialists around the world, Calejo is very much a virtual company. This creates great benefits, but also a lot of challenges.
- The new technology and the new business world we encounter today are completely about to change today's companies and the way we are used to working together. The growing global competition for cutting-edge expertise, together with the pandemic, has only accelerated this development, says Calejo's CEO Johannes Holmberg.
The hierarchy had its time
The hierarchical organizations of the 19th century, which were formed and developed with the mass production of industrialism, are slowly being dismantled at the same time as new structures are being formed. The virtual organization is here to stay.
The hierarchical structure was designed to handle very complex processes with many people physically involved. Hierarchical organizations often controlled and managed all activities in a company's value chain, from raw materials to end customers. A single central management controlled the entire production process, where officials established rules and procedures for managing the entire workforce.
After the Second World War until the beginning of the 1980s, the trend was to build on more and more management layers with complementary specialists. This centralized management hierarchy was considered efficient for handling a large number of workers, but over time it proved to be inflexible, slow and sluggish.
Since the 1980s, many companies have instead chosen to flatten their organizations by decentralizing decisions and giving employees increased autonomy and power. The benefits are fewer middle managers, more efficient decision-making and faster communication. Redundant processes are cut off in combination with an increased focus on the core business. The emergence of flat network organizations, which use strategic partnerships and alliances, is becoming more common.
- However, this geographical and organizational spread has created many new challenges. Add to this a growing shortage of qualified skills and the fact that younger people in a completely different way than previous generations value their time and increasingly want to work from home, this completely explains the boost that virtual workplaces and organizations have received in the wake of the global corona pandemic, says Johannes Holmberg.
Virtual entrepreneurship has become a central part of a completely new and disruptive business revolution. The organization World Economic Forum describes virtual teams as "one of the biggest driving forces behind the future transformation of workplaces".
Virtual alliances a new trend
In the past, the virtual organizations have mostly been used to describe virtual alliances between groups and individuals from different organizations. They have gathered around a common goal and a common competence to build a specific product or service in a short time.
These alliances have often included customers, as well as competitors and suppliers, and they have often been temporary with short life and value cycles.
- The trend that has now been created, not least among today's all new startup companies, is the virtual organization or the virtual company. It is in principle built according to the same principles as the virtual alliance, but with a more long-term common goal and value culture, says Johannes Holmberg.
A virtual organization knows no geographical limitations. Several individuals from different geographical and cultural environments gather around a common idea, which includes unique skills and a specific challenge. The virtual organization is often in turn included as a natural building block in a virtual alliance, consisting of a network that also includes partners, suppliers, customers and even sometimes competitors.
- Most often, this alliance gathers around a common technical platform, which we at Calejo are now also about to build more of, Johannes Holmberg explains.
Great benefits of virtual business
There are great benefits to virtual business. In a virtual organization, the participants are, for better or worse, much more dependent on each other compared to previous historical organizational structures. The virtual company, where the interface between company, supplier and customers is constantly changing, is also more mobile and adaptable
One of the biggest benefits is on the skills side.
- With the whole world as a potential workplace, the opportunities to attract the very best available talent increase. Multicultural teams also have an easier time understanding the requirements of global customers. Virtual organizations also find it easier to attract female employees, which has a positive effect on leadership and corporate social responsibility, says Johannes Holmberg.
In addition, virtual organizations have proven to be more efficient and more sustainable, as less resources are spent on expensive offices and costly travelwhile increasing well-being through less stressful work environments. This in turn strengthens employee loyalty.
- In addition, scalability and access to new markets increase. But there are also major challenges in building a virtual organization. We are well aware of these, says Johannes Holmberg.
Leadership in focus
Virtual teams are often defined as a group of individuals who are mutually dependent on each other's competencies and interact based on a specific task and a specific common purpose. Unlike conventional teams, virtual teams lack the time, space, and organization constraints.
Each person in a virtual company contributes a unique skill. In order to make such an organization work, of course, high demands are placed, not least on governance, technical solutions and communication between the participants.
- Effective leadership in virtual organizations requires an understanding of cross-cultural relationships as well as knowledge and the ability to communicate and coordinate with the help of advanced technology. In addition, leaders of virtual organizations must always be available and able to motivate employees through a convincing vision, explains Johannes Holmberg.
The modern manager's challenge in a virtual organization is no longer to point the whole hand and tell what the employees should do.
- His or her most important challenge is to coordinate a workforce, which consists of geographically and culturally dispersed knowledge workers with divergent wishes and requirements. Today's virtual managers must lead and address their employees as if they were unpaid volunteers, who have committed themselves due to a shared vision, common goals and common goals and who also expect to participate in the project's management, concludes Johannes Holmberg.
Based on Calejo's founders' many years of experience, here are 14 challenges and just as much good advice for anyone who is in the process of building virtual teams.
A major challenge in virtual organizations is the feeling of losing control. This feeling needs to be managed and balanced with the help of careful strategic planning, well-defined processes, communication, coordination and trust between the various participants.
In addition, the boundaries are often unclear and fluid in a virtual organization and employees may therefore experience some uncertainty regarding affiliation, job roles, areas of responsibility, career paths and internal relationships.
Here it is important to ensure that all agreements and contracts are clear regarding roles, responsibilities and deliveries. In addition, management must be constantly prepared to reconsider these agreements. At the same time, it is important to be patient and realize that it takes time to develop well-functioning and efficient teams.
2. Correct team members
Make sure that skills and competencies complement and do not overlap. Recruitment is extremely central. Hiring the right people with the right skills, attitudes, personalities and values from the outset will be directly decisive for the development power.
The importance of well-functioning internal and external communication is often emphasized as an important success factor in virtual organizations.
Since the virtual teams will not be able to physically communicate and send information between them as in older work environments, it is necessary to create tools and policies that ensure active communication within the teams.
In a virtual organization, there are higher requirements for the team members to be extra diligent and disciplined when it comes to sharing information and keeping in touch with each other.
4. Corporate culture
Another important challenge is the creation and maintenance of a corporate culture with strong loyalty and cohesion. The team members - often for geographical reasons - often choose their own working hours, which easily risks leading to a fragmented corporate culture. Here, too, it is about the importance of functional communication - to continue to interact effectively and persistently - this despite the lack of face-to-face contact and reduced opportunities for impromptu conversations and getting to know each other a little more in depth. It is also important to absorb and quickly engage and activate new members of the teams.
6. Trust and confidence
Make sure to promote cooperation, trust and commitment. Trust and confidence can be defined as reliable and positive expectations of the company's and the company's representatives' motives, actions and decisions.
Creating the trust of the heart and the trust of the brain is a prerequisite for virtual team members to really want and dare to care for each other and fully recognize the competence of their employees. Trust and confidence create job satisfaction and together form the glue that holds the team together, contributes to increased profitability, improved shareholder value and thus drives the organization forward.
7. Relationship depth
By relationship depth is meant the extent and depth of the team members' connection to each other. Building and creating deep relationships is for obvious reasons a difficulty in virtual organizations. Geographical and cultural distances in combination with an often rapid change can easily create difficult obstacles to overcome. Strong and deep relationships, on the other hand, create more efficient and conflict-free teams. The importance of stimulating internal contacts - preferably also through face-to-face meetings - cannot be overemphasized.
8. Shared understanding
Make sure that each employee contributes. Sometimes this is talked about the concept of shared understanding. This means the common ability to see the whole in terms of the team's goals, including knowledge of and acceptance of the expertise that each team member possesses and how the team should interact together to realize overall strategic goals.
Because virtual teams do not meet each other in person and often lack emotional ties to each other, to leaders and to the organization, there is a risk of communication problems and a lack of empathy and understanding. If roles and responsibilities are not clearly defined in advance, misunderstandings and confusion are easily created, which in turn risks leading to conflicts and project delays.
9. Cross-cultural respect and insight
Cross-cultural respect and insight is another challenge in all organizations and especially virtual ones. Virtual teams often consist of members from different cultures around the world with their own culturally defined norms, values and assumptions.
10. Universal language
The term universal language means that each team member works with the same set of principles, norms, rules, and processes. Personal assumptions, expectations and interpretations can easily cause confusion in virtual organizations and hinder effective collaboration. That everyone works on the basis of a universal language leads to a common team identity and a stronger sense of belonging between the members.
11. Virtual learning
Linked to recruitment is the virtual organization's ability to create learning in order to constantly improve the team members' innovative capacity. Virtual organizations must constantly be at the forefront of developing sustainable and competitive solutions to new customer requirements. Therefore, it is important to constantly convey skills and education that are crucial to the team's success.
12. Knowledge sharing
Competence is often the strength of virtual organizations, but can also be their weakness if there is no sharing of knowledge between team members. The fact that team members share what they know for the best of the team can be directly decisive for an organization's rise or fall. Open transfer of knowledge always leads to common mental models, shared understanding and better decision-making.
13. Small teams
One experience Calejo has gained is that in virtual contexts it is not possible to have teams as large as in more traditional organizations. When the physical contact disappears, it is no longer possible to work as efficiently in teams exceeding five people. The difficulty of holding together and directing the work increases with the size of the groups. Unfortunately, this also applies to the discipline of attendance during the digital meetings.
14. Important with incentives
With virtual organizations, the game plan changes. An important way to increase motivation and commitment is various forms of incentives. It is important to understand here that the factors that drive people are both individual and cultural. In some cultures, options and co-ownership are not at all as interesting as financial encouragement and personal rewards, while they are a prerequisite for engaging the right skills in other cultures. At the same time, these preferences can be highly individual and differ greatly between different people in one and the same culture. The most important thing is to maintain focus on this in connection with salary and development talks.