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Coronavirus and the Move to ‘Virtual Organisations’

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When you run a busy virtual office system as we do you become aware of trends that are taking place  in the wider business world. Indeed, there is a very interesting article in the latest issue of the ‘Economist’ about companies that have no real base – ‘virtual organisations’.  They call them ‘fully distributed’ firms.

Such “fully distributed” firms were on the rise before covid-19. As national lockdowns spread, conventional ones are forced into similar arrangements. Those that have grown up this way offer lessons.

Distributed organisations are as old as the internet. Its first users 50 years ago realised how much can be done by swapping emails and digital files. These exchanges led to the development of “open source” software, jointly written by groups of strangers often geographically distant.  Hold Everything has been around for more than 30 years and has been a pioneer in virtual office working.

Today most distributed startups have open-source roots. Gatsby is one. Nearly all 1,200 employees of another, Automattic, best known for WordPress, software to build websites, work from home. GitHub, which hosts millions of open-source projects (and was acquired by Microsoft in 2018), may be the world’s biggest distributed enterprise. Two-thirds of its 2,000 staff work remotely. Most firms that build blockchains, a type of distributed database, are by their nature dispersed.

Plenty of startups start out distributed to avoid high rents—and so high wages—in Silicon Valley and other tech centres. Many opt to stay that way. Joel Gascoigne, boss of Buffer, which helps customers manage social-media accounts, works remotely in Boulder, Colorado. Stripe, an online-payments firm, has a head office in San Francisco but its new engineering hub is a collection of remote workers.


Besides new tools, distributed firms need novel management practices. One rule is not to mix physical and virtual teams. Online participants in mixed meetings often feel excluded. GitHub’s boss, Nat Friedman, has all employees—himself included—log in to meetings virtually, even if they are in the office. Looking over someone’s shoulder to see if they are working (or worse, use software to do it) is another no-no. Remote workers do not slack off, as some managers fear. Trust your team, set clear and, where possible, measurable goals, and let people do their thing, counsels Mr Mathews. To foster camaraderie, Buffer organises an annual in-person retreat (covid-19 will push it online this year).  Here, at Hold Everything we concur absolutely in this way of thinking.  We are sure that when things move back to some sort of ‘normal’ there will be a pronounced shift toward decentralised offices and the need for virtual offices like our will become even more apparent.

One of the crucial elements in working remotely is, of course ‘trust’.  Trust also requires transparency and explicitness—another reason documentation is key, says Michael Pryor, co-founder of Trello (whose workforce is 80% remote). Discussions that lead to a decision must be captured in writing, he explains, so everyone understands the trade-offs being considered. As a result, distributed firms favour wordsmiths, not good speakers as traditional firms do. Good writing demands clear thinking and discipline.

The pandemic may lead some companies that have outsourced lots of operations to the cloud to go a step further and get rid of at least some offices. “I just don’t think we are going to go back [to business as usual],” says Frank Slootman, boss of Snowflake, a database firm. Even digerati like Twitter plan to turn more virtual.  It looks as if the Monday morning chat around the water cooler has gone for ever.  the Economist article makes a very salient and powerful point when they say ‘New firms will erect a new virtual floor, which others then inhabit. The coronavirus-fuelled exodus to cyberspace is unlikely to be the last.’