When I'm writing this post (mid-2018), the distributed business model is flourishing and spreading massively. I’ve been working as a location independent entrepreneur for years now, and it was very informative and exciting to see how companies have approached remote working in recent years.
Everything started with internet technologies and social media spreading far and wide across the world in the early 2000s. I participated in more and more online video meetings while still working in a classic office setting. Speaking to a client overseas via an online meeting was a thing 15 years ago. Now it’s the norm.
Then new shiny tools appeared: project management, business instant messages, online business networks, intranets, and so on. At that time, a large part of the business process was managed online, regardless of whether or not the company had an office. Then startup companies came in.
The early adopters of distributed business
“Ditching the office” and managing a remote team was first embraced by startup companies. They made it look fresh and engaging. Buffer and Basecamp were the first big ones who not just worked with a remote team but also embraced the idea and wrote severe knowledge materials, books around it and built up their whole company with the distributed business model in the heart.
Then, around five years ago, the number of online entrepreneurs, remote freelancers, and digital nomads started rapidly increasing. More and more remote companies appeared that helped businesses to find new talent remotely and more and more tools gained attention that helped businesses thrive in this remote environment.
The current state of distributed business
Nowadays, the distributed business model is not just a shiny cool thing for startup companies or an embraced option for big businesses – it is a viable route for SMEs as well.
Owl Lab published a survey at the end of 2017 in which they asked 1000+ US-based workers on remote working. The report entitled “The State of Remote Work in 2017” ended up with some exciting results. If you haven’t done so yet, give it a read. Some key insights from the findings: among employees who don’t work remotely, 48% stated that they would like to do so at least once a week. Also, among employees who don’t work remotely today, 65% of them would want to work remotely at least once a month in the future. So, there is a clear need to work in the distributed business model on the employee side– but what about the business owners?
The study shows that fully distributed companies were able to hire 33% faster on average than other companies. They have access to a widening pool of talent and also the hiring process is much shorter. Also, those who support remote work have 25% lower employee turnover than companies that don’t. Now it’s clear that finding and retaining employees remotely is more comfortable than in a classic business model – which shouldn’t be a surprise as most of the employees are already embracing or at least wish to work remotely. However, does it affect employee performance?
In the study, managers see equal performance between their onsite and remote employees, and they consider performance the most important factor when recruiting a new remote team member. However, for managers, the hardest part isn’t project management online, productivity tracking online or direct employee management but cultivating a company culture online. The biggest challenge companies are facing right now when applying a distributed business model is to create an engaging, motivating company culture that helps to retain and cherish employees.
Overall, the study shows that remote working is one of the leading trends in business management, wished both by the employees and the employers. However, the new model has new challenges as well, which need to be addressed.