Go Distributed Development Or Die: 3 Reasons Why A Distributed Team Is Business Critical
- The pandemic has made it self-evident that remote work and distributed teams are integral and indispensable for business continuity.
- With teams of geographically distributed employees, businesses have the resilience to continue working no matter what happens.
- But building a distributed team is not just a defensive move, it's an offensive one as well. It allows firms to stay technologically relevant by recruiting top talent from all over the world.
- It opens doors to local markets, and thereby offers insulation. It sustains and improves employee productivity. And it lets employers have full control over timelines, processes and deliverables.
Calgary, a cosmopolitan city in western Canada, is no stranger to rain. In fact, six months out of the year, its residents head out for the day with an umbrella in hand. However, in 2013, tumultuous rain caught the city by surprise. When owner Geoff Last went to check his company's wine store, he only expected to see "maybe 6 inches of water on the floor." But it was a gross underestimate. The flooding forced more than 100,000 people from their homes, and resulted in $6 billion in damages.
It also left thousands of businesses and their employees facing an uncertain future; most of them would have to completely rebuilt from scratch. A few companies, however, such as ATB Financial had a slightly different story. Even though their office headquarters were closed due to the flooding, employees were able to keep working – from home. "Corporate Calgary is very good at working remotely," commented ATB Financial analystTodd Hirsch, at the time. "That's why we all have these smartphones and email and remote servers, so that when these disruptions happen, at least the bare bones of business can still happen."
When natural disasters like the Calgary floods or black swan events like COVID-19 occur, they highlight the simple fact that leaders need to have a continuity plan in place. And the pandemic has made it self-evident that remote work and distributed teams are integral and indispensable to any such plan. With teams of geographically distributed employees, businesses have the resilience to continue working no matter what happens. It's the business equivalent of not putting all your eggs in one basket.
But building a distributed team is not just a defensive move, it's an offensive one as well. It allows firms to recruit top talent, and have full control over timelines, processes and deliverables.If executed well, the probabilities stack up in favour of both growth and resilience. Think about it another way: a distributed workforce is like transitioning from hopping on one foot to running with two legs and giving your growing enterprise more than one lung to live on.
To expand, here are 3 reasons why building a distributed team is business critical:
Global Talent Hotspots And The Arbitrage Equation
When hiring strategies are not bound by geographical boundaries, talent from the world's hotspots is up for grabs. But leaders would be mistaken to immediately look towards Silicon Valley. After all, as Harvard Business Review points out, "talent hotspots can rise and fall." In the 1950's, it was Detroit not Silicon Valley, that was the locus of rapid growth. And come the 21st century, it was an unheard-of Bengaluru that became the epicentre of immense business activity. From ABB, Dell, SAP and GE to Adobe Amadeus, Walmart Labs, and JP Morgan Chase, large MNCs have set up service and R&D centres in the city.
Therefore, confining operations to a single location is a flawed strategy for two reasons. First, since the locus of global talent shifts periodically, there's the risk of stagnation. Further, to stay technologically relevant, firms need skilled software developers in large numbers, and need to be flexible enough to go where the talent is. Take the examples of Blockbuster, Borders, or KODAK, each of which disappeared into irrelevance because they failed to transition towards a digital model. To survive, innovation is vital. The fact that 88% of 1955's Fortune 500 companies were off the list by 2014 is just a reminder that today, you can't afford a laissez-faire attitude.
When Morgan Stanley sought a 'critical mass of employees to support [its] global functions', it looked to India. Today, the company's Indian technologists amount to about 22% of the global technologist headcount. While bridging digital disruptions, the benefit of setting up shop in a location like India is that you can play the cost-arbitrage card to offer or get more for the same price. In a fierce market, that's a good recipe for resilience, especially when the India-US labour price differential can even be 1:10. If you think this is unimportant, recall how the market leader COMPAQ lost steam because of price wars with Dell. GM too was at the wrong end of the stick when its sales dropped and its costs were fixed - and the titan had to declare bankruptcy.
The Multi-Perspective, Multi-Market Dynamic
Diversity drives creativity so companies with distributed teams that have a mix of demographics enjoy an advantage. Indeed research from McKinsey indicates that businesses in the top quartile for ethnic diversity were 35% more likely to exhibit a superior financial performance compared to their national industry median. For example, a key focus area of Samsung's R&D centre in Bengaluru, SRI-B, is Make for India. Here, SRI-B gathers local consumer insights and develops software accordingly. This is what led to the development of the Chat Over Video feature, which was only made possible after understanding how the local community used 6.4-inch phones.
In a similar vein, diversity helps open doors to local markets, and thereby offer insulation; if market A shuts down, you still have markets X, Y and Z to sustain your brand. You're not firing on all cylinders, but you're still firing. This way you're more resilient to, say, a Hurricane Katrina, a US-China trade war, a Black Monday crash, or a Russia-Saudi Arabia oil price tussle.
Sustained And Improved Employee Productivity
Effective setups for distributed models can enable communication and cooperation, enable productivity and synergy even if everything else grinds to a standstill. A cross-industry study of remote workers by Connect Solutions suggests the same. It found that amongst those who work remotely, 77% of staff were more productive when they worked out of HQ, and 30% of participants reported that they accomplished more in less time.
Final diagnosis: going distributed is important, even vital for business continuity and resilience.The sooner businesses can embrace the idea of setting up a team of employees working in a different city, country, and even continent, the more flexible and prepared they will be to respond to any disaster or disruption.
Hire the best tech talent and accelerate innovation and growth with a distributed development team in India. x10 by ANSR will help you recruit the top 10% of Indian software engineers and set up your distributed team for you so that your business can scale quickly and seamlessly. Schedule a call with us today to get started.
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