Earlier this summer, I was asked to submit an essay on how organizations will become more distributed in the future as part of a report on the future of work by the Economist. Here’s what I wrote:
A distributed company
I ran a software startup company called Automattic for eight years. We had a unique advantage when we launched our business: a running start. The software we were basing our business on – WordPress – had already been available for two years as an open source project. It had thousands of users which meant we had customers and revenues from day one. It also meant that there were dozens of open source volunteers working to improve the software in their spare time – an ideal talent pool from which to hire our first employees. But there was one big challenge: This group of volunteers was spread all over the world. There was Donncha in Ireland, Andy in Texas, Matt and Ryan in California. Should we be like other tech startups, open an office in San Francisco and ask everyone to move there? This turned out to be an existential question that shaped the core culture of our business and led us to become a pioneer in creating a distributed workforce. We decided to have everyone work from home.
As our business grew, people started joining the company from all over the world. We worked together via chat rooms and blogs where we communicated and collaborated all day long. Soon we realized that we wanted to spend some time in person, so we got together for weeklong coding retreats twice a year. All along, this distributed work environment felt right to all of us inside the company, but it caused friction on the outside. Partners thought it was weird that we had no offices (we later opened a co-working space in San Francisco for meetings and events). Lawyers and accountants warned us that we would soon be sued by someone about violating some labor or tax rule that we’d overlooked. Investors were convinced that our organizational chart would fall apart when we got to 30 or 40 people.
Before we even got to 20 people, a moment of truth arrived. Our product was doing very well – we were rapidly approaching 100 million users – and someone offered to buy our business for a very large amount of money. We had to decide if we wanted sell or keep going. If we kept going, would we raise more money and “grow up” by centralizing our business in San Francisco? We decided to stay independent, raise more money, and remain distributed. Why? Because even early on we could tell that working from home was incredibly empowering for our employees and a big competitive advantage for our business.
Our company is now over 260 people strong, working from over 30 countries and 190 cities across the world. The doomsday predictions from partners, accountants and investors never came true. On the contrary, our company is thriving. We’re #1 in our industry (WordPress currently powers 23% of all web sites on the internet) and employee happiness, retention and productivity are very high.
Based on our experience, I’m convinced that distributed workforces will bring change to many organizations and industries in the next decade. The change is driven by three main factors: flexible work, global talent, and open communications.
Employees on distributed teams get much more flexibility to shape their work lives. They control their schedules and work environments, they tend to have far fewer meetings and no commute, and of course they can live wherever they choose. For many people it comes down to something as simple as being able to take their sick kid to the doctor without needing permission from a boss or feeling guilty about leaving the office. Once an employee has experienced that kind of flexibility, they never want to go back to the old ways. The flip side is that distributed employees need to be more self-directed to get work done outside the traditional confines of set work hours and cubicle walls, which is not always easy and requires pro-active coaching and mentoring from the employer.
For a company, being distributed means having access to a global talent pool. There’s no need to compete over local talent. A distributed company attracts people from all over the world who raise their hand to say that they want to join this particular organization even though it’s thousands of miles away. The internet and our modern communication tools make those distances meaningless. If anything, distributed teams tend to work more efficiently because contributions are measured by results, not appearances, and because online tools expose just how arcane and inefficient it is to get groups of people into rooms all at the same time to discuss project status. Distributed workforces do cause increased HR complexities, but those are getting solved and are outweighed by the benefits of a global hiring pool.
Distributed teams tend to quickly abandon old communication methods like meetings and email, and transition to new, more real-time tools like chat and video conferencing. These tools are a must have for teams that work across lots of devices and time zones, and they have the added benefit of making information more open and more visible to the entire company. A particular team might use a real time chat channel for the majority of their communication, and that channel can also be made accessible to the rest of the company. That way anyone can follow along, contribute, and search old archives for information (which is much better than trapping organizational knowledge in email inboxes and meeting notes). Paradoxically, this increases visibility and openness for the entire organization despite people being in different locations. It also helps answer the first question many managers have when it comes to distributed teams: How do I know if people are working? Seeing someone’s daily activity in a chat channel is like seeing a heartbeat of their contribution to the organization.
Taken all together, we get increased flexibility over work environments which leads to happier employees; a global talent pool that helps businesses be more competitive; and more open communication tools that lead to more productive organizations. The changes an organization needs to go through to adopt distributed teams are not trivial, but the benefits are worth it and more achievable than ever in our connected age where we can turn on a phone or laptop anytime and connect to our co-workers anywhere in the world.