Ah, the Virtual Office.

I saw a great question on a LinkedIn group from an individual looking at eliminating the costs associated with a physical office.

If you are a small firm (read “less than 10 employees/partners”), then it can be a logical way to go for both cost and lifestyle.  This is what we have at Cirrus.

The technology is readily available to implement virtualization. Google, Zoho, Dropbox, and Microsoft’s Office 365 provide IT infrastructure and collaboration tools. Skype and a myriad of VoIP providers provide hosted PBX solutions. Grasshopper and Box even allow you to have a virtual PBX and use your cell phone as the extension or use RingCentral for even more of the “office” feel.

So where’s the problem?

While you cannot discount eliminating the costs of an office and its required support systems, there are new challenges you should be aware of with any virtualized work environment. If virtualization is to work, extra effort has to be made to communicate, build internal relationships, and maintain the organization’s culture.

Effective communication is critical for successful organizations. While communication with customers is easy enough, don’t underestimate the value or quantity of the informal communication that takes place in an office environment. Those impromptu meetings in the hall that lead to a great idea or a break through on a challenge will be no more. Extra care must be taken so that internal communication does not simply turn into meeting invites and documentation.

The effect of proximity on relationships that develop between coworkers is easily overlooked until it is no longer there. We are social beings. We need physical interaction. I’ve found Skype video conferences and regular, informal face to face time help to make sure team members don’t succumb to feelings of isolation and possibly depression.

Finally, an organization’s culture is also critical for its long-term success. This culture has to be maintained and re-enforced by the leadership of an organization. In a virtual office environment, how will you lead by example on a daily basis? How will you communicate that? What and how will you celebrate as an organization? How often will you get together for reasons other than business?

These aren’t impossible questions to answer, but they do need answers. Otherwise, what will start out as a great idea for cost savings and lifestyle will degenerate into chaos.