What Are Fully Distributed Teams? How Do They Work?

What they lack in physical offices, they make up for with talent, diversity and savings. Are distributed teams the way of the future?

Written by Stephen Gossett
What Are Fully Distributed Teams? How Do They Work?
Image: Canva / Built In
UPDATED BY
Matthew Urwin | Jun 08, 2023

Distributed teams are companies without a central headquarters and whose employees all work remotely. This is different from remote and hybrid work, which have become more popular models lately, since both of those still have a physical office space where at least some workers show up at least some of the time.

According to Pew Research, 35 percent of workers in jobs that can be done remotely choose to work from home full-time. So it stands to reason that the concept of distributed teams — and the flexibility it presents — is bound to spread in the years to come.

What Are Distributed Teams?

Distributed teams are made up of employees who work entirely remotely rather than at a central headquarters. By utilizing tools like cloud environments and organizational software, workers are able to safely access data and accomplish goals.

Distributed companies in the modern sense had a watershed moment in the late 1950s and early 1960s, according to John O’Duinn, author of Distributed Teams: The Art and Practice of Working Together While Physically Apart. CompInc, founded in 1957, and Freelance Programmers, founded in 1962, were fully distributed and remote. Perhaps not surprisingly, both were tech outfits. Employees from both companies wrote and snail-mailed in code.

Constant technological advancements, changes in the employer/employee dynamic and generational shifts, like the emergence of digital natives, got us to a point where distributed companies seemed like a viable option, O’Duinn wrote.

Many companies with distributed teams are also tech companies. Automattic (which owns WordPress, WooCommerce and Tumblr), GitLab, InVision, Buffer, Zapier and Groove are all currently office-free, with employees scattered across the nation or globe — and were so long before the pandemic.

Still, relatively few major companies have announced plans to permanently remain fully distributed after the pandemic. But it’s certainly something that organizations have considered like never before: Do we really need this office at all? 

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How Fully Distributed Teams Work

The distributed team toolkit looks similar to those of most companies that transitioned to remote — liberal doses of Slack, Zoom and archivable conversation thread-style platforms. Asynchronous communication, generally speaking, tends to be the go-to position.

Not surprisingly, many of the companies that have embraced distribution also trade in it. InVision’s apps include a virtual collaborative whiteboard and one designed to ease design-developer handoff for remote product and engineering teams.

Stephen Gates, head design evangelist at InVision, told Built In such collaborative tools can go a long way to counteracting the criticism that, without firm roots, a new organization will struggle to establish a company culture. In fact, deadweights like fixed, bulky physical brand bibles slow that process down, rather than supporting it, he said: “Putting out these big monolithic things that didn’t change would often sort of grind a lot of productivity to a halt.”

Tools for Distributed Teams

  • Real-time communication: Slack, Microsoft Teams, Threads
  • Video conferencing: Zoom, Skype, Vowel, Google Meet, Loom
  • Cloud storage: Google Drive, Dropbox, Box, OneDrive, Air
  • Project management: Monday, Asana, Trello, Jira
  • Customer relationship management: Salesforce, HubSpot, ActiveCampaign
  • Design collaboration: Figma, InVision, Mural, Miro
  • Software engineering: GitHub, GitLab, Visual Studio Code
  • Password managers: 1Password, LastPass

But just as important as tools are the expectations set around them. “For us it’s, if I send you an email, the expectation is you’re going to get back to me today. If I send you a Slack or something like that, the expectation is you get back to me when you’re at your desk and if I text you, that’s like the bat signal, red phone — get back to me right now,” Gates said.

“It’s more just sort of making sure that there are clear expectations around how do we communicate and do some of those things,” he added.

But don’t they ever miss the traditional office environment? The in-person camaraderie? The chance-encounter magic of bouncing ideas inside the same room?

“No I don’t miss it,” GitLab diversity and inclusion manager Candace Byrdsong Williams told Built In, noting that, like most fully distributed teams, GitLab has annual all-team meet-ups and regular department meet-ups, at least during normal travel times, to foster connection. 

“I like a company that kind of offers me pretty much whatever I need to be able to be my whole self both at work and at home,” she said.

RelatedThe Great ‘Remote Work Experiment’ Looks Quite Different for Parents

 

Effectively Managing Distributed Teams

While communication tools are essential for distributed teams, leaders may want to consider other techniques and strategies for effectively managing distributed teams

 

Maintain Regular Meetings

Distributed teammates may rarely, if ever, see each other in person, so managers must take steps to stay connected with everyone on the team. Holding team meetings once a week is a good way to update team members on any changes and keep employees on the same page. Managers can also set up regular one-on-one meetings with each employee, giving individuals the chance to share any specific insights and concerns.  

 

Select Communication Tools for Different Purposes

When cultivating a suite of communication tools, it helps to assign each tool a specific purpose. For example, a distributed team may use Slack or Microsoft Teams for general communications while reserving Asana or Airtable for project-related questions and comments. And while Google Meet is great for holding small team meetings, a company may decide to employ Zoom or another video conferencing platform for larger organization meetings. 

 

Establish Boundaries for Quiet Time

Staying connected is a must for distributed teams, but too many meetings can become overwhelming. Managers may decide to designate Friday as a day when no meetings can be scheduled. Or a business may set aside time in the morning on Monday as ‘quiet time.’ Creating space for employees to focus solely on their work gives distributed teams room to breathe and encourages a healthier work-life balance.   

 

Set Clear Expectations and Production Goals

A lack of in-person communication makes it all the more important for managers to define the expectations of distributed workers’ roles and their production goals. Emphasizing concrete targets also means managers can shift attention away from working specific hours or days. As long as employees meet their goals, managers could allow room for flexible schedules and other practices that promote work-life balance.  

 

Prioritize Independence Among Team Members

Managers must be able to trust their employees for distributed teams to function properly. There’s nothing wrong with checking in once in a while and assigning urgent tasks as needed. Otherwise, managers can empower employees to cultivate their time management skills by letting them decide how to best structure their days. This way, managers can ensure their teams remain productive while avoiding micromanagement

 

Share and Encourage Feedback

The distance between team members can make it easier for misunderstandings to occur, but managers can counter this by openly voicing any concerns and nudging employees to do the same. Besides offering constructive criticism, managers can elicit feedback from employees in the form of engagement surveys. Sustaining two-way communication keeps everyone in the know and enables employees to play an active part in initiating any changes. 

 

Celebrate Team Successes and Personal Milestones

Making a point of highlighting successes like revenue gains and production goals met can remind distributed employees that their hard work matters and that they’re part of something bigger than themselves. Sharing news about individuals’ personal milestones can also inspire a greater sense of camaraderie and reaffirm for employees that they’re not just cogs in a machine. 

  

Give Distributed Employees Chances to Interact

To create stronger bonds among team members, managers can design more ways for employees to interact outside of meetings. Virtual happy hours, online lunches and topic-specific group chats are just a few virtual activities that can bring distributed teams closer together. And if everyone’s comfortable, distributed teams can decide to meet up in a city for a few days to spend time together in person.

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What Are the Benefits of Distributed Teams?

While distributed teams may require more secure technologies and new forms of communication, there are perks that make this work model well worth any adjustments.

 

Cuts Costs

O’Duinn’s aforementioned Distributed Teams book, published in 2018, is a product of the BC era (Before COVID) and — with tips about things like camera positioning and lighting for video calls, which we’ve all now intuited — it sometimes reads that way. But the author sounds downright prescient in his skepticism of office costs.

“If you reduced how much money you spent on physical offices, what else could you do with that money and organizational focus?” he asks, anticipating the question that countless CEOs would soon consider.

Dell saved more than $39 million over two years after encouraging remote work, and Aetna saves $78 million annually by urging employees who can work remotely to do so, according to O’Duinn. “This is a competitive advantage over companies that pay for and operate physical offices,” he argues.

RelatedHow to Create a Successful Remote Onboarding Plan

 

Provides Larger Talent Pool

Another advantage of the distributed model is a limitless potential talent pool. 

“On many occasions, we’ve been able to hire the best and brightest because of our remote organization,” Shelby Wolpa, VP of people operations at InVision, told Built In. 

Coordinating all those time zones can at times be a bit of a challenge, but strictly in terms of talent acquisition, internationalism and the ability to leverage talent in places that might be traditionally considered tech flyover country proved a strategic advantage.

InVision founder Clark Valberg told Inc in 2018 that, when he established the company, he hired engineers in the middle of the United States and Canada, paying good talent more than they were accustomed to, without burdening himself with relocation costs. He eventually concluded: Why bother with an office at all?

“A lot of people who lived in San Francisco or New York moved back home to be closer to their [families] and have been able to take the living that they had with them.”

Back when the company was founded, in order to compete, “especially as a smaller company and to be able to get talent from bigger companies, we needed an advantage,” Gates told Built In. “A lot of people who lived in San Francisco or New York moved back home to be closer to their [families] and have been able to take the living that they had with them. It really does give you the ability to do something really special.”

That said, flexibility isn’t total. Some departments, like sales or customer support, might not lend themselves to asynchronous communication as well as others, like, say, data teams. And that might tempt recruiters for distributed companies to narrow their search to a specific time zone.

“It can be so tricky looking for someone to join a team when you know that the team is largely based in another time zone,” Keisha Washington, recruiting manager at Buffer, told Built In.

But she tries to push back at that as much as possible. “We’ve had situations where we said, ‘Well, ideally we’d love for this person to be maybe between this and this time zone.’ And then we’ve gone back and said, ‘You know what, that doesn’t feel great. We want to open it back up,’” she said.

But is such a huge net ever a drawback? Limitless options can breed paradox-of-choice paralysis, no? Maybe not paralysis, but it definitely means high application rates. “It makes for thousands of applications in our inbox as opposed to maybe some companies that might have a few hundred ... but it’s a great problem to have,” Washington said.

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Helps With Diversity and Inclusion

Just because a company is distributed, doesn’t mean it’s magically conferred excellence in diversity, equity and inclusion. A company can have no office and still lack diversity. But as O’Duinn points out in his book, distributed teams do tend to be more diverse, and more diverse teams tend to avoid hivemind better than homogeneous ones.

That diversity manifests in terms of geography, race and ethnicity, but also gender. As of 2023, women make up more than 30 percent of GitLab’s global workforce, leading to a slightly better ratio than the four-to-one ratio in which women find themselves outnumbered by men within tech companies. (GitLab, which has won diversity accolades, is notably — and laudably — transparent about its identity composition.)

Some workers with disabilities view the no-office set-up as more amenable too. InVision employs workers with health and accessibility considerations “who are able to unlock their talent and expertise because of the flexibility and inclusivity our remote environment provides.”

Of course, diversity and inclusion are not one and the same. As Verna Myers famously said, “Diversity is being invited to the party; inclusion is being asked to dance.” That means conscious outreach efforts, which could conceivably be a challenge in a permanently dispersed model.

“Once we source and find these different ways to find people, we make sure they’re going to have a great experience once we bring them on board.”

“We sort of immediately go, ‘Wow, the world is my marketplace,’” in terms of talent attraction, Washington said. “But we also have to keep in mind that, once we source and find these different ways to find people, we make sure they’re going to have a great experience once we bring them on board.”

As a company that “lives in Slack,” Buffer has several identity-centered channels — teammates who are Black, Asian, women of color, Spanish speakers and more — which it built after polling employees about diversity programming.

There’s also an ally channel. “Allyship is a huge key to anyone who’s talking about having a more diverse organization,” said Washington. “You need to think about who’s going to be that support system to sort of help folks navigate internally.”

Benefits of Distributed Teams

  1. No physical office space helps cut costs.
  2. Provides a larger talent pool.
  3. Allows teams to recruit more diverse talent.
  4. Offers flexibility for workers.

 

What Are the Downsides of Distributed Teams?

The affection expressed for the distributed setup by employees at firms like InVision and GitLab is no doubt sincere, but it does come with some selection bias: People who chose to work at distributed companies, pre-pandemic, are of course likely to have nice things to say about the setup. But, according to some research, they might be a minority.

 

Increases Isolation

A Morning Consult survey, commissioned by the New York Times and conducted in 2021, found that only 31 percent of respondents preferred permanent fully-remote work. “Among those craving the routines of office life and cubicle chatter: social butterflies, managers, new hires eager to meet colleagues, and people with noisy or crowded homes,” reported the Times.

Particularly in the case of new hires, a lack of chance encounters can make it even harder to form relationships in remote environments and become established at a company.  

 

Dissolves Work-Life Boundaries

Without the practice of limiting work to a physical office, distributed employees may not know how to create a healthy divide between their professional and personal lives. This dilemma has caused a spike in employee burnout, with 42 percent of the global workforce reporting burnout. 

If companies don’t take steps to address feelings of burnout among distributed teams, they could see an increase in employee turnover and endure the costs that come with it. 

 

Distributed Teams vs. Remote Teams

The concept of distributed teams has become muddled in the age of remote work.

Remote teams consist of some or all members who work in locations outside of a main office. The key here is the phrase ‘main office.’ Companies with remote teams have a central location where remote team members can come in to work full-time or part-time as part of a hybrid setup

Distributed teams are a part of companies that do not have a central office location. These organizations may have multiple offices across the country or the globe, or they may not have a physical office at all. Distributed teams then rely on digital tools as their main form of communication, with no employees reporting in-person to a common physical office.

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