Virtual Success

Virtual Success

Welcome to the 21st century: geography has been replaced by virtuality. However, the successful virtual enterprise requires a plan, plenty of trust, the right culture and top people who support the effortReader ROI IN THIS STORY YOU WILL LEARN Why the right cultural attitude is important in the virtual organisation How one organisation is successfully using collaboration products Important reasons to consider telecommuting The payback of having employees work remotely When National Electricity Market Management Company (NEMMCO) managing director Stephen van der Mye took the helm of the brand-new organisation in 1997, he was determined to recruit only the best talent in the country. With a range of specialist skills needed, no inherited organisational structure or staff to draw from and a limited talent pool to recruit from, attracting and keeping human resources was always going to be an issue. So, if taking on the very best people around meant promising they could stay exactly where they were upon appointment rather than having to move to a NEMMCO office location, then so be it.

Which explains why van der Mye works in Melbourne and his executive assistant in Brisbane, and managers and staff members of functional groups are frequently split across several locations. Project team members are rarely based in the same city and typically contain a mix of state government representatives, NEMMCO staff, market participants and supplier staff, with NEMMCO staff having raised to an art form the act of gaining consensus remotely. Oh - and, of course, individual staff members frequently work from home and hotels as well as NEMMCO offices.

The general manager routinely processes change control authorisations flying between Melbourne and Brisbane, while one particular document must regularly be concurrently edited by planning team members in Sydney, Melbourne and Brisbane The organisation can't claim complete success in its aim of building the ultimate virtual office environment - there's certainly no technological silver bullet available yet - but it has made significant headway, and van der Mye can claim success in recruiting the most capable men and women for the job.

"It all started because when the organisation was being established there was an objective forged to make sure we got the best possible people in the organisation," explains information services head David Waterson. "We actually didn't inherit any existing organisational people; so, when we were looking for people to staff NEMMCO, it became apparent that to get the right people with the right skills we had to facilitate them working from locations other than a traditional head office type location.

"Since then we've progressively populated the organisation. I think there's something in the order of 160 people in NEMMCO at the moment, and because of that philosophy, we now have particular business functions and particular levels in the organisation distributed through the various capital cities. That means we need to have the facility available for them to work cooperatively as if they were closely located physically."

While technological limitations remain, NEMMCO can proudly proclaim itself a virtual enterprise, where a network-centric group of employees, free agents and alliance partners all group together to get the job done. Like any virtual enterprise, just where those participants work is irrelevant; the point is that they all are tied in to a nicely woven web of communication and data networks, remote access, and interoperable Web applications. Simul-taneously, many of the organisations that interrelate with NEMMCO and contribute members to such virtual teams are moving towards their own versions of the virtual office.

"There has been a general trend to more of a virtual organisation just as NEMMCO has moved towards that," Waterson says. "For instance, the people we're working with at the full retail competition level have a development centre in Chicago; they also have resources involved from Europe and from California, and they're interacting with people that are located here in Australia - both NEMMCO and also some of their own staff." One example of how collaboration works involves the "Statement of Opportunity", the planning document for forecasting the outlook of the electricity industry. The 10MB Microsoft Word document is concurrently edited with the help of Microsoft NetMeeting by a team of people in four sites.

Figuring out how to "stay in touch" is one of the big challenges for colleagues who have to work together, especially when most of them work in different places. Staying in touch doesn't just mean communicating - it means sharing documents, organising calendars and clarifying who's doing what by when. NEMMCO has made significant headway in the lot; but, Waterson says, none of it could have been achieved without establishing the right cultural framework from the start.

Starting from Scratch

NEMMCO exists to provide an effective infrastructure for the efficient operation of the wholesale national electricity market (NEM). It also manages the National Electricity Grid, set up to combine power generation and distribution for New South Wales, Victoria, Queensland and South Australia. The national organisation has five sites, with branch offices in three sates, and also works extensively with market participants located anywhere down the eastern seaboard.

Its strategic objectives include ensuring the power exchange is operated and developed competently, and that the power system ensures secure supply to the community. It is also tasked with ensuring NEMMCO systems and technical infrastructure have the required level of availability, flexibility and reliability to support the operation and development of the NEM cost-effectively.

Other objectives include that:

the financial and operational management of NEMMCO be undertaken in a demonstrably commercial manner;

NEMMCO be recognised as an employer of choice that values and develops it employees;NEMMCO's processes operate in a transparent manner to the market so as to minimise the risk of dispute; andStakeholder trust and respect be built through ongoing relationship management and effective communication.

As part of its strategic planning processes the embryonic organisation developed what it saw as the nine strategic themes that are important to NEMMCO as a business, Waterson says. Some of them are the things you'd expect: like making sure the power systems run properly and that it has reliability in systems. A major theme revolves around improving the management of stakeholder relationships and developing a formalised program of understanding the needs of those stakeholders.

The organisation strives always to be able to anticipate future stakeholder needs while working out what it is that it currently does well and what it needs to improve on. It is currently going through a process of trying to work out how to do both things better and how to formalise the process. Once the strategy is in place, it plans to track the assessment of its stakeholders and the way its relationship with them is changing over time.

It's all about making the virtual organisation tighter and more cohesive, Waterson says. "Because we're so fragmented in terms of the physical location of people, we obviously need to have good tools so that we have a good understanding of where a particular organisation is at. They might actually have contact with NEMMCO through three or four or five or six different avenues and we need to somehow pull that information together so we have a full picture of their concerns and issues.

"Part of the relationship management side is to establish a tool that will capture those particular feelings from various contacts and to identify issues and to track the resolution of those issues and to provide the appropriate follow up."

Technology Underpinnings

NEMMCO uses various technologies to underpin its virtual office environment, some quite conventional and others rather more novel.

For instance, it relies heavily on Lotus Notes to provide simple workflows and replication capability to support the movement and replication of information between locations, and for change management, document publishing, relationship tracking and problem logging. It also uses Microsoft NetMeeting for collaborative interaction, to allow people to work concurrently on documents from remote locations. However, there are equally other collaborative computing technologies it relies on, including Internet-based list servers supported by products like SmartGroups to facilitate document processing, messaging and consensus voting.

There are yet more collaborative computing technologies at work, including some chosen by third parties such as consultants. For instance, Cap Gemini Ernst & Young, which is driving NEMMCO's Full Retail Competition project, is using an Internet-based dedicated support tool called ePMO to provide market participants, government stakeholders and others access to documents detailing the plans, the risks and all the issues.

NEMMCO also has videoconferencing in place in all locations and uses it a lot. While corporate affairs head Paul Price notes many issues still remain surrounding ease of use, he says videoconferencing remains an indispensable tool, as does audio conferencing. A VPN also plays an important role.

Nevertheless, while tools are important to the success of a virtual office, Waterson says there remain significant gaps in the tools currently available that are likely to be unfilled for at least another year or two. It continues to closely watch developments in videoconferencing and track availability of new group tools"We're looking to the Internet and the sorts of capabilities that are coming through that, such as the SmartGroups list server and the way documents are managed at the Internet level," he says. "We think the Internet is going to push along this sort of technology because, when you look at it, the Internet is really the ultimate in the virtual organisation and a collaborative-type environment. So we want to put of the experience coming out of that back into the corporate organisation."

NEMMCO has a number of other plans on the technology front, including moving more to using browsers to allow people to access applications from kiosks at airports and other remote locations. It is also moving to putting voice over IP so that if someone is at home on their cable modem communicating with work, the PABX can find them and route their telephone calls into their computer. NEMMCO finds cable modems a cost-effective mechanism to allow people to interact with NEMMCO systems and a number of support people and general managers already work at home via cable modem.

Indeed, the capacity to work from home is vital to NEMMCO's production of instructions for the dispatch of the power system, which must be released every five minutes. NEMMCO's policy is to suspend the market if new dispatch instructions have been unable to be automatically determined for a period of 30 minutes (that is, six successive missed five-minute dispatch calculations). During a market suspension, pricing is determined from the most recently published pre-dispatch schedule capped by the administered price cap.

No one wants a market suspension, but producing that dispatch demands a fully operational system.

"So there's a question: the market is down, you've got 20 minutes before the market is suspended, it's 2am, how do your support people get the response and get the system up before there is a market suspension? They might be asleep at home in bed," Waterson says.

"Now, they get a beeper automatically from the system saying it has just gone down, they climb out of bed, whip into their study and sit down at their cable modem connection. They log onto the systems remotely from their study and do the diagnosis [and are] ready to get the system back up in that five-, 10-minute interval to avoid a market outage.

"We used to use ISDN links and we used to have a situation where people would have to drive in [from home] to do that sort of stuff. We now facilitate that sort of action from home."

Cultural Cringe

It may be at least a year or two before the technology is sophisticated enough to fully suit NEMMCO's needs; but then again, there's much more to building virtual teams than technology, Price says. Don't even think of trying to set up a virtual office environment until you have first recruited the right people. Staff members recruited to the virtual office should be highly flexible and independent in their approach to work.

"I know that Stephen [van der Mye] always says that when he set out to recruit the staff at NEMMCO he had a view that he wanted the absolute best talent of all the people working in the electricity industry in the country," Price says. "If you start off with getting the right people you have absolute trust in, then I think that goes a long way to overcoming any cultural issues with the virtual office environment.

"You get comments like: ‘I'm really interested in this job but, if I'm going to work on the strategy, there will be times when I'll prefer to work from home. Is that a problem for NEMMCO?' Of course, the answer is no because they're exactly the sorts of people that we think it important for NEMMCO to have, who will appreciate the flexibility they're given but will be driven by the need to deliver a particular outcome."

NEMMCO is working hard to develop a culture of trust, both upwards and downwards within the organisation. Not only must bosses trust their employees, the employees must feel comfortable enough that they can actually do their work in their own environment. "The culture of trust from my perspective is the most important element," Price says.

When Price recruits staff, he is looking for self-starters who don't look like they'll need a lot of direction and who can communicate well and have a personality that disposes them to sharing information with others. However, organisations should also consider the issue of rewards and how to make known to new staff what they are expected to deliver. Price says NEMMCO has a performance manage-ment system that helps it to guide staff performance.

"Effective virtual team-building is very much an attitude thing and a cultural thing and therefore it's really important to have the right sort of people who feel comfortable with that interaction," Waterson says. "It is also clear that if you don't get that degree of support from the MD down, then it's very hard for others maybe two levels down in the structure to embrace some of these aspects if they feel they are not being supported.

"By that I mean people having the right cultural attitudes: that they're happy that people are going to be working remote from them, that they don't feel obligated to be looking over their shoulder every minute of the day. That is a particular management style that needs to be encouraged."

In that spirit, van der Mye has introduced an initiative called Employer of Choice, which involves considering all aspects of employment to ensure the organisation can continue to attract the best staff available, including by allowing people to work remotely from home.

"I mean we're a very generous organisation," Waterson laughs. "We had an example recently where someone had a medical problem and it meant they were stuck at home for a week. We know how boring it is being at home with no work to do, so they were actually able to come in via their cable modem connection and connect to the NEMMCO system. We're just full of joy and kindness all the time."

Barriers Remain

Significant barriers remain to having NEMMCO operate as effectively and efficiently as its directors would like. For instance, Waterson says no matter how effective the technology is, there will always be times when nothing can beat a face-to-face interaction. So NEMMCO still requires its people to travel to some extent between sites. There are just some things which are too difficult to do remotely, he says.

The organisation also encourages teams to meet regularly whenever a new staff member joins, to try to build a sense of team spirit. Of course, there will always be times when a problem or disaster demands attention, and that will often mean people jumping on a plane or organising a time for face-to-face interaction. "I think the other point is that there still remains a level of state-based parochialism in this country," Price says. "When you work for a national organisation in something like electricity - which is traditionally a state-based industry - there are still a few remaining barriers to be broken down in terms of physically being located in a particular state to deal with a particular issue which was traditionally dealt with at the state level."

Dealing with those attitudes and expectations can be difficult, he says. It involves educating participants to understand the changes that have occurred over the past five years in the structure of the electricity industry and making clear that the industry is now under a national set of rules and operates in a national context.

"I also think it involves recognising that, like a business, we need to get closer to our customers and to our clients," Price says. "We need to spend more time understanding what might be a concern to them and what's driving them. So again, there are initiatives under way to try and increase our interaction with our customers and to make sure we understand what's driving them." vMobile Roadblocks Top barriers to telecommuting success Manager Resistance and Mistrust: If managers aren't totally behind the program, they will eventually find a way to bring it to a halt.

Dumping-Ground Effect: If employees aren't trustworthy, reliable and productive at work, there's no reason why they would be at home.

Inadequate Technical Support: Just giving employees laptops and ISDN lines isn't enough. They need somewhere to go for help if something goes wrong - because it always does.

Culture Shock: Working at home often represents a cultural shift in the way people work. People need to be educated about how to set up home offices and stay in touch with co-workers.

No Face Time: Virtual team members need time to bond and overcome trust issues that are often exacerbated when communicating without visual cues.

Scalability: Telecommuting pilots usually work well on a small scale but can fall apart when rolled out across the enterprise.

False Economy: In the long run, companies save money by buying employees the equipment they need at the start, rather than skimping and doing it after the fact. - Jennifer Bresnahan

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