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Thank you so much for joining us today as we kick off the distributed teams track at RailsConf. My name is Maria Gutierrez, and I am the VP of Engineering at FreeAgent. For over ten years, we have been building accounting software using Ruby on Rails that puts freelancers and small businesses in control of their finances. Our head office is in beautiful Edinburgh, Scotland, but about 25% of our engineering team works from home in other parts of the UK.
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I'm Glenn Vanderburg, VP of Engineering at First, where we use predictive analytics and Rails to help real estate agents make more effective use of their marketing time and dollars. Our company is located in Durham, North Carolina, but I work from home in Dallas. About a third of our company works remotely.
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The two of us recently spent five years as colleagues helping to manage a large widely distributed software development team at LivingSocial. LivingSocial started with offices in Washington, DC, which was our head office, but it grew and opened engineering offices in Boulder and Portland. Still, the majority of the engineering team, which grew to about 200 people at one point, was working from home all over the US, but also in the UK, Mexico, Brazil, and eventually, China, India, and Australia.
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Between us, we've been part of several distributed teams for the past eleven years, including today at FreeAgent and First. While working together at LivingSocial, we found that we shared a passion for understanding how to do distributed teams well. We're strong advocates for such teams, and we both believe that the distributed teams we've been a part of have been some of the best teams we've ever experienced.
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However, when we say things like that, a lot of people seem to hear things like, 'We’ll hire some senior engineers, and we’ll figure it out' or 'distributed teams are just as good as co-located teams in exactly the same ways' or 'it'll be easy.' None of those statements are true, and they don't have to be true for distributed teams to be a good idea.
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There are also plenty of people who think distributed teams are a bad idea, making statements that misunderstand the dynamics of distributed work. From executives at Zaarly, IBM, and Yahoo, we believe those statements miss the point that distributed teams have their own distinct benefits.
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What we see is a lack of willingness or commitment to do what's needed to succeed in distributed environments and that it’s okay if that's how a company chooses to operate. One size does not fit all, and we recognize that today we will discuss some lessons we've learned over the years. We've made a lot of mistakes along the way, and whether you are an engineer, a manager, or a senior leader in your company, we hope this talk will help you avoid repeating some of those mistakes.
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We will help you take advantage of the benefits that distributed teams provide and help avoid what happened at some companies, like IBM, where they built a distributed team only to later retract that benefit.
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If you are an engineer or an individual contributor, some of these concepts might not seem immediately applicable to you, but as a remote team member, you bear some responsibility for making a distributed team successful through your own behavior. You can influence your management and help them understand the challenges they are facing. If you are searching for a new remote position, you can ask the right questions to find a team that is set up for success.
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Part One: Make a Commitment. Choosing this path requires commitment; half-hearted efforts will result in a worse experience rather than a better one. Company leadership has to support a distributed team strategy. In this section, we'll talk about things that will test a team’s commitment and provide solutions we've found so that you will be prepared when starting this journey and facing challenges when your strategy is questioned.
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You start by investing in the basics, and the biggest basic is organizational culture. But how do you build company culture when you are not working side-by-side? A lot of people ask this question, and many are skeptical, but distributed teams can indeed have a great culture, albeit in a different way. The culture is not defined by the physical space you occupy or who you share it with. The space contributes to the team environment, but it does not build a good culture.
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We have amazing offices at FreeAgent, but that isn’t what creates good culture for us. You can have the best offices and people working close together, yet still have a toxic culture. To us, culture is about people, shared goals, common values, and mutual respect. It involves caring about your customers' success and caring about the success of your colleagues.
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In fact, the two companies with which we've worked that had the strongest cultures both fully embraced distributed teams. In LivingSocial, their culture furthered the agility of the team. Most of the people we used to work with are still in touch every single day, supporting and caring for each other long after they’ve left the company. Another basic commitment is investing in the best tools your company can afford. Better tools make communication easier.
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Some simple things can lead to significant payoffs: good computers with quality cameras, headsets, and intuitive communication software for chat, video, documentation, etc. Start with those and pay attention to how well those tools meet your needs. Ensure everyone who needs them has access while also helping those who face difficulties.
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For instance, if your engineering team has access to Slack and JIRA but no one else in the business does, collaboration will be difficult. At FreeAgent, every person in the company uses the same tools. Consider that case when making tool choices. For example, remote pairing using SSH and Tmux works great for us nerds but isolates less technical team members like product managers and designers.
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A tool like Screenhero can be more inclusive. You need a critical mass of remote developers; if you only have one or two remote people on a larger team, it builds friction and resentment due to perceived special treatment. If you don’t have a critical mass of remote people, they won’t have a sufficient voice in the culture-building process.
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What constitutes a critical mass? Is it a quarter of the team, a third, or even half? The proper threshold will vary from team to team and will fluctuate as you make significant changes in work practices and habits. Perhaps it won't be as critical to have many remote people once those changes occur.
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But here's the rule: as long as remote team members feel like second-class citizens, your balance is off. It doesn't take senior leadership to influence that situation. You can start by helping to eliminate the us-versus-them attitudes between locals and remote workers, and terminology plays a significant role in this.
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The terms 'remote' and 'local' are alienating and emphasize the distance and difference. Instead, we began using the term 'distributed,' which levels the playing field. Some significant breakthroughs at LivingSocial came when individual contributors adopted this more inclusive language.
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It’s also quite beneficial to have managers and technical leads who work full-time from home so that management understands the issues firsthand, and there isn’t a perceived glass ceiling for remote workers—at least, it should be very high. If employees feel that their location is a barrier to career advancement, they will likely leave when you need them most.
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So, everyone in this picture—Derek in Dallas, Evan in L.A., and myself in Scotland—started as engineers and moved into senior leadership positions while working full-time from home all over the world.
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Likewise, those in DC, like our VP of Engineering, Ryan Owens, also worked some days from home. I got this picture from one of the Engineering All Hands meetings he hosted from his home office with his amazing bobblehead collection. This practice demonstrates that working from home does not impede career growth.
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However, even today when I propose engineers be promoted to team leads, a big question arises: is that possible given they work from home? It should not be an impediment if the right support and commitment are in place.
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Culture grows through shared experiences. Thus, it is vital for even office-based employees to work from home occasionally, especially on days with meetings, to have the same experience as their home-based colleagues.
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Ultimately, the whole team needs to operate in the same style, regardless of whether they are local or remote. This is another area where individual team members helped shape the LivingSocial culture by choosing to work in ways that were beneficial for everyone.
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Additionally, it is crucial to bring the team together face-to-face. However, resist the temptation to maximize productivity during this time. The best use of face time for a distributed team is to foster relationships, which improves empathy and communication, ultimately making the team more productive later on.
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It's important to treat remote employees fairly, even if they cannot be treated equally. Each group has unique perks and challenges; as a manager, you need to be vigilant to avoid any policies or practices that favor one group over another.
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As a team member, it's important to appreciate the unique benefits of your situation. Sometimes we focus more on what we are missing rather than acknowledging our own privileges.
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For instance, one of my team members, based on the West Coast, was annoyed about attending a meeting at 7 AM his time. He had to realize that while his commute was from upstairs to downstairs, others across the country were dealing with much harsher realities.
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Another important aspect involves making significant decisions in settings where all stakeholders can voice their opinions. A local lunch spot might not be the best place for a strategy meeting, as it may leave out contributions from remote members.
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But still, there should be social aspects for the team to thrive, and remote employees can find ways to engage in social events. At FreeAgent, we have 'Wednesday Remote Coffee,' where team members can gather, enjoy connection, and chat.
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During Health and Well-being Month, we have sessions specifically addressing the challenges remote employees face to maintain well-being. A key point is that in a distributed team, communication doesn’t just happen naturally; it takes intentional effort.
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People are excellent at communicating face-to-face in ways that become automatic, such as noticing facial expressions and body language.
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However, on a distributed team, you must consciously plan for significant changes and decisions to be communicated widely and repeatedly. You should also create opportunities for casual, serendipitous communication to occur.
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This extra communication effort is beneficial, as co-located teams also face problems with implicit communication. Important decisions might often overlook crucial stakeholders or lack sufficient clarity.
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Every team can benefit from being more deliberate in their communication patterns; it is vital in a support team because that’s how we get our work done.
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Additionally, communication builds trust within a team, and without trust, a team cannot succeed. Patrick Lencioni identifies the absence of trust as a primary issue for dysfunctional teams.
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When we trust each other, we embrace vulnerability, which allows us to share our mistakes, ask for help, and tap into each other's experiences more freely.
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A blame-free culture is crucial, ultimately leading to better decisions and improved solutions for our customers. Trusting your team makes you feel accepted and comfortable, increasing your job satisfaction.
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As a manager trying to build a cohesive team, or as a remote employee, most efforts should focus on developing trust, which is essential across all levels and direction of the team.
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One way to build trust is through regular 1-on-1 meetings. This creates opportunities for everyone to know each other better, discussing interests, aspirations, and concerns. This helps identify cues about team happiness or issues that might need addressing.
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As remote workers, it’s easy to miss these cues, but active engagement and frequent communication help mitigate this issue. It is everyone's responsibility, not just managers’, to ensure the entire team succeeds.
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Out of sight should never mean out of mind. We need to maintain presence in people's thoughts, hopes, and without unnecessary stress.
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We discussed committing to superior tools, but internet-based audio and video tools can pose challenges. Learn your team’s tools well to ensure meetings run smoothly; remote participants should not feel like an afterthought.
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Whenever possible, opt for video over audio-only conversations. A video call adds personality and helps geographically separated individuals connect better.
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In meetings where some participants are physically together, video is even more beneficial as it helps remote participants connect faces with names.
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Additionally, using a video can make the meeting flow easier to understand by showing who is engaging with whom.
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Think of communication tools along three axes: synchronous vs. asynchronous, low bandwidth vs. high (text vs. video), and persistent vs. ephemeral. Each tool works best based on its positioning along these axes.
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Remember that when you're exploring new ideas, it's best to communicate fluidly in real time—using video conferences or in-person meetings when possible.
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For questions that need quick answers, use a group chat instead of interrupting someone’s conversation, allowing others who may benefit from the answer to see it.
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For important decisions, leverage persistent, searchable text-based channels to maximize message reach and minimize ambiguity, possibly while supplementing with recorded or video announcements.
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Time zone discrepancies and various work schedules can complicate meeting setups. Time zones can be more challenging than distance for distributed teams.
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When possible, create teams with time zone compatibility that allows for at least three to four hours of overlap during the workday. However, time zone differences can have advantages too.
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At LivingSocial, we benefited from around-the-clock coverage, with team members in Europe and Australia saving many of us engineers while problems arose during night shifts.
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Develop skills in less synchronous communication, like writing and circulating proposals for review, and requesting feedback. This can improve team effectiveness while reducing time spent in meetings.
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Showing your work is another way to foster trust. Communicating effectively in writing is crucial in distributed teams. The opportunity to engage in stand-ups and retrospectives still exists, even remotely.
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Creativity can bridge the gaps left by tools that let us down. Team gatherings are pivotal to developing relationships among members in a distributed context.
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At LivingSocial, our team setup was incredible for fostering an inclusive culture. Events like demos included guest DJs that kept us all updated while engaging in fun together.
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If a distributed conference can successfully incorporate fun aspects through video calls, there are no limits to what can be achieved otherwise. Make showcases memorable and enjoyable for everyone.
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Part Three: Be Clear. Even if you adopt the above aspects, problems may still arise if your team does not understand how to work effectively as a distributed team. If you’re a leader, it's your job to provide clarity.
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When clarity exists about goals and plans, the team will help make it work. If you are not a leader, don't hesitate to ask for clarity on these topics. Several areas require explicit expectations set by team leadership.
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The first area concerns how work is measured and evaluated. One of the benefits of distributed teams is that managers must learn to evaluate productivity based on actual results rather than perceptions of busyness.
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Set explicit expectations around work evaluation and regularly review them. In organizations that are not fully distributed, there may be roles requiring physical office presence.
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If so, leaders need to be upfront and clear about this. Whether it's senior executive roles or junior entry-level positions, it's essential to clarify this before hiring.
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For instance, if senior engineers need to be in the office to mentor junior employees, it's crucial to understand what is the point of involving junior staff in an office setting if there is no senior support.
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There may also be specific roles that require intense collaboration with team members who may not be managerially equipped for distributed work. Generally, engineering must interact regularly with the rest of the company.
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Understanding potential hiring challenges based on position location (state or country) is also critical. Not knowing employment laws, intellectual property rights, or tax regulations can lead to future issues.
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For larger corporations, this might not be a big issue due to established legal departments. Still, it can become a costly problem for smaller businesses and could be a flagged risk during investment rounds or IPOs.
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Consequently, it’s important to consider the implications of hiring from regions you haven’t previously engaged with. The same goes for budget management.
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If you're managing the team budget, have a clear understanding of costs associated with having a distributed team. How will you budget for tools? Managing costs for five people is different from budgeting for 200.
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Be prepared to invest as much as possible in the best tools to guarantee effective communication—it can become costly. What about home office setups? Will you cover those expenses, or co-working spaces? There is no one-size-fits-all answer, but teams should prepare.
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Most importantly, travel for face-to-face interactions can become quite expensive. While this isn't an issue for a small team, it becomes more complicated when 200 engineers need to be in one location.
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Budgeting for such expenses is critical as it can present challenges during periods of financial stress. Having a budget per person can help mitigate impacts during strategic cuts.
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It's wise to set a budget for a set number of trips to the head office each year, usually at least four. Allocate that budget to the employee’s cost rather than the travel.
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This way, if the travel budget is cut, it won't impact the employee's costs and remote hires can still get essential face-to-face time.
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Also, thoughtfully approach salary strategies based on location. There is no perfect formula; consider your best approach. I prefer a baseline salary with location-based adjustments.
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For example, an expensive location like London may warrant a 20% premium compared to salaries in Edinburgh. This adjustment is vital in equitable pay.
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Be diligent in your hiring process and set clear expectations proactively so candidates are fully aware of their commitments. Ask how performance is managed, who can work remotely, and if there are roles unsuited for working from home.
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It's also vital to ask if moving between states or countries would affect compensation or if others in the same geographical location are employed.
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Lastly, clarify tools used for retrospectives or team meetings, and whether remote team members participate fully in those practices. Seek clarity during the recruiting process to ensure you understand what you're signing up for.
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We've discussed many of the challenges you'll face when operating within distributed teams, but as fans of this structure, we want to end on a positive note by sharing what we love about such teams.
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At LivingSocial, we built a highly talented team that grew from 12 to over 100 engineers in less than a year, largely due to our ability to cast a wide geographic net.
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A distributed team strategy can provide significant competitive advantages, especially for companies outside tech hubs, and can still produce benefits in major tech cities by reducing costs even with travel expenses.
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Crucially, distributed teams also serve to enhance retention rates, which proved advantageous during economic downturns. We faced layoffs, but having diverse teams dispersed across locations helped alleviate the burdens associated with concentrating skill sets within specific markets.
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Remote working skills often help team members secure new opportunities more easily; thus, distributed teams can offer support during transitions.
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An underappreciated benefit of distributed teams is how they ease organizational change. Once everyone operates in a distributed style, adapting to team structures based on the work becomes easier. It increases organizational flexibility.
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This ties into Conway's Law, which, while a constraint, can also be used as an organizational tool. However, care must be taken not to treat employees as interchangeable parts.
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Nonetheless, improved organizational flexibility is one advantage of distributed teams. Another significant positive is the need for thoughtful communication.
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Everyone benefits from considering their communication patterns more deeply. The effort invested in a distributed team results in overall improvements in the broader organization.
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Lastly, a distributed team strategy helps build a more diverse and engaged workforce as long as geographical or other barriers aren't mismanaged.
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It is not a silver bullet, but it can certainly be a powerful tool that removes barriers while providing the necessary flexibility for those who need it.”},{
