Managing a Virtual Workforce

These days, it's entirely possible to run a thriving business out of a dozen different cities, with no central office and minimal face time with employees.

Inc.com recently talked to four smart CEOs who have done away with traditional business formats in favour of online communications between employees, periodic productivity check-ins, and a lot more flexibility.

They shared lessons they've learned along the way, and pointers on how to make a virtual company grow and thrive. Their insights showcase forward thinking work practices and business models made possible by technology.

1. Trust Your Employees
"There's a lot of pressure to have an office, but if you can trust your employees and if you don't have a lot of physical stuff like prototypes, then it's a great model. You're going to save a bunch of money on real estate and it's going to be good for the environment, because you're not commuting, and you're not using an office. You can also live anywhere in the world. While I ran the company, I lived in India, Argentina and Thailand."
Graham Hill Founder, TreeHugger

2. Figure Out New Ways to Foster Personal Communication
"For most things we use P2, which is sort of like a private version of Twitter that we developed. The rest is over instant messaging and e-mail. Once a year, the entire company gets together in person. In some ways, seeing your co-workers once a year is better than seeing them every day, because if you're only going to see someone for a week, you try to be nice, even ifyou don't like him or her. We don't get the passive-aggressive stuff that builds in an office."
Matt Mullenweg Founder, Automattic

3. Come Up With a System to Track (and Improve) Productivity
"Every night, our employees open up a shared text file and write down anything they did that took more than a half an hour. Then, on Friday, we meet at 2 p.m. at someone's house and review what everyone accomplished and how it compares with what they said they were going to do. Anything that takes more than 10 minutes needs to be tabled until we meet in person. One of the great side effects of this system is that it causes people to sleep on things. And it causes us to focus on accomplishing things instead of talking about things."
Kevin Hale Co-founder, Infinity Box

4. Recognise Your Limits
"We've gotten too big to be a virtual company. By the end of the year, we'll have 100 employees in the U.S. and another 100 in India. Face-toface collaboration is essential when you want to get something done quickly in a large organisation. That said, I'm doing this reluctantly. Our people enjoy working virtually, and we want to maintain the culture that we built. We're still going to use all the technology we used before, and we're continuing to be flexible about work schedules. Some folks are expected to come into the office every day to collaborate. But if you want to leave at 3 o'clock to pick your kid up from school, I understand."
Mike Sappington CEO, gloStream