Virtual Office Management Means Effective Communication Try these helpful strategies and software to better manage employees from afar.

Bob Dylan had it right when he penned his lyrics "The times, they are a-changing." In today's highly competitive world, if entrepreneurs don't catch up or keep up with the latest advances in technology and management, they're doomed to fall behind.

A smart move that can save entrepreneurs money--and at the same time implement the latest in technology and management resources--is the virtual office. Very simply, a virtual office is one where employees may no longer be housed on site; in fact, they could be spread across the U.S. or even the world.

The term "virtual conversations" illustrates the idea perfectly--conversations that take place via instant messaging or on social networking sites such as Facebook, MySpace and chat rooms.

In a virtual office, employees work out of their own homes, a rented office space or a larger, shared office building.

The virtual office contains a computer, printer and fax machine, among other equipment. Often the computers have webcams which allow video conferencing.

For meetings, many employees use software such as GoToMeeting that enables them to see each others' computer screens without leaving their own desks, even if the meeting is taking place thousands of miles away. This way, an individual can work with others and actually share their screen. This helps members linked in to the meeting to view slides or software from various sites. Webinars use this process to reach out to a large number of participants at the same time. In Webinars, meeting attendees can also use their telephones to talk to the presenter or moderator and sometimes to each other. The cost of this equipment is more than offset by the savings realized by not having to pay travel expenses, site rentals or office space rent.

What do virtual employees like about this system? Sharyn Katz, accounting manager for Boston Software Systems Inc., in Sherborn, Mass., says, "I enjoy the independence and freedom of being able to set my own workflow based on the company's needs and priorities."

Certainly, she must be prepared to "deliver the goods" when her boss needs them, but she has a great deal of leeway when creating her own schedule. Others say they enjoy not having to report to an office on a regular basis. They can work from their own home or another space. In fact, they can be wherever they like--a client's office, the library, the coffee shop, the beach--wherever they feel content and most productive.

Other employees say they enjoy being almost totally responsible for themselves with no boss or supervisor hanging around their desk, looking over their shoulder or pressuring them for work results. Many employees who prefer the independence of working alone in a virtual environment say they're spared the bother, distraction and negative office politics found in the traditional office setting.

Deb Beck and Dave Linde, principals of Studio 18 Group in Wellesley, Mass., both say they've benefited from gaining strategic management clients from throughout the U.S. They've accomplished this not through face-to-face business development meetings, but rather by using electronic tools to increase their client base. Finally, virtual employees are spared the expense, frustrations and time loss commuting to a traditional office location.

Along with these positive features obviously come negative ones. The chief complaint most virtual employees mention is social isolation. There's no water cooler or "coffee klatch" for a casual exchange of comments, work-related or not. They can't simply walk down the corridor to chat with a colleague, even for a few minutes.

For these staff members, seeing other employees on a computer or video conferencing screen simply does not replace personal contact. As for time off, those without firm personal or professional boundaries can end up spending much of their non-work hours back at their desk, pounding out more work and forgetting about the importance of work-life balance.

Another drawback is that it's too easy to start work late, run an errand or find a distraction rather than doing one's work. Frequently, these behaviors are a means of compensating for the lack of having other people to interact with.

A further disadvantage of a virtual office when compared to a traditional one is that in a conventional office, if employees need additional guidance or direction on a project or task, they can simply walk down the hall to speak with someone. In the virtual office, it sometimes takes more time to get information, especially when the key person, or an alternate, isn't available.

Given these positive and negative factors, what caveats exist for the effective entrepreneur who wants to create a virtual office?

First, hire the right people. This is true in any company, but even more so in the virtual one. Deb Beck of Studio 18 Group says that successful virtual employees are "self-starters and self-disciplined--it's definitely lonely working in a vacuum, and they need to be able to deal with this." Katz echoes Beck, saying that effective virtual employees, "need to connect with other outside communities," not just the virtual work environment they're in.

The virtual leader needs to have the utmost trust in new hires. The leader will not physically see or interact with employees as easily as in a traditional company. Therefore, business owners in these settings must have an extremely high level of confidence in their employees. Employees need to be exceedingly self-reliant and committed to the task and the organization; self-motivated to work independently and without much supervision; and dedicated to the success of their work. Productivity, self-efficiency and autonomy are essential.

Even though virtual employees need to be self-reliant and self-directed, the effective virtual entrepreneur needs to set realistic benchmarks and check-in times. To be able to manage someone from a remote location you must have some type of criteria to measure progress and success; e.g., total contacts made or total widgets produced. Some leaders reserve a particular time of the day or week for call-ins or staff meetings, using GoToMeeting or video-conferencing products.

Communication needs to be sufficient, frequent and intense enough to satisfy both the employer and the employee. Many set interim deadlines for projects so there are no surprises or gaps. Some, like Boston Software Systems, Inc., organize regional or national retreats once or twice a year. The purpose of these get-togethers is varied: opportunities for social interaction with employees who may never have met or who need to get to know each other; management and productivity purposes to discuss and improve processes, policies and procedures; information sharing; and creating a sense of unity, team building and esprit de corps.

A virtual office in this era of cost-cutting can save you a great deal of money. However, the prospective virtual entrepreneur needs to enter into this state-of-the-art management concept with goals of hiring the most appropriate employees and creating a fail-safe process.