Not all ‘remote’ companies are the same. There are in fact two different configurations: remote companies and distributed companies. Together with local companies, these three configurations outline a continuum: depending on where a company is located in that continuum a different organization structure and growth is likely to unfold.

A local company has all the people sharing the same physical space and interacting in person. All the discussions can happen easily face to face. This is the classical office where people commute to, everyone is there for a number of hours each day, people can have in person meetings, they can chat at the coffee machine, and they can have lunch together.

A remote company has one (or more) central offices exactly like a local company has, but there are also people that aren’t physically present and they collaborate digitally from somewhere else. Often the key decision makers in the company are invited or required to be present in the central office, at least to a certain extent. It’s called “remote” because there’s a central hub to be remote from.

A distributed company has no central office, and in fact often doesn’t have any offices at all. People are all connected and collaborate using digital tools, and they have the flexibility to decide where they are as long as there’s a stable internet connection. The key decision makers are distributed as everyone else.

	Local	Remote	Distributed
Decisions	Close by	Central office	Everywhere
Comms	Usually sync	Tension sync-async	Usually async
Comm tools	largely in person	some in person, some digitally mediated	always digitally mediated
Tiers	no divisions, everyone local	local people, remote people	no divisions, everyone is remote

The in-between of remote companies is the hardest

A remote company is in the hardest of the possible configurations. The reason is that having the workforce split between local and remote creates inherently two tiers of people, and it’s something that needs to be actively balanced against.

This might not be immediately evident, but there’s a cumulative effect of all the interactions that happen between people in the “gaps” between work. Bumping in someone in a corridor, having a quick recap in person, going to someone’s desktop, seeing someone struggling and going to them to help, turning to a nearby colleague for a clarification. All these channels are not just lost to someone remote, they are completely invisible.

Not to mention that personal and social bounds created in such conditions will improve the trust between people and thus will make them to more easily think of them — thinking of a person to ask a question? thinking of the right person for a project? thinking of a promotion? — it will make easier for people to just be in each other’s mind.

The most evident scenario is when a decision is taken in a meeting, and it doesn’t get shared in a digital channel within a few days, if it gets written at all. This clearly put every remote person at a structural disadvantage. This impact not just the productivity, but also the morale.

This is of course even more extreme if the decision makers — managers, VPs, CxOs — are all in the office, as it becomes not just easier to get in touch with them, but it’s also easier to be seen and to progress one’s own career.

Large Companies are De-Facto Remote

We usually associate the idea of having an office as being a local company. This is true, but only for small companies. Once a business grows beyond the single office, floor, building, city, country… the company isn’t local anymore: it’s a remote company. Every person in the company that isn’t in line of sight or reachable with a short walk can be considered remote from you.

This is one of the main reasons of the “growth pains” of companies: once the number of employees start growing, one can’t effectively communicate anymore in the old “local office way”. New systems need to be put in place to deal with the people that are farther and farther away. And that’s hard now, because changing the behaviour of hundreds of employees requires careful change management. The illusion of locality exists because everyone is still in an office, so often growing companies realize the issues a bit too late.

This is also one of the natural reasons for silos to create. People still behave like they need to interact locally, but that isn’t the case anymore. Every group now is unknowingly isolating themselves, reinforcing local relationships and weakening or dissolving remote ones. This means that proper change management here won’t just mean putting in place the right communication tools and practices, but also will require an active intervention to reverse that effect on the relationships, otherwise people will just replicate them inside the new tool, replicating the silos.

Benefits of Scaling Distributed

Distributed companies are the easiest to scale, because they needed to setup on day one all the systems and practices to make people discuss and collaborate. It’s easy to set this up when there are less than ten people. There’s lot of space to experiment, try things out, and evolve naturally over time as new people join the company.

This happens so naturally that doesn’t almost require any extra effort. People will bring up issues and also solutions — because they want to work better. It’s important to be flexible enough to allow this flow of small, constant changes to happen.

In distributed companies, people tend to learn the benefits of asynchronous communication early. By valuing people’s flexibility, people tend to understand that it’s less useful to have calls and meetings, also because someone will have to transcribe any decision regardless. Which means that most things can happen asynchronously, often in text format — which incidentally is also more accessible — and calls are left only for the things that can’t be dealt otherwise.

With this, distributed companies never face certain issues while growing, there’s less natural siloing and no discontinuity caused by the necessity to introduce new practices. They will just naturally grow one person after another. There will still be issues — the design of a 5 people organization is very different from the design of a 1,000 company organization — but they are of different kinds, more on the human and processes side of things.