Over the last year I’ve been consulting with a company whose founders are spread throughout the country – one on the west coast, one in Colorado, one in Texas.  With a phone and internet connection, what could be the problem?  As I’ve discovered, – plenty.  When people aren’t face-to-face on a regular basis, the quality of the relationship erodes and the productivity of the work declines.  There is something about being able to pop your head in someone’s office to share a recent success, or brainstorm new ideas around a table that results in happier, loyal employees which in turn results in greater sales and profitability.

Being in separate locations also has its’ challenges in terms of training and managing employees.  When you combine a remote location with a bad hiring decision, it WILL be a recipe for disaster.  This is amply illustrated on the story of Marilynn Mobley, the founder of Acorn Consulting Group.

Marilynn founded Acorn after 20 successful years as a professional communicator. Because of the kind of results she achieved, she soon had more companies asking for her services than she could accommodate.

Her idea was simple and sound enough on paper – hire someone with appropriate background, pay a solid salary, avoid the overhead of office space by having them work from home, have that person provide the same service to clients Marilynn provided, and bill that person’s work out to clients at about three times the employee’s annual salary, the standard billing rate/salary ratio in the public relations industry.  It would be a great way to build her business, make her clients happy, and increase her profits.

Marilynn had just the person in mind.  She had worked with Katie (*) at IBM and had been impressed with her skills and professionalism.  She set Katie up in a virtual office in her home, matched her IBM salary, and off they went.

Within six months, a pattern had emerged. Clients were complaining about Katie’s lack of response. Plans were not being executed.

The absence of discipline was showing through the empty promises and the façade of competence. Katie gave Marilynn reassurance that she would bring more discipline to her work.

Weeks dragged on – Katie didn’t follow through with that promise either. Marilyn kept trying to rectify the situation.  In doing so, she sacrificed service to her existing clients and thus saw further damage to her reputation. The financial drain was so bad that Marilynn stopped paying herself a salary for four months. Katie never missed a paycheck.

Finally, after one year and numerous attempts to jumpstart her virtual employee, Marilynn realized she had to cut her losses.

Some people have the entrepreneurial spirit, some don’t. It can be learned and nurtured, but only if the seed exists. Marilynn made it too easy for Katie. She took Katie from her 9-to-5 corporate world – with its safety nets and guaranteed salary – and expected the kind of self-discipline and aggression that enterprising people who work without a net bring to the ring.

“Katie was never hungry,” Marilynn says.  “She got her paycheck every two weeks. She didn’t know what it was like to go without one. Because we weren’t in the same office, it took me way longer to realize this then it should have.”

My client has had similar results.  The West Coast employee (who is also an owner of the company) is constantly complaining that she isn’t getting her work done because she is already working all the time and she’s incredibly far behind.  Because the team isn’t with her in the same location to see if she really is working all of the time or just incompetent, frustration, anger, and inefficiency built to the point where the company imploded and they ended up prematurely selling the company.

After observing the challenges my client has faced, I would personally never start a business where the founders and employees are not close enough to meet on a regular basis.  Human connection and communication is the key to a thriving, successful business.

(*) Name has been changed