Contracts of virtual collaboration in Grundfos

How to create the optimal foundation for virtual teamwork? How do I as a manage, ensure that I have considered the essential frameworks of the virtual collaboration? How do I encourage commitment and alignment within my virtual teams?

Get an insight into how Grundfos uses contracts of virtual collaboration in its work with virtual teams.

With an annual growth of almost 10% , Grundfos has been expanding its market share in Europe, the USA and Asia. Therefore the need for strong distance management/virtual leadership is vital. This change can be seen in particular within the development of new products.

Christian Brix Jacobsen, Director of Mechanical Hydraulic Develpment, explains: ”When we  create products for different markets, it is important to have locally situated departments. For example, there are different legal conditions in the USA, Europe and China. But there are also cultural differences that lead to very different opinions about how things should be run. Therefore we have local departments across the continents”.

Christian Brix Jacobsen is the leader of a new department which consists of 80 employees, and a new virtual management group comprising two Chinese, one American and three Danish managers. Christian is very much aware of the importance of establishing a common foundation and ensuring that there is a mutual understanding of the virtual cooperation requirements.

The first joint action was planned in collaboration with CfL as a two-day kick-off meeting for the management team. ”Many of these people have never seen or met each other before, so it is important that we can create a mutual platform. We are to work with a mutual management foundation – Grundfos’ socalled Leadership Principles, but it is equally important to establish some very specific frameworks for our virtual collaboration. ”How is it going to work in practice, and what expectations  do we have of each other”, says Christian Brix Jacobsen.

One major outcome of the meeting was the design of a “Contract of virtual collaboration” - a cooperation agreement between the managers in the team.

When it comes to virtual leadership, there are some very specific factors that need to be in place in relation to communication across time zones, cultural differences, the use of virtual media, as well as the consideration of personal needs and values. Things that are vaguely formulated often lead to misunderstandings, unnecessary coordination and frustration amoung employees and managers. Contracts require that we define the expectations we have for cooperation and that during the collaboration, these expectations can be modified and revised. Contracts also create soft parameters for the expectations of issues of inclusiveness, continuity and openness. The purpose of the contract is to create a foundation for daily cooperation and to ensure that decisions can be made swiftly and in accordance with the given aims and requirements.

”The contract outlines our aims and objectives for our department as a whole, as well as for our management team. We considered what we were responsible for and wrote it down in the contract. The specific agreements were also noted down: What are we working towards, and how do we wish to reach our goals in practice? We ended up planning a weekly meeting every Wednesday at 2PM Danish time, on the basis that we are 7 hours off from both the American and Chinese time zone. We arranged the meeting to last for an hour so as to allow people to plan around it” says Christian Brix Jacobsen.

An essential element of the cooperation between CFL and Grundfos is to acquire knowledge and experience. These experiences will then be used to further develop Grundfos’ virtual teams. Here, the intention is that virtual managers at Grundfos can be trained in developing leadership at a distance, and also discussing and evaluating the experiences that are created along the way.

CfL is closely following the development of the virtual teams. At a time when goals, tasks, structures and management styles are in constant change, not just at Grundfros but everywhere in the business world, it is extremely important to create as favourable conditons as possible for employees’ task performance and job satisfaction.

We therefore call on other virtual managers to make use of contracts of collaboration, as it is not only an essential tool for providing a necessary foundation for daily cooperation;  but it also emphasises the collaboration needed for virtual teamwork - the responsibility lies with both the managers and the individual employee. As an employee at a distance, one must for better or worse redefine the concept of visual leadership.

Facts about the project

Despite the recession Grundfos has achieved increased revenue returns and market share gains, and with a constant focus on development it is in the process of creating a brand new R & D setup to help the company adapt to the large growth.

Cooperation between Grundfos and CfL is a project between research, industry and CfL. PhD student Rikke Lindekilde receives guidance from the Department of Business Administration at Aarhus University. The key participants from Grundfos are  Jimm Feldborg, Project Director, and Global Product Line Director -- Kenth Nielsen and from the Poul Due Jensen Academy by Gunnar Tindborg, while HR is represented by HR partner Marianne Grønhøj.