Manuel Pistner of Flash Hub – Successfully managing virtual teams
February 6, 2020
About Flash Hub and Bright Solutions
Derek Gallimore interviews Manuel Pistner of Flash Hub and Bright Solutions, two companies that offer fully managed virtual teams. Bright Solutions have a roster of local talents while Flash Hub has an offshore offering.
Like in other companies, Manuel had a rough start when it comes to hiring teams for his projects. However, he learned to properly manage them over time. This inspired him to create his second company, Flash Hub. Learn how he did this and what are the factors in managing a virtual team successfully.
Manuel Pistner: What I did was I started as an entrepreneur in 2006. I started as a freelancer in software development than I ever dreamed of having my own business. I started my own business in 2011 and I’ve grown it as an agency focusing on web and app development. I’ve grown this agency to 43 people until the end of 2017.
I realized that the dream was not that shiny and bright than I ever hoped because the pressure was increasing continuously. The pressure was increasing because it was so hard to find local people that work in your office, that are experts.
On the other side, it’s so hard to deal with ever-increasing complexity in digital projects. What I realized is that in my agency, I always have either too many projects or too many people and that was huge pressure. That led me to a situation where I had one project that was almost about to fail.
It really crashed on my desk where we had to migrate 8000 web pages. I tried this with a local team with local partners, nearshoring with an agency, and with an offshoring agency, then everything failed.
I was highly disappointed because I had an account manager. This person always promised me everything and made me feel well. I had no transparency what’s happening behind and no control about those people that he employed for my project.
All of a sudden, in the first case with this nearshoring company, they cancelled my project three and a half weeks before the deadline. In the case of this offshoring company, they cancelled it one day before the deadline and I was highly disappointed. I had no idea how to save this project and my company.
Then I read studies about virtual teams that were issued by Stanford University. They’re called flash organizations and flash teams and another one called dream teams. They described how organizations can leverage global freelancers and organize them in virtual teams or organizations to get a huge amount of workloads done in a short time or even to scale a workforce for complex projects like Scrum project, software development, etc.
Then, there have been lucky things because I found a project manager that knew other recruiters. I found them on the freelance talent platform and they were able to staff me a virtual team within one day, 23 freelancers from all around the globe. The exciting thing is that everyone committed to working 14 hours every day even over the weekend.
Instead of feeling helpless and frustrated in having no transparency and control the first time, I realized that there are people all around the globe that can really help me when I need them. They are there whenever I need them, I can scale with them. They were happy to do this job because they decided by themselves if they wanted this kind of work or not.
With this system, I was able to deliver my project to the client on Monday after four days and everything was saved. At this point, I realized that work and my agency can be different and will be different. So I started to rebuild everything. I had to fire 20 people and 10 left by themselves.
Right now we are only 12, but we can do any kind of complex projects with any technology from marketing to software development, and whatever comes because we can find the right people from anywhere in the world and compose them to a virtual team that does this project or regular operations.
This was the story of Bright Solutions. From this experience, I founded Flash Hub because I want to help other organizations to scale systematically and reliably with virtual teams, avoid this experience that I had in a negative way, and have this positive experience of work without limits, no local restrictions and limitations of their workforce, and scale. That’s my experience that I had in the last three years.
Having transparency and controlling outcomes
Derek Gallimore: It’s incredible, isn’t it? Obviously, we talk a lot about offshoring and outsourcing in this podcast and you are bringing a different angle, a different service to the table. It’s about creating teams that can get work done as needed when needed.
It’s just as we see technology and the workforce economy develop, there are many different opportunities for managing your teams and your resources. It’s no surprise that you found the solution for your Bright Solutions issue.
Then, it seems that you’ve done an incredible pivot and completely sold on this because it’s the power of these services, isn’t it? They’re just almost life-changing, and you want to get that out into the community and tell more people about it?
Manuel Pistner: Absolutely. And I realized that it’s not offshoring or nearshoring, or agencies that deliver poor performance. I don’t want to put a negative spotlight on these, but where I want to be aware of is that you need to make sure that you have transparency and control.
You don’t have to transparency and control if there is a single point of failure, like one person that managed everything for you, and just has the job to make you feel well and sell those people in the background that are right now available, and this is not what I needed.
That was the real problem that I had. Nowadays I realized that it doesn’t matter if you have people offshore, nearshore, freelancers, or locally. You need to create a proper system that is transparent and gives you control about what happens.
I’m not talking about controlling people. I’m talking about controlling the outcomes, the results. That’s what gives you the power to control your organization and your workforce.
Derek Gallimore: It’s critically important, isn’t it? Because it’s not just about having bums on seats. As I say, it’s not just about having people; it’s about getting those people up to skill, having them do or capable of doing the tasks that you need, and then having the processes in place so that they are effectively carrying out those tasks.
Is that right? is that what Flash Hub does, effectively create these systems and structures that enable companies to access resources that they wouldn’t necessarily know how to access themselves?
Manuel Pistner: Yeah, it’s not only the access, because you can get people from different platforms like Upwork, Fiverr, Guru, and Freelancer.com. You can get people dedicated as nearshoring teams as offshoring teams. Getting people is currently served by providers like you are and they do that well and I can’t do this better.
But what I can help organizations with, and that’s what we are doing with Flash Hub, is to provide them with the right tools and structures and change the way how they work so that they can leverage this global workforce. This is what we are doing with Flash Hub.
Derek Gallimore: The remote thing has been happening a while now, this decentralized workforces and virtual teams. What do you see as being the issue why and this isn’t being more universally embraced by companies?
Manuel Pistner: Because they are used to the old way. I mean, they are used to work how they work since the last like 50 or even 100 years. They think work can only be successful when they have their workforce that they can see and control physically.
That’s why so many people commute from one city to another, like one or even two hours every day just to go to an office, sit there at the computer and then do work. This computer, they basically have in their pocket with their smartphone or even at home, twice in most households.
From my perspective, there is no sense anymore working as most organizations work today. We have the technology and everything that helps us to work differently. We just don’t use it in the right way.
We still ask our people to come to the office every day because managers, they need to feel control. If they have a distributed workforce and that happens from one day to another, they simply lose control or they feel as they would lose control.
Most organizations are highly hierarchical still and work not in an in a real agile and cooperative way. In these hierarchical structures, they work with command and reaction. This is hard to do if you have a distributed workforce because most people in these organizations fear failure.
They fear failure because if they make failures, they get blamed by the person that commands or manages them. That’s why everyone avoids risk and failure. But it is the biggest thing and the biggest driver for the process.
Pain and reflection equal progress. This is the formula. And in most organizations, failure is avoided. That’s why they still work as they worked like 100 years ago, and that’s why they think work can only be successful if it continues like this.
If you now bring the vision to them, that they can scale their workforce globally with people they don’t know, never saw, that is not even in their country, then they fear that they lose control.
That they get blamed in the organization because they tried something new and this didn’t work out. I think this structure, how organizations work today, is preventing them from trying such new things that are a large opportunity for them.
Derek Gallimore: It’s a brave new world, isn’t it? How do you see the differentiation between long term ongoing roles versus the project-based work? Is that what I’m getting from Flash Hub, bringing on 100 people to get this project done, blitz it, do it to a high standard, and then the team dissipates again, is that the niche angle and then you add?
Manuel Pistner: That was the origin. That was the use case when Flash Hub was founded. When I add my own problems, and I need a huge workforce to scale to get my project done.
Now I realize that most organizations that start with a virtual team, no matter if they are just freelancers or dedicated offshore, nearshore or even local office, are trying to transform to a virtual workforce to escape from the local war of talent.
The trigger usually is I have a huge amount of workload, I have a project but I have nobody who can get this project done. This is the usual initial trigger. Once they see that they have successful experiences with this kind of work, they consider it for other parts of their organization.
For example, if they completed a software development project successfully, then they consider the operations handed over to the virtual team. Then, for example, somebody else in the organization sees this positive experience and tries to adapt.
We also build virtual teams that operate over a constant amount of time, like a year or two. I have not more experienced than two years with that, but I see a shift from project-based work to a continuous operation and engagement.
Gig economy trend
Derek Gallimore: Where do you see the future trends in terms of, there’s been a lot in the newspapers at the moment about the gig economy? There’s resistance to that, certainly in California that I think some laws have been passed in terms of people’s rights, employment rights not being protected with the gig economy.
Do you see this as a generalized trend towards people working in environments where the requirement is turned on and off and then the people just respond to them? Or do you just see this as just one aspect to employment? Is it all or nothing?
Manuel Pistner: That’s a complex question. Let me start with two different kinds of people. There are people that love freedom and flexibility and people that love safety and their daily routines and having those people that they know around them every day. So these are two different kinds of people.
For example, ask all these 500 freelancers that we engaged over the last two and a half years if they are happy with their job. I think 99% they really love it because they choose by themselves when they work, how much, with whom, and where they work. They are self-determined and are free in their decision. That’s what they choose and what they like.
Why should we not allow them to do this? And why should we not allow organizations to integrate and engage with them? On the other side, there are people that don’t want this. They need stability. They don’t want this flexibility. They want always the same routines. They want safety and they will need this more than the lifestyle of flexibility and being independent etc.
For this kind of people, there must be a classical way of employment. This is not good or bad. It is both as it is, and I think there should be a system that helps both people to work in the way they want. From an organizational perspective, I see that not only projects but work itself are getting more complex every month.
When I look back when I started with software development, it was okay just to be a back end developer and you can get a huge amount of work done for a customer that will be happy with the results.
Nowadays, that’s by far not enough. You can’t just develop backend software because you need back end and front end. You need DevOps for different cloud platforms, you need to user experience design.
You need automated tests. It’s getting more complex every day, even with different frameworks in all these specific subjects. That’s where I think the gig economy is a huge opportunity to be able to test fast what really works also to fail fast, pivot, and try something different.
Once you see what really works – and when I say what really works, I mean, which kind of skills you need, how they should work? With which tools and workflows? Then you can try to find somebody that is a full-time employee if this process is continuous and gets operated over like a long period.
What I had in the past is that I had this dynamic in our projects. I always had them and it’s increasing every year. When I was a local organization and hired local employees that should deal with these continuous changes and dynamics, they always had to learn something different, they were always pushed into another thing they didn’t know.
I hired a software developer, then this person should go into a project and should do DevOps engineering, cloud platform because there was nobody else. This person should also do quality assurance and a little bit of user experience design,
Then this role polluted and we had role pollution or role creep and the person itself was not happy anymore because she didn’t do the work that she liked. The other stakeholders were not happy and satisfied with this person anymore because the results were not as good as they were initially.
That’s where I think the gig economy is huge opportunity to get these spikes of complexity and workload covered and then understand better what works and then find somebody who can execute this over a long period steadily.
Successful process management
Derek Gallimore: The key to all this is having a successful project and process management, isn’t it? I think the reason why most things fall down is because of the execution and potentially the ideas that fuel their execution. But, I look at big civil engineering projects. If a bridge or buildings or the Olympics facilities get built, these things are run by World experts.
Inevitably, they are over budget and delivered late. I think it brings into the spotlight, how difficult it is to run complex projects. When there are so many different moving parts, different people, many dependencies, then it is so easy for these things to go wrong.
You obviously bring a lot of value into these processes by using some of it to ensure better results. What are some of those that you rely on?
Manuel Pistner: There are three kinds of these processes. We have steel, we have waterfall projects if clients demand this. You have the typical planning, and then you have the execution and then you test it, hand it over, and then you maybe have some bug fixes, and it’s done.
These are not those projects that my heart beats for because they are not so successful as they can be. What happens is that you plan, but you still know you can’t plan a complex software project from the beginning. It’s simply not possible, but people assume it is.
They do it, then they fail, then they blame and they are disappointed. That’s the old kind of working when things were not that complex as they are today. This can work for planning an event or doing some straightforward work. But the process that we are relying heavily on is Scrum, which is a framework for doing agile projects.
When I say agile projects that come to my mind that most people think: okay, agile, we don’t have to plan we don’t have processes. It’s just a creative process where people collaborate. But this will not work.
They still need a structure. Even if you have highly creative work, it needs a structure of how the creativity of everyone in the team contributes to each other. Scrum is a framework that is very clear. It’s clearly structured. It has clear habits, clear rhythms of meetings. It has clear values with the Agile Manifest.
It also has clear role descriptions and how those individuals interact with each other. That brings agility with a system and not by accident. This is what we rely on most. There is another thing which is called Kanban.
Kanban is also meant to be an agile framework, but more for the operations, not for continuous projects where you want to improve complex things over a long period of time. But where you have like, light support, customer support or software support, basically these things are handled by Kanban.
Derek Gallimore: When you aggregate all that together, do you sometimes see that people engage in remote work or offshoring and it doesn’t work, then they’re blaming the fact that they have offshored? How do you split out the causation between it necessarily being the resources or how they run the project?
Manuel Pistner: Yes, I experienced that very often. I experienced that by myself. I had the scenario where I had a marketing team, and they were all experts in marketing strategy, performance marketing, social media marketing, etc. They were doing these things pretty well but the result was still almost no leads.
I was wondering why then I jumped into how they are working. I saw that they simply missed the structure, the guidance of a framework like Scrum or Kanban, whatever it is. But to produce a real result, you need to do things on a continuous basis. I’m not saying you need to do the same things every day. You need to focus on what matters every day.
For example, we have a daily Scrum meeting. If I look at all our virtual teams, at the time when I didn’t introduce this clear framework with checklists and everything was structured, then every team had different Daily Scrum meeting. Completely different.
On the other side, the scrum meeting has one purpose. It is to identify clockers and commit to what gets done today. This is the only purpose of the daily Scrum meeting. But if you have just a social conversation during this meeting, this will not contribute to the result.
When we introduce these checklists and structures so that people get guided well, I realized the result is much better because every individual can really focus on their specific subject where they are expert and the subject where they match their skills. The structure puts every piece together so that the result will be delivered.
Before we have this, I was also about to blame performance marketing expert that he’s not able to manage the team. That is right. He’s not able to manage the team but he’s a performance marketing expert, not a team leader or team manager, or Scrum Master or whatever.
Finding the right people for the right roles and engage them in a system that guides them well. This is key to the performance of almost any team, virtual teams or local teams. But in local teams, it usually happens that when they miss clarity about what they do, and how they work, and so on, then they have many conversations and many meetings.
They don’t like it, but it’s necessary, but they don’t hide the symptom. They don’t try to introduce more structure and more clarity, but they think that work cannot be done successfully without these conversations and regular meetings. This is simply not true.
Then it starts blaming like okay, these performance marketing guys on (inaudible) managed team tried to find somebody else. Then when you found, when you replace a person three times, at least then you should reflect on your expectations.
Maybe you did something wrong by finding wrong people, delegating wrong, giving them the wrong framework. That is what’s important to understand: where the problems come from, and not finding the fastest and easiest way to claim something.
How to run a smooth operation
Derek Gallimore: There are many factors to having an operation run smoothly isn’t there? There’s this set of processes, then the execution, and the iteration and observation of the existing processes. Right at the top is, I suppose, the strategy and the leadership of this entire operation.
I like to use the example of a cheap, low end, sales development rep can probably cost about $500 a month and can fill a lead funnel. Now, you get a sales expert, a sales strategist and they can maybe do a consultation for about $50,000 for one day in an office. The difference there in the value proposition is, is profound.
I think it’s important to remind clients that the people that are doing the work aren’t necessarily responsible for coming up with the strategy and figuring out how this operation is going to be built. It’s a different task, the strategizing and the architecture to the actual execution, also the management of that process.
Do you involve yourself in all aspects of setting those structures?
Manuel Pistner: Not anymore. I did this in the past, but right now we have these clear structures, checklists, frameworks and guidelines how to create, for example, a performance marketing structure. This does not happen by accident, but it’s also a process.
Then you have clearly defined artefacts like you have branding guidelines, you have communication guidelines, personas, your product, your unique selling point, etc. These are all things that need to be part of a strategy.
If you don’t have this framework, then you hire 10 people and you will not only get 10 different strategies, but you will get 10 different formats. If the strategy is the input for the operations process, just imagine you get 10 different forms of strategies. Then the execution is an accident.
It just happens randomly, the output is something random. If you can’t measure what you do, you just go blind. That is what many organizations or managers don’t understand. And that’s why I absolutely agree with what you said. You need to hire the right people for the right task or for the right responsibility that is key to success in a local team and even more in a virtual team.
Trying out virtual teams
Derek Gallimore: If people want to try this thing, and as you say, people are resistant to change, people are naturally sceptical. How do you suggest that people explore this opportunity for their business?
Manuel Pistner: Let’s start with the thing that can’t fail. For example, what I tell customers if they want to transform their organization into a scalable workforce, maybe in a virtual organization, then I don’t recommend them to Okay, tomorrow you are virtual organization.
Your business will totally fail because you are changing your culture, your tools, people, everything, so you can build it from scratch. This is not the right way. What you can do to tackle the most important challenge is to get your leadership team and your high-performance people in the organization on board with the first positive experience.
With the first positive positive experience, for example, I mean, take your high performers and asked them to work remotely for a week or even a month. Then see how your managers or your leaders feel about that.
They will feel a lack of control because they were used to having a physical presence of their staff every day. Now, their people are not physically in the office anymore, but they will see that a still deliver, if you choose the right people that deliver performance on a continuous basis. This will bring some positive experience and trust in the system of remote work.
And then, try to spread this experience in the organization and find others that want to try this. You will not always succeed, you will see different problems that appear. But if you are open-minded and see these problems as an opportunity, then you are on a mindset of continuous improvement towards this vision of a scalable workforce in your organization.
Derek Gallimore: If people want to embrace this, is it about changing everything in the business today? Is it about adopting project management software, new tools or can you isolate it to just these processes that you suggest?
Manuel Pistner: Tools enable people to do something, something more efficient or better. But to use a tool to improve something, you first need to understand what you want to do and what you want to improve.
Just deploying a tool for something, this can help you for inspiration of what’s possible, but it will not solve the problem of you not knowing what you want to do and what you want to get done. Tools are not the first step.
The first step is to understand what is your exact goal, either in terms of improvement or of KPIs for your operations, and then understand which roles you need so that this process can be operated reliably. When you have these roles you need to find the right people. That’s the next step.
But then, only tools come into play because with tools, you can do what you always did much better. In other terms, if you have a crappy process and digitalize it, you have a crappy digital process. The tool is not the solution to crappy processes.
Derek Gallimore: Incredible. If people want to learn more about Bright Solutions or Flash Hub, what do you suggest they do?
Manuel Pistner: You can find me on LinkedIn, Manuel Pistner is my name, you will find me there. You can also explore flashhub.io or brightsolutions.de. Bright Solutions is in German. If you want, you can listen to our podcast about virtual teams which is also created by a virtual team. The name of the podcast is Virtual Frontier.
Derek Gallimore: Fantastic. Before you go actually tell us about your TEDx speaking experience. How was that as an experience?
Manuel Pistner: It was great because it was completely organized and operated by a virtual team. I had a virtual team and they are tasked to find me a TEDx talk. They were talking to different people that organize such TEDx talks. All of a sudden, they got me to talk within the week.
The TEDx talk was one and a half month in the future so I had to speed up my preparations. I found somebody who coaches people that give TEDx talks and this person helped me to prepare. He was sitting in Spain, also like, a virtual team that helped me to prepare. At this event, there were 1200 people.
It was a large event but the feedback was amazing and the atmosphere, you are standing at the red floor and then you have all these spotlights in your face, you don’t even see the audience. Then you tell your story. That was a great experience. I can always recommend this.
Derek Gallimore: That was Manuel Pistner of Bright Solutions and Flash Hub. If you want to get in touch with Manuel or know any more about this episode, go to outsourceaccelerator.com/274. And as always, if you want to ask us anything, then just drop us an email to [email protected] See you next time.