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Is physical contact making a difference in efficiency, motivation and profitability?

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  • It is a very important management principle. – user3718737 Jul 15 '14 at 15:58
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The gold standard is "in person"

Here is a good depiction of the effectiveness of different modes of communication from Alistair Cockburn: enter image description here

One of the twelve principles behind the Agile Manifesto is:

The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.

I have managed teams that are entirely in one physical location as well as virtual teams including, in some cases, team members not in the same time zone. In each instance my effort was always trying to keep the communication channel as warm as possible with text chat, video conferencing and other such means. We can try to approach "in person", but not be able to match it.

With offshore teams, if I could get some of the team members to travel and meet other team members in person, even if infrequently, it made a huge difference.

In summary, we may have to settle for virtual teams for a variety of practical reasons. We then strive to mitigate the shortcomings of virtual teams by using technology.

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