Managing by remote control

These CEOs say they don't need to be on site to keep goals in sight

After Richard Davis was hired as CEO of Ultimus, a business software company based in Cary, he considered moving to the Triangle and working at the headquarters. But he chose to remain in Cambridge, Mass.

"I spent the first month or so in Cary," said Davis, who joined the company in May 2007. "After that, I decided I only needed to be here six to eight days a month. The rest of the time, I'm traveling."

Davis' situation is not unique.

* The home base for the CEO of Oriel Therapeutics, a drug development company whose headquarters is in Research Triangle Park, is in California.

* RPath, a Raleigh company whose software helps other businesses tap massive computing networks via the Internet, has an interim CEO based in northern Virginia and a vice president of sales who works out of Dallas.

* TireSwing Systems, a company that sells software for creating Web sites, has a CEO and chief financial officer in Florida -- the husband-and-wife team of Alan Norris and Amy Nowell. The firm's marketing manager, Doug Bond, is in Raleigh.

These far-flung executives aren't long-distance commuters. Rather, they've decided that their primary workplace doesn't have to be where employees can see them every day.

Out of sight is no longer out of mind.

"I have, anecdotally, seen a great uptick in this happening at the management level," said Arvind Malhotra, professor of strategy and entrepreneurship at UNC-Chapel Hill's Kenan-Flagler School of Business. "There is a dissolving of the notion that we all have to be at the same location at the same time."

Giant corporations, of course, have embraced the concept for a while. Their strategy in a global economy typically involves facilities and workers around the world -- forcing many CEOs to spend huge chunks of time traveling and meeting with employees and customers.

Some companies have gone so far as to impose a more formal structure: multiple headquarters.

Computer maker Lenovo keeps headquarters in Morrisville, Beijing and Singapore. The company's chairman, Yang Yuanqing, lives in the Triangle; CEO William J. Amelio is based in Singapore.

"Lenovo has forgone the notion of a corporate headquarters, so essentially I am flying around the world most of the time," Amelio said in a recent speech at N.C. State University. "I have a very limited staff, and most of them are spread around the world."

GlaxoSmithKline, which is based in England, for years kept twin U.S. headquarters in Research Triangle Park and Philadelphia. It only recently announced plans to shift that status to RTP alone.

Technology advances

Certainly technology -- e-mail, cell phones, audio and video conferencing, software that allows for virtual collaboration -- makes remote management teams more viable than ever.

"It would have been really hard 50 years ago to do any of this," said Malhotra, who has studied virtual teams of workers that collaborate on innovative projects, including rocket science.

But technology alone isn't enough. Executives say it requires extra effort to make the arrangement work.

Communication is key.

"That usually involves a good bit of e-mail," said Jake Sorofman, vice president of marketing at rPath, who has been involved in long-distance management teams at three different companies. "But also I have been in jobs where I am on the phone nine hours a day. There is just a lot of communication -- probably more so than you would have in a physical environment.

"You have to compensate for the unsaid things that may be understood in a physical environment," he added. "You can almost see where things are going when you are physically co-located."