If we exclude all external factors then co-located team in a war room style workspace is the the most efficient way of getting things done. However, in today’s world it is quite hard to build a company that is entirely co-located. So given that the company is anyway distributed we should perhaps look at the team level distribution from a different angle as well.
If we observe co-located teams then it is interesting how even small changes in the way how team members are seated (e.g facing each other vs backs to each other or tables next to each other vs few meters apart) has significant effect on the communication patterns of the team. Despite all the improvements in collaboration technology like messaging, video conferencing, screen sharing etc then distributed teams must pay quite high price for less efficient intra-team communication.
However, there are many external factors at play as well. There are good reasons that drive companies to open offices in remote locations. Typical examples are the need to be closer to the target market or access to wider talent pool for hiring.
Team’s success depends not only on internal efficiency but also on its connectedness with the rest of the organization. In a modern organization there is a lot of knowledge being generated every day. A team needs to be able to distill out the important stuff while avoiding getting drown under the piles of irrelevant data.
Teams need to embrace that — a pair of ambassadors at an important remote office may easily outweigh the intra-team communication overhead by improving the inter team communication. This is also quite efficient way how to grow the company cross locations. Over time this pair can build new team around themselves while making sure that there is continuity in adapting organization culture and existing knowledge.