In the world of project management, how your team is structured can make all the difference. The two primary models are co located teams, where everyone works together in the same physical space, and distributed teams, where members collaborate from different locations. Each setup has unique strengths and challenges that shape communication, culture, and productivity.
This guide explores the dynamics of both team types. We will cover their definitions, history, and a detailed comparison of their trade offs. We will also look at how agile practices apply to each, giving you the insights needed to decide which approach is best for your projects.
What Are Co Located Teams? An Overview
A co located team is a group of people working together in the same physical location. Ideally, this means sharing the same office or even the same room, which removes barriers to communication.
The default mode of interaction for co located teams is face to face conversation, which many agile experts consider the most effective way to share information. When everyone is in one place, questions can be answered instantly through spontaneous chats, leading to faster decisions and quicker problem solving. Classic research highlights this proximity advantage, showing that communication frequency drops dramatically when people are more than 8 meters apart.
This constant interaction helps build team cohesion and trust. It also enables “osmotic communication”, where team members informally overhear conversations and pick up important context without being in a formal meeting. For these reasons, many organizations find that co located teams naturally boost collaboration and productivity.
A Brief History of Co Located Teams
Before the internet became a workplace staple, most collaboration happened in person. This was the era of co located teams by default. However, even then, team members often worked from separate offices and only gathered for scheduled meetings.
The rise of agile methodologies in the early 2000s changed this dynamic significantly. Agile’s focus on rapid feedback and constant communication encouraged organizations to rearrange workspaces, often creating a single shared team room. This setup made it easier to adapt to changes and keep everyone aligned.
As business became more global, it grew harder to get every expert in the same room. Technology evolved to bridge these gaps, with video conferencing and instant messaging creating a “virtual co location” for distributed teams. Despite this shift, the value of having people in the same place is still widely recognized, and the model of co located teams remains a powerful cornerstone of modern work.
What Is a Distributed (Remote) Team?
A distributed team, also called a remote or virtual team, is a group of professionals who collaborate on common goals while being geographically separated. Team members can be in different cities, countries, or time zones, connecting primarily through digital tools like email, chat, and video calls.
This model offers some compelling advantages. Organizations gain access to a massive global talent pool, allowing them to hire the best person for a job regardless of their location—often through onshore, nearshore, or offshore models. It can also lead to lower overhead costs by reducing the need for large physical office spaces. The trend toward remote work has accelerated, with one 2022 study revealing that 97% of employees want to continue working remotely at least part of the time.
However, distributed teams face challenges with communication gaps, time zone differences, and maintaining team spirit. Success depends on deliberately building clear communication channels and fostering a culture of trust to overcome the physical distance.
Co Located vs. Remote Teams: A Detailed Comparison
Choosing between co located teams and a distributed model involves weighing several key trade offs. There is no perfect answer, and the best choice depends on your organization’s specific needs.
Communication and Speed
In co located teams, communication is fluid and immediate. A simple chat at a desk can resolve an issue in minutes. This real time, face to face interaction is incredibly efficient for sparking ideas and reducing misunderstandings. Remote teams rely on technology, and while tools like video calls are effective, they cannot fully replicate the ease of in person collaboration.
Access to Talent
The distributed model opens up a worldwide talent pool. Companies are not restricted to hiring people who live within commuting distance. This means you can build a team with top tier talent from anywhere. An expert once noted that a great remote team can often outperform the best co located team you could form locally, simply because you have access to a higher caliber of professionals.
Team Cohesion and Culture
Proximity builds personal bonds. Co located teams share informal chats, lunches, and daily face time that naturally foster camaraderie. Building this same spirit remotely requires intentional effort. A report by JLL found that only 36% of workers felt they could maintain strong personal connections with colleagues while working completely apart. Cultivating company culture is possible in a remote setting, but it requires deliberate action.
Employee Satisfaction and Flexibility
Remote work offers a level of work life balance that is hard to match in an office setting. A study found that remote and hybrid employees are, on average, 22% happier with their jobs and tend to stay with their companies longer. The flexibility to work from a preferred location and manage personal schedules is a major driver of employee satisfaction and retention.
Costs and Infrastructure
Co located teams require significant investment in physical office space, utilities, and other related expenses. Distributed teams drastically reduce this overhead. While remote companies may invest more in IT infrastructure and home office stipends, the savings on real estate are often substantial. Many businesses are now adopting a hybrid model to balance cost savings with the benefits of occasional in person collaboration.
Agile Methodologies and Team Structure
The Agile Manifesto famously states that “the most efficient and effective method of conveying information to and within a development team is face to face conversation”. This principle shows the original bias toward co located teams, as practices like daily stand ups and whiteboard sessions are simplest when everyone is physically present.
However, agile has proven flexible enough to thrive in distributed settings. Modern agile teams use a suite of collaboration tools like shared digital boards and video conferencing to create a “virtual team room”. They can maintain transparency and frequent communication even across different time zones.
The PMI Agile Certified Practitioner (PMI ACP) exam reflects this reality. The exam outline requires professionals to understand how to use collaboration tools to enhance communication for both co located teams and virtual ones. An effective agile leader must know how to foster rich interaction, whether a team is together or apart. Managing this dynamic in a remote agile environment can be complex, which is why many companies seek expert help. For a deeper dive, download our white paper on remote teams. If you’re looking to build a high performing remote team, Mismo specializes in creating cohesive distributed engineering teams that operate with true agility.
Finding the Right Balance for Your Organization
Ultimately, the debate between co located teams and remote teams doesn’t have a single winner. The optimal choice depends on your project goals, company culture, and the needs of your employees. Some work, especially that requiring deep creative brainstorming, may benefit from the energy of a shared room. Other roles thrive on the focus and flexibility that remote work provides.
Many organizations are finding success with a hybrid model, which offers a blend of both worlds. This approach provides the flexibility to attract global talent, including through a nearshore development partnership, while still creating opportunities for valuable in person connection.
By understanding the strengths of each model, you can design a team structure that maximizes productivity and morale. For those leaning into the power of global talent, it is crucial to build a strong, connected culture. Contact Mismo to discover how to assemble and manage a world class distributed team that feels as connected and effective as any co located team.
Frequently Asked Questions About Co Located Teams
What is the main advantage of co located teams?
The primary advantage is the high bandwidth of face to face communication. Being in the same physical space allows for immediate feedback, spontaneous problem solving, and the subtle transfer of information through body language and osmotic communication.
Are distributed teams less productive than co located teams?
Not necessarily. While co located teams benefit from easier communication, distributed teams can be just as, or even more, productive. Success hinges on strong management, clear processes, and the right digital tools to keep everyone aligned and engaged.
What is osmotic communication?
Osmotic communication is the process of absorbing information informally by overhearing conversations in a shared workspace. It is a key benefit of co located teams, as it helps everyone stay aware of project context without needing to attend every meeting.
How does the Agile methodology adapt to distributed teams?
Agile adapts by using technology to simulate a co located environment. Teams use digital Kanban boards, video conferencing for daily stand ups, and dedicated chat channels to maintain continuous communication and transparency, keeping the iterative process moving forward.
Can you have a hybrid team model?
Yes, a hybrid model is a popular approach that combines elements of both co located and distributed teams. In this setup, some employees may work from the office while others work remotely, or employees may split their time between the office and home; some organizations also adopt a work-from-anywhere policy.
