The title to this post is a bit of a trick question. When it comes to building camaraderie, boosting productivity, and gaining clarity, there's nothing like being in the same location and having face-to-face communication. However, there's more to team effectiveness, such as work style flexibility, autonomy, and cost efficiency.
Moreover, working virtually, at least part of the time, is increasingly an expectation in today's digital world, so employee satisfaction and retention is a consideration.
The question of which is best, therefore, is misleading and falls short. Both have advantages and disadvantages. The best solution is usually to combine both, having periodic face-to-face meetings, especially at the beginning of major initiatives or at crucial points, and at least yearly. There are exceptions of course, depending on your industry and culture, but it's worth considering the advantages of a combined approach.
I recall being on the leadership team for the Project Management Institute's standards for program and portfolio management (First Editions) a number of years ago. We had to lead over two hundred volunteers in a multi-year program. The leadership team and several sub-teams met face-to-face a couple times during that period. With each face-to-face meeting, we noticed a marked improvement in clarity and productivity, and the first one alone boosted camaraderie immensely. Yet, working virtually most of the time was quite effective and productive.
This article in Harvard Business Review on Combining Virtual and Face-to-Face Work offers a concise overview of the benefits of working virtually and face-to-face, and provides sound approaches for combining the two. It's not a bad guide to follow.
For more on virtual teams, see my post from a few weeks ago on Finding a Balance with Virtual Teams.
Jerry Manas is the bestselling author of The Resource Management and Capacity Planning Handbook, Napoleon on Project Management, and more. At PDWare, Jerry helps clients improve strategy execution through tools and processes that align people and work with organizational priorities. Connect with Jerry on Twitter and LinkedIn