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In today’s disruptive world, top business giants such as Google, Amazon, Facebook, and Netflix are shifting towards the idea of having cross-functional teams. Unlike some buzzwords, this comes with a definite purpose and meaning. While traditional teams work horizontally within a single department with limited exposure and contribute to the organizational ‘silos,’ cross-functional teams bring in the thought-provoking mindset of speed, innovation, agility, and productivity.
Cross-functional teams comprise members from the organization who offer different perspectives while working to achieve a common goal. They bring a global outlook by understanding the ‘big picture,' which is the organizational goal. Even though departmental workflows are distinct, they should be mindful of the ultimate goal. Otherwise, the most crucial resources are unnecessarily stretched thin in multiple directions at once.
The antidote to this experience is the adoption of Cross-Functional Teams (CFTs). They promote cohesion among the workforce and enable you to achieve business goals faster and with more efficiency and fewer bottlenecks. So, let us decipher the definition of a Cross-Functional Team, its benefits, Cross-Functional Team example, and when and how you can build one.
Definition of “Cross-Functional”
Let us first try to understand the phrase ‘Cross-Functional’. The word ‘functional’ comes from the root word ‘function’ and refers to the role or expertise of the employee in an organization. For example, in the IT industry, it might refer to roles such as front-end engineer, database admin, product manager, or core Java developer. Beyond the IT industry, it may refer to sales, legal, marketing, and customer support. The word ‘cross’ comes from the word ‘across,’ which means just the opposite of single or within.
Thus, it effectively means forming teams across different departments, instead of from within a single department. The team should comprise members endowed with different skill sets and areas of expertise. The main idea is to have a multi-functional team with representatives from every unit. This helps the team move towards the overall business goal with an aligned mindset.
What is a Cross-Functional Team?
Cross-functional teams comprise collaborative members with different expertise but a common business goal. The members can be from unrelated departments such as sales, marketing, finance, legal, product management, etc. This concept of team formation brings a holistic approach to the business with innovation and a fast pace.
Business organizations often struggle with departmental silos. In layman’s language, it refers to a situation wherein teams or groups do not communicate effectively with one another and act autonomously. This condition, in turn, results in stagnant outcomes, wasted capital, and disintegration of the organizational structure. A perfect example can be a regular day at the bank—you run from one counter to the other until you get your job done. This situation depicts the silos as everyone is working autonomously, without any internal collaboration.
Cross-functional teams are often organized for a specific project that requires a global perspective and better insights or for a supreme purpose. The organisational structure can only be of CFTs or can be organized on top of the hierarchical departmental teams. However, the collaboration between members from different spheres and work ethics may result in conflicting processes. Here, the role of the product managers and team leads comes into play to lay the ground rules to clear these hurdles.
The cross-functional team should cultivate the following factors among themselves to work together and succeed:
- Be highly motivated
- Be open-minded
- Be supportive
- Hold accountability
- Resolve conflicts
- Be clear with priorities
- Communicate more
When departments work autonomously instead of in collaboration, it often results in poor business results and unhappy customer experiences.
Next, we will discuss when you should opt for cross-functional teams and why.
When to go for Cross-Functional Teams and Why
Let us focus on the bank example stated above and analyze what went wrong. If you waste an hour or so on a simple task, for example, verification, it depicts the siloed workflow. The organization is not only missing out on an opportunity to build a trustful relationship with the client but is also leading itself towards more frustration and ineffective decision-making.
Building and maintaining a long-lasting comprehensive relationship with your customer is a crucial business target. The role of cross-functional teams comes into the limelight where every member works interdependently to provide a positive and enriching customer experience. They help the organization by putting the customer first and encouraging participation across the teams.
Watch out for these signs in your team or organization which highlight the siloed approach and the fact that it’s time to ditch the silo and embrace cross-functional collaboration.
- Redundancy in tasks, processes, or workflows across teams
- Hesitation in solution acceptance by other teams
- Lack of innovation and creative approach
- Nobody is aware of the big picture
- Less-known project details
- Communication gap among team members
- Time-consuming processes in single-task completion
Organizations with siloed workforce patterns often face the dilemma of “Why me?”. It keeps them away from innovation and a shared sense of responsibility. In comparison, cross-functional teams help you think outside the box. It cultivates a relationship of trust and mutual respect for everyone on the team. One also values other people's work by putting themselves in their shoes. Lastly, it helps to share the overhead or lift the burden off your shoulders with a proactive team.
Benefits of a Cross-Functional Team
Cross-functional teams identify, track, and fix the project hurdles smoothly because the inputs come from varied perspectives. They are often called “vertical teams” in contrast to the horizontal siloed approach. This advantage helps deliver faster results instead of running for inputs from one department to another, resulting in poor quality work and backlogs.
As the latest Scrum Guide update says, “Scrum teams are self-organizing and cross-functional.” This definition doesn’t mean that every single person has to do everything. Rather, it is only applied where dependencies lying outside the team which often result in delays or possible quality issues can be avoided.
Let us discuss the various benefits of having a cross-functional team at the workplace.
- Cross-Functional Teams Promote the Goals of the Organization
Cross-functional teams work keeping the project vision as their goal and not any particular aspect of it. This benefit is in complete contrast to the traditional team working as separate horizontal units. For example, the sales team might only focus on acquiring new leads without paying heed to the finance team’s constraints. The finance team might be worrying about the falling market trends, which may, in turn, make them hesitant in taking a risk, such as launching a new product. Lastly, the marketing team might be clueless on how to proceed further.
The quest is to get them all on a single call, but that sounds chaotic and may induce conflicts. Therefore, in a cross-functional team, we bring in the representatives of these teams to work together in harmony. When they work and communicate on a daily basis as part of Scrum processes, none of them is blocked by another’s conflicting priorities. This behaviour is the essence of a good CFT.
When teams come together in their day-to-day goals, one can duly ensure that the organizational goals, mission, and vision are at the top of the pyramid. Competition between the individual units gets eliminated. Everyone now works with full synergy, increasing the profit margin of the organization.
- Cross-Functional Teams Improve Functional Coordination
The lack of coordination between the functional units of an organization is a prevalent issue for SaaS (Software-as-a-Service) companies. It arises due to conflicting priorities and interests. For example, if the finance team prefers not to risk initiating a new product launch, the product team can’t proceed with their current developments. It results in a roadblock where one unit will blame the other for taking accountability.
Cross-functional teams work together and identify what is stopping the finance team from taking risks. They will try to analyse the finance team’s findings and collaboratively finalise the key features of the new product. It ensures a collaborative culture with a shared decision-making paradigm and a greater sense of accountability. The team members learn from each other, which, in turn, fosters engagement and team building.
Effective cross-functional teams brim with flexibility. With an open mind at work, the percentage of workers engagement shoots up and makes your company a happy place to be employed. A flexible attitude helps in resolving conflicts. They also feel voluntarily liable to keep up with the organizational promises of a customised and cohesive customer experience.
- Cross-Functional Teams Increase Efficiency
In cross-functional teams, every person is well-versed with each department’s barriers and weaknesses as well as their strengths and areas of expertise. Thus, for instance, if the sales team is struggling with the campaign for a new product that inherits the latest technology, the product team can work along with them in a cross-functional team setting and help them perceive the challenges beforehand. This notion would pace up the execution process with less wastage of time and resources.
Speed in the project timeline during development and delivery is one of the prime benefits of having a cross-functional team. When members from different roles such as HR, sales, marketing, IT, and operations come together, they learn better from their overlapping areas of expertise. There is no doubt that this idea pushes the individual potential of the members, brimming up their productivity.
When teams speak and understand the “common business language,” they break stereotypical barriers and start to embrace the diverse work culture more. This mindset further minimizes risks, sunk costs, and fosters collaboration.
- Cross-Functional Teams Foster Creativity and Innovation
When cross-functional teams perceive the viewpoints of different functionalities, it spurs the innovation spirit in them. As each member brings in their diverse work ethics and mindset, the whole team is on the pathway to innovative products. They start to witness the value and look for creative solutions instead of completing their daily targets. Also, learning from one another boosts the mind with creativity and facilitates team bonding.
Bringing different skill sets together breaks the barriers of siloed organizational structure. When the team thinks in new ways, it spurs an empathetic, creative, and problem-solving mindset. Cross-collaboration challenges the “group thinking” status quo and encourages open innovation. These innovative solutions promote customer satisfaction and accelerated business results.
When departments work autonomously, they hesitate to introduce something new. Hence, it is often difficult to improve stagnant processes and make the workflows better for all. Whereas, in the case of cross-functional teams, working together promotes cohesion to accept new solutions from other functional groups. The varied backgrounds significantly increase the probability of innovation at the workplace.
- Cross-Functional Teams Reduce Unnecessary Loop Times
Clients typically approach to improve the existing in their system. They have limited bandwidth and pre-planned schedules. If an organization unnecessarily delays solving customer pain points, conflicts and frustration are bound to happen. For example, if a customer wants to include a new feature in their mobile application, you keep them in a loop with no concrete solution or strategy.
Cross-functional teams work together to minimise cycle times. The recurring pain points of the customers gets solved with a solution-driven mindset. It is often not the pain point that is complex to solve, but the inefficiencies of the team members of a functional unit to solve it.
Cross-functional teams drastically reduce the loop times with their work culture. This benefit fosters quicker deliveries and a good reputation for the company. So, instead of moving a customer from one silo to the other, the cross-teams provide a far more enriching experience with fewer breakdowns.
Create an effective Cross-Functional Team
Now that we know what a cross-functional team is and its range of benefits over traditional teams, let us discuss how to build an effective cross-functional team.
- Ensure Team Diversity
Diversity in a cross-functional team need not only be in the area of expertise. A good CFT should be diverse in age, industry experience, demographic, seniority, gender, race, and professional background. It helps the group to be more proactive and effective in achieving goals.
For example, a Gen-Z tech employee may bring fresh ideas to migrate from a traditional workflow to a modern one. This example emphasizes that junior team members express their opinions freely and confidently in a supportive atmosphere that a CFT provides.
- Set Clear Goals
If the cross-functional team is accountable for a project with a broad scope and ambiguous goals, the team may fall apart and lose confidence. However, if the project goals are made crystal clear with detailed information about its scope, vision, and milestones, it helps the teams to perceive the big picture. It creates a sense of responsibility among them to deliver before the deadline. The introduction of suitable agile frameworks and project management tools may be of more advantage.
For example, try to align your goals with each member’s effort. You can use a visual storyboard or a graphic presentation for this purpose. This activity enables you to bind each member to the overall goals and their share of the organizational success.
- Role of Influencers/SMEs
Every functional department will have some employees who will know more about its processes, strengths, weaknesses, products, and clients than others. A cross-functional team should include representatives who can give correct insights and are excellent communicators about the how’s and the why’s.
When information is required about different departments, these Subject-Matter Experts (SMEs) play a significant role. To break the barriers of the siloed approach, influencers like these are essential in a team to help it escalate the process and also motivate everyone else.
- Dealing with Conflict
Cross-functional teams can be more vulnerable to conflicts because of their diverse working style and skillsets. Team leads can resolve conflicts with proper training and put forth to everyone the overall purpose. This conflict-solving training may open doors for the members to connect and learn from each other. Embracing the differences through team-building workshops helps establish trust and boost productivity.
Encouraging a positive attitude and healthy conflict resolution is a must for cross-functional teams. One should focus on improving by accepting solutions provided by others.
- Embrace Changes & Exclude Hierarchies
In a cross-functional team, there should be openness, trust, and respect among team members. The senior members should not press their viewpoints in team meetings. When members with less experience share their ideas, they should be fearless and valued.
Organizational success comes from team diversity. So, if you haven;t already, ditch the departmental hierarchies and embrace new technologies and tool, and your organization will embark on its journey towards the top of the fast-paced, technology-driven economy in no time.
Having cross-functional teams at work can be highly rewarding but it comes with some drawbacks too. Shifting your organizational structure to a new system of CFTs can be cumbersome in the initial stages. They can significantly hinder the professional growth of an organization due to a narrow focus on one area for a lengthy period. Hence, teams are rotated periodically to encourage innovation. This also prevents stagnation and losing oneself from the benefit of CFTs. Another downside is when a CFT is responsible for complex, vaguely scoped projects. Without a proper project deadline, teams may lose the sense of urgency and focus on delivering value.
However, as the saying goes, “Two heads are better than one,” similarly, cross-functional teams challenge the status quo with their diversity and variety in professionals along with agile frameworks, they have now become a well-known success mantra for many organizations. So if you haven’t leveraged the benefits of a cross-functional team yet, there’s no time like the present to give it a shot.