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Building a Cross-Functional Team: It's Easy If You Do It Smart

author Ranee profile imageRanee Zhang
May 30, 20224 mins
What is a Cross-Functional team?

In the rapidly evolving business world, cross-functional teams are the answer for organizations looking forward to faster growth and innovation. Companies such as Google, Amazon, Netflix, and Facebook are making efforts to build more cross-functional collaboration. These teams have a combination of skill sets that are required to execute a project successfully.

According to Behnam Tabrizi, an organizational transformation expert, projects with robust cross-functional support or executive cooperation have a 76% success rate.

First, let’s understand the role of a cross-functional team and how they can add value to your organization.

What Is a Cross-Functional Team?

A cross-functional team comprises employees from different departments within the organization whose expertise and viewpoints are crucial in achieving a common goal.

A strong cross-communication team employs every team member's skills, expertise, and tools to achieve goals more efficiently. Also, called multidisciplinary teams, they have limitless possibilities.

An increasing number of organizations are assigning complex tasks such as product management to these skillful groups of people from multiple organizational functionalities.

Cross-Functional Team Examples 

Here are a few examples of how cross-functional teams have been a success. 

  • The media giant Netflix gives more importance to speed and freedom. Each product team comprises people from different departments to make its design systems more flexible. The organization posted a Youtube video wherein employees share how working in cross-functional culture has benefited them.

  • Toyota, one of the major automotive companies in the US, has always been ahead of its competitors with its superior quality products and highly productive teams.

The key to the success of Toyota is cross-functional teams that have product designers and people having expertise across different business functions such as marketing, finance, purchasing, and manufacturing. 

According to Nancy Fein, Group Vice President, Customer Service at Toyota Motor Sales, “The most important thing is collaboration. You really want everyone’s voice in the room. And you want not just their expertise but experience across the company.”

  • Another example of effective cross-functional collaboration is the teams at Google. Much like smaller organizations where there aren’t separate verticals, people with different expertise (such as development, program management, and UX/UI) work collaboratively. The organization ensures that everyone is a part of the decision-making process. The company gives more importance to innovation and intelligence rather than hierarchies. 

Says Kai Haley, Head of UX Methods and Process at Google, “We all know cross-front control collaboration is amazing, as it does unlock lots of great opportunities and potential when you’re able to get teams to work together.”

Advantages of Cross-Functional Collaboration

Here are four significant benefits of cross-functional teams:

  • Cross-functional teams make it possible for different departments to communicate and share their best practices.  As compared to companies where the departments work in silos these teams promote a culture of collaboration. 

  • According to Gallup, employee engagement in America is witnessing a decline, plummeting from 36% in 2020 to 34% engaged employees in 2021. In the wake of this rapid decline, cross-collaborative structures promote shared decision-making

They provide an opportunity for teams to come together for a common goal, thereby making employees more engaged and satisfied.

  • Cross-functional teams promote innovation as they bring a diverse skill set together. For creativity to thrive, you need people with different expertise, skills, and knowledge to learn from them, which is impossible when working in silos.

  • Another benefit of working in a collaborative environment is that you get an opportunity to hone your leadership skills. Of course, not everyone is meant to be a leader, but team leadership is not hierarchical in a cross-functional setup. For instance, if someone has the required skills even without years of experience, they get a chance to lead the team.

Challenges Faced by Cross-Functional Teams

Although cross-functional teams are the future of innovation and growth, they also have some challenges. 

  • Without adequate guidance, cross-functional teams may not be able to achieve the required goals. So having a clear idea of the expectations and objectives makes it difficult to collaborate. So, having a well-defined purpose is essential.

  • Sometimes having more people with different personalities is difficult to handle. It becomes all the more challenging if the team does not have a strong leader who can manage people. 

  • Another important factor that hinders the working of cross-functional teams is the absence of trust from the very start. Successful teams have enormous confidence in each other that develops over time. 

But when we put cross-functional teams together, it becomes a challenge initially as people may not have confidence in each other's capability, making the job more difficult.

How to Build a Cross-Functional Team

The success of your cross-functional team depends on your implementation efforts. Here are a few steps that will come in handy as you focus on creating a team across different departments and functionalities.

Step 1: Get the Right People for the Job

The first and foremost aspect is to have people willing to participate and give their best to achieve the team's goals. Use these questions for guidance as you select members for the team:

  • What is the purpose of creating the team? 

  • What will be the size of the team? 

  • What are the diverse skill sets that I require to achieve the goals?

  • Does an individual have solid functional knowledge?

  • Does the person possess good interpersonal skills and the willingness to collaborate?

  • Is the person a creative thinker?

  • What is their approach to problem-solving?

  • Have I included all the relevant departments?

  • Do I have a mix of different business personalities to get the best outcome? 

(Tip: It is best to include different personalities such as artists, leaders, and entrepreneurs as all of them bring unique perspectives to the table)

Step 2: Establish Leadership

The two most essential ingredients for the success of a cross-functional team are clarity of goals and skilled leadership. Look out for a leader who has at least a basic knowledge of the diverse skill sets across different departments. Secondly, the person should be able to bring the team together by facilitating communication between the experts.

Once the team leader is selected, the team should list out the ground rules in terms of expectations as each member should know their roles and responsibilities to promote accountability. 

Step 3: Define the Goals Clearly

Once you have a strong leader and a skilled team, the next step is to make the team aware of the goals so that you don’t lose track of the bigger picture. Encourage your team to develop short-term goals that will help achieve the long-term targets. Create SMART goals that are instrumental in bringing clarity and motivation. 

Smart goals

Step 4: Establish Clear Lines of Communication 

Good communication is essential to make a project successful.  Cross-functional teams are generally not under the same roof, so it may not be possible to walk over to your colleague to share an idea. 

Nonetheless, clarity is vital as it facilitates collaboration and prevents confusion. So, the team members should know their contact points, meeting setups, and procedures for sharing and making changes to documentation. 

Strategies for Building Successful Cross-Functional Teams

Once you have built a cross-functional team, the real challenge is to ensure smooth and efficient functioning, and the following tips will help you overcome it.

  • Team members should not feel like outsiders in a cross-functional environment. Building a team identity is crucial in making everyone feel at home. Having a social event before working together is a good strategy as it will allow you to learn more about your colleagues. Having shared values and goals also helps in building team identity.

  • As people connect with their departments more, team members in another functional area may be left out of meaningful conversations. Regular meetings and knowledge sharing help solve this problem and make people more comfortable working with each other. Leverage meeting agenda tools that help you connect with your team from anywhere, with a click of a button.

  • Focus on improving the quality of communication to achieve the desired goals. You need to chalk out a cross-functional workflow and the communication channels the team will use, offline and online. The team also needs to have a consensus on the frequency of updates regarding the project. Another critical consideration is charting a decision-making plan where team members feel independent to make the right decisions and have ownership over the outcome. 

  • Involve the managers and senior executives from the respective departments to stay abreast of the work their people are doing as a part of the cross-functional team. Moreover, they may have valuable insights, so involving them in the monthly progress meetings is a good strategy.

Mistakes to Avoid When Building Cross-functional Teams

Did you know that according to the Harvard Business Review, 75% of cross-functional teams are dysfunctional? The absence of strong leadership, lack of organization, and accountability are some of the factors that make the success of cross-functional teams a far-fetched goal.

So, here are some pitfalls that you should be aware of when building a cross-functional team.

  • Regarding project tasks, members of cross-functional teams generally prefer their departments. So ensuring that people are committed to the team and have the bandwidth to join a new team is essential. 

  • In many instances, it has been noted that the absence of strong leadership is detrimental to a cross-functional team. It is because their focus shifts to the tasks without thinking about the final picture. This mistake can cost the team as the final product can be compromised.

  • Office politics and escalation to different departments also hampers the functioning of a cross-functional team. Team members tend to escalate issues to their respective seniors in the department without making an effort to resolve the issue at hand.

So, laying out expectations and values for team members before the project kicks off is good practice. The employees must be encouraged to approach a cross-functional team member or team leader when faced with conflict.

Final Thoughts

Although the early stages of group development can be challenging, cross-functional teams are a valuable addition to organizations. They bring multiple skill sets together and achieve the desired goals efficiently. However, good communication, trust, and strong leadership are essential factors contributing to cross-functional collaboration's success. 

You can build a fantastic cross-functional team virtually where members are connected and can simultaneously work independently. Moreover, these teams can work beyond space and organizational boundaries, enabling efficient cross-functional collaboration. 

Ranee Zhang

Ranee has worked in the SaaS industry for nearly ten years. She loves working with, learning from, and helping develop effective leaders and is willing to share her thoughts through words. Outside of work, you can find her dancing, hiking in the mountains, or reading in a cafe.

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