How To Create and Manage Cross-Functional Teams

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Corporate hierarchies have long been the reality of business operations. But often, departmental silos lead to inefficiencies and a disconnect with the market. Cross-functional teams can overcome many of the drawbacks of conventional teams if implemented correctly.

If you want to know more about the benefits as well as challenges of cross-functional teams, read on as we dive deep into the topic. We’ll also share a few essential tips for building and managing a successful cross-functional team.

What Is a Cross-Functional Team?

A cross-functional team allows individuals from different departments within an organization to come together and use their distinct skill sets toward a common goal. 

Organizations leverage cross-functional teams for specific projects or as a temporary arrangement. But, depending on the type of organization, having cross-functional teams can be the norm instead of the exception.

The idea behind having people across the organization collaborate is to foster a culture of innovation and alignment toward the company vision. When employees rise above silos and put their individual strengths together, success is all the more likely.

Why Do Cross-Functional Teams Exist?

If you’re unfamiliar with the concept, you might wonder what led to organizations using cross-functional teams. In fact, cross-functional teams are nothing new. Industries such as insurance, manufacturing, and technology have used them successfully for many years now.

The need for breaking away from conventional corporate hierarchies arose due to fundamental shifts in business on a global scale. Rapid advancements and cutting-edge technologies have become commonplace in the internet age.

The pace of business development and level of competition is accelerating day by day, often proving traditional departmental structures inadequate.

Cross-functional teams promote more efficient resource utilization, faster and better decision-making, and superior customer relationships. This helps organizations present a cohesive face to the market.

What Are the Benefits of Cross-Functional Teams?

Cross-pollinating ideas and skill sets between various departments provide the organization with a higher chance of solving problems. It also connects your team members with their work on a deeper level, increasing employee satisfaction and retention.

Below are some other notable benefits to utilizing cross-functional teams.

Cross-Functional Teams Are More Efficient

When employees from multiple departments like product development, marketing, sales, and finance put their heads together, they have a better view of the entire project.

Instead of a project being passed to the next department after every stage, this inter-departmental team can work as a whole, anticipate challenges earlier, and solve them faster.

This not only reduces cycle time but vastly improves the project’s chances of success.

Cross-Functional Teams Are Aligned to a Single Goal

Conventional organizational structures engender a narrow vision of the purpose behind a  project or organization.

When employees focus only on their own department’s responsibilities, they often have blinders on and fail to grasp the bigger picture.

Cross-functional teams, in contrast, have people from across the organization focused on a single goal without getting myopic about the entire process. They have a better understanding of the organization’s vision and tend to avoid unnecessary inter-departmental conflicts.

Cross-Functional Teams Are More Innovative

Innovation tends to originate from diverse teams pooling together their knowledge and experiences, instead of from the minds of lone geniuses.

When your teams are no longer bogged down by their day-to-day tasks, they can widen their horizons and brainstorm increasingly novel ways of tackling hurdles.""

This lays the groundwork for innovative ideas and processes to come forth. And in a setting that promotes communication without judgment, these ideas are free to be heard and accepted.

What Are the Most Common Challenges When Managing Cross-Functional Teams?

All the benefits of cross-functional teams don’t negate the fundamental downsides that come with bringing together people with often conflicting viewpoints and ways of working. An HBR study showed that as many as 75% of cross-functional teams fail to meet expectations.

Before you create and manage a cross-functional team, you’ll need to be aware of the potential challenges coming your way:

Unclear Objectives

One of the biggest reasons many cross-functional teams underperform is that they lack clear objectives.

Without specific goals and responsibilities, a cross-functional team will flounder as employees do whatever they think works best.

It’s a cardinal rule to establish all important objectives of the team early on so the team members have a foundation to build upon.

Conflicting Priorities

Conflicts are unavoidable when people from different sensibilities work together, especially when they belong to departments with conflicting goals.

People, knowingly or otherwise, focus on their own agendas and departmental obligations rather than focusing on the project goals.

Team leaders need to be prepared for and equipped to deal with conflicts and resolve them in a way that doesn’t hamper the productivity of the team.

Overworked Employees

In organizations where cross-functional teams aren’t the norm, the added work can sometimes overburden employees.

Team members have to take on additional responsibilities over their regular departmental tasks. This can defeat the purpose of the entire exercise and discourage people from participating in cross-functional teams.

One way to prevent this is by having team members rotate in and out of the team to alleviate the additional burden.

Stagnated Personal Growth

It’s sometimes possible for cross-functional team members to overlook personal growth in lieu of prioritizing organizational goals.

Similar to the issue of additional responsibilities, mandating limited tenures for employees can help prevent this problem. Post their tenure in the cross-functional team, they can focus solely on their departmental responsibilities.

Preventing stagnation and allowing team members to focus on personal goals increases engagement and also keeps them excited to return to the team.

How to Build and Manage a Cross-Functional Team?

Building a cross-functional team that isn’t prone to the same drawbacks as the majority requires a few key considerations.

We discussed the challenges inherent to managing cross-functional teams but how do you ensure you bypass them and create a successful team? Let’s find out.

Choose the Right People

It goes without saying that a great team should have great people. But assembling a  cross-functional team goes beyond choosing people with the right technical skills. It also includes bringing together the right temperaments and personalities.

Without people adept at emotional intelligence, stakeholder management, and communication, your cross-functional team is likely to be dead on arrival.

This means prioritizing hard and soft skills in your vetting and/or hiring process.

Designate a Leader

Despite prioritizing heightened collaboration, a cross-functional team still needs a leader who ensures accountability among the team members. The leader needs to strike the right balance between providing autonomy and demanding compliance.

Developing leadership qualities in the team members is also one of the responsibilities of the team leader. With adequate mentoring and skill development, the leader can successfully hone future leaders to steer the organization ahead.""

Effective project management is another way to ensure there’s a reliable strategy for meeting team goals.

Have Crystal Clear Goals

The more clarity you provide your team members, the better performance you can expect from them.

If everyone on the team knows exactly what’s expected of them and how it connects to the overall goal of the team, the team is more likely to be successful.

Create Shared Success Criteria

In order for the team to achieve the desired objectives, key performance indicators (KPIs) become a grounding force.

In an inter-departmental team, there are bound to be conflicting goals and as a result, diverging KPIs.

But it’s the team leader’s job to converge every individual’s idea of success by reinforcing what matters to the project and the organization.

Constantly Reevaluate Every Project

How your team members perform during the project can either pave the way for success or build the road to failure.

A successful cross-functional team constantly reevaluates its performance as well as its alignment with the project goals. Continuous monitoring and adjustment are essential to keeping the team agile and saving countless hours and resources.

Conclusion

Cross-functional teams are gaining popularity across the corporate landscape for their immense benefits to project management.

The very first step to building a great cross-functional team is choosing the right people. If you’re in the process of assembling a team for your next project,talk to Trio today!

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With over 10 years of experience in software outsourcing, Alex has assisted in building high-performance teams before co-founding Trio with his partner Daniel. Today he enjoys helping people hire the best software developers from Latin America and writing great content on how to do that!
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