Cross-Functional Team

What is a Cross-Functional Team?

A cross-functional team is a group of people that combine varied functional interests and expertise to achieve a common goal. Cross-functional teams are also known as multidisciplinary, or interdisciplinary, teams and include several fields such as finance, marketing, operations, and human resource departments. 

Cross-functional teams benefit businesses through cohesive collaboration and cooperation, enabling experts from different departments to band together and create unifying directives that achieve company goals.

Projects with strong cross-functional collaboration or executive support have a 76% success rate according to a recent Stanford University study. This means that when a systematic approach is taken to governing a cross-functional team, the chances of success skyrocket.

Cross-Functional Team Advantages

Building cross-departmental teams that use aptitude and expertise to collectively drive business objectives and build business continuity plans through collaboration is imperative to the success of organizations.

Several innovative software companies such as Google, Amazon, and Facebook have all adopted cross-functional teams and started to move away from siloed departments. 

Bringing different departments together optimizes skill sets and delivers a global perspective to work. The benefits of cross-functional team collaboration are as follows: 

  • Greater transparency that can drive efficiency
  • Improved employee engagement 
  • Generation of innovative ideas 
  • More effective communication 
  • Development of management skills

Cross-Functional Team Disadvantages

The nature of cross-functional teams can be complex and convoluted if mismanagement occurs. The most important things to consider when establishing a cross-functional team are direction, scope, and objectives. 

Making sure that everyone is on the same page and understands the deliverables can be tricky for organizations that are trying to establish cross-functional teams. Here are some common downfalls of cross-functional teams: 

  • Poor customer centricity 
  • Issues with coordination & skills 
  • High expectations 
  • Lack of communication

What are Cross-Functional Teams Best Practices?

Effective cross-functional team collaboration is the backbone of complex projects with deliverables in different business areas. The expertise provided by varied functional units enables businesses to exchange information and work towards a common objective. 

That being said, it’s sometimes difficult for cross-functional teams to discern, exchange, and apply critical information correctly. Here are three cross-functional best practices for merged teams: 

  1. Focus on Building RelationshipsOrganizations that build strong and healthy cross-functional teams are more adept at sharing information, resources, knowledge, and skills. Cross-functional teams generate a more accurate and holistic view of the entire organization which leads to innovation and growth.
  2. Encourage Collaborative LeadershipCollaborative leadership is at the heart of creating an open, accessible workplace that champions communication, information sharing, total participation, and conflict resolution.
  3. Cultivate Healthy Communication & Information SharingHigh-performing teams generate higher revenues, develop and deploy software faster, have shorter cycle times, and enjoy less downtime. Working environments that integrate and respond to new evidence effectively open themselves up for much higher levels of innovation and creativity.

Cross-Functional Team vs. Functional team

Functional teams contain employees from various vertical levels of the organizational hierarchy that carry out distinct functions. Typically, functional teams have several dependents and a manager who oversees both internal and external operations. 

Examples of functional teams include: 

  • Accounting 
  • Marketing 
  • HR 
  • Finance 

Most departmental teams are functional and collaborate with other departments to disseminate information and achieve strategic objectives. 

How to Build Cross-Functional Leadership

Developing a cross-functional leadership team encourages leaders and executives to make significant considerations around strategic business objectives. Cross-functional leaders should focus on centralized tasks that foster better collaboration and functionality. 

The three tasks that help to build cross-functional leadership are: 

  1. Persuasion through common pain points
  2. Negotiation of leadership should be done fairly
  3. Finding common ground

The importance of cross-functional teams is on the rise because complex modern projects need a blend of skills from a variety of functions

Cross-Functional Teams Examples

Here are two examples of cross-functional teams: 

  1. Apple
    In recent years, Apple has moved away from a radically autocratic leadership style and now embraces the free flow of ideas between its employees. Apple embraced the cross-functional team model to build the iPhone, incorporating the knowledge and expertise across departments to drive the smartphone revolution. Apple built innovation through collaboration and a clear vision that still holds true today.  One of the main reasons attributed to the continued success of Apple is its organizational culture. It supports cross-functional leadership and cooperation, which has allowed Apple to grow from roughly 8,000 employees and $7 billion in revenue in 1997 to around 150,000 employees and $365.8 billion in revenue in 2021. 
  2. Nokia
    Nokia has used cross-functional teams as a basis for its hiring strategy. They employ people who have experience working in cross-functional teams and in multi-site environments. Nokia combined the skill sets of scientists and engineers to create a multi-project approach to innovation and creativity. The transistor that has gone on to revolutionize multiple industries was invented by Nokia in this way.

The lesson to be learned from Nokia’s cross-functional innovation is simple. The more cross-functional teams understand the basics of fellow collaborators’ specialties, the more creative, productive, and fruitful your business will become. 

The Role of Cross-Functional Teams in the World of Digital Transformation

It’s no secret that cross-functional teams build innovation and create new ways of achieving and exceeding objectives, goals, and expectations. Cross functionality delivers purpose and creates an atmosphere where digital transformation can organically develop. 

Digital transformation teams are cross-functional in nature and consist of multiple specialists across different divisions. The end goal of cross-functional digital transformation teams is simple; it’s about optimizing a smooth transition into digital workflows. Teams that work together towards a common goal help businesses achieve measured and long-term success that sparks innovation.

Conclusion

Cross-functional teams are at the core of modern business development. They shape the way that work is carried out through knowledge and expertise across departments. Businesses across the world have implemented the use of cross-functional teams to disrupt business models and develop new ideas, products, and services that couldn’t have been achieved otherwise. 

Cross-functional teams represent the future of modern business practices and help to upend and shift processes into the future. Businesses that adopt and invest in cross-functional teams are more likely to gain better insights in to service and product development, have higher employee productivity, increase the possibility for innovation, and have expert communication skills.

Published: February 01, 2022 Last modified: April 05, 2022

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