What are cross-functional teams and how do they work best?

Within any business, different skill sets and points of view are often necessary to complete a project or goal. While individual teams or departments can often work together to execute a common vision, using a cross-functional team may get a project to the finish line faster and with greater success.

This approach of having a group of people with different skill sets, responsibilities, and disciplines working together can be not only more efficient but necessary for an enhanced user experience.

A cross-functional team is a group of employees with a variety of skills and experiences who join forces to reach a common goal. This goal can be project-related or more general, but the overall idea is the same: to combine everyone’s abilities to produce better results. Cross-functional teams work differently from workplace to workplace, depending on the organizational structure.

For example, cross-functional teams are common in smaller companies like start-ups, where most employees end up "dipping" into other roles. On the other hand, large corporations might set up cross-functional teams from different established departments to work on specific projects or purposes.

Cross-functional teams have benefits not only for the company but also for customers and team members.

Whenever a company pools resources by encouraging collaboration amongst departments, they are fostering a culture of sustainable decision-making. The team members will be more empowered and better equipped to respond to customers’ questions or concerns.

Cross-functional teams can work well in almost every industry, but they are particularly well-suited to product development. A cross-functional team could include not only engineers and product developers but also employees from customer service and marketing. Through this approach, the team can understand how a product functions, how customers will interact with it, and ways to market that product to potential buyers.

Event-planning companies can also benefit from establishing cross-functional teams. In an event-planning company, a cross-functional team could include members of marketing, customer service, finance, and even operations. With this diverse blend of employees, the company can get an idea of how an event will perform from all angles, ensuring no stone is left unturned and no action item is left unchecked.

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There are many benefits of building cross-functional teams, including better communication and improved efficiency. These kinds of inclusive partnerships can do a lot to help your company grow and succeed.

Let’s look at a few ways cross-functional teams can improve your company's operations as well as the morale of your employees.

Promote organizational goals

It's too easy to keep a single-minded focus when working in your own department. However, when you are a member of a cross-functional team, you'll have a greater chance to think about the big picture.

Cross-functional teams involve employees with different points of view who can promote the goals of the organization and think of new, innovative ways to propel the company forward.

Improve communication

Bringing together employees from different departments and with different skills can lead to better communication, not only within the cross-functional team but the company in general.

These team members can work together to identify new solutions and new ways of doing business, even as they hone in on the best ways to communicate complex information.

Increase efficiency

Efficiency is the ultimate goal of any business. However, it's not always easy to achieve, especially with complicated projects that have a lot of stakeholders.

Cross-functional teams can increase an organization's efficiency by helping a project move to completion more quickly. For example, if you have members of multiple departments on the same team, an action item can get immediate input from everyone involved, without having to wait days or even weeks for someone in a separate department to look at it.

Enhance innovation

According to McKinsey, innovation is the key to driving growth and beating the competition. Innovation isn't always easy, however, with so many daily challenges and goals to address. 

Cross-functional teams are one way to enhance innovation. By combining different viewpoints and drawing from a wealth of knowledge of team members from different departments, organizations can increase innovation in processes and products.

While cross-functional teams can work for almost all organizations, there are some potential drawbacks to consider.

Lack of clear goal

Without a clearly defined purpose and key parameters, cross-functional teams can flounder or struggle to get aligned.

Encourage proper organization within your cross-functional team and allow your employees to create a series of objectives and goals they can work toward. This will help keep everyone on track and focused on the end goal.

Conflict and tension

If you group together dissimilar personalities, conflict or tension can surface. Power dynamics can be a concern in cross-functional teams, particularly if the team includes several strong personalities.

Safeguard against stress and frustration in cross-functional teams by encouraging professionalism and clarity at all levels. A culture of collaboration and communication will help employees feel comfortable taking their concerns to a manager, as they know their problems will be addressed.

Developing an effective, efficient cross-functional team isn't easy and can take time.

Establish ground rules

To create a team that allows everyone to shine, set some ground rules or key operating procedures.

This could include specifics about how team members can share their thoughts and ideas, as well as information about project management and communication tools. Get feedback from those team members as well, either through a survey or poll, to see how they prefer to share information.

Set clear goals

Establish clear goals to reduce the risk of confusion and keep everyone on track. Defined objectives can also increase your team's likelihood of completing tasks on time.

These goals should be measurable and attainable, with clear steps that show employees how to not only get to the finish line but also check off objectives along the way.

Form a diverse, inclusive team

Include not just new team members with fresh perspectives but experienced employees too. Additionally, ensure your team is diverse in terms of age, gender, ethnic background, and seniority within the organization.

Beyond potential downsides to a cross-functional team, there are challenges associated with cross-functional collaboration.

Lack of trust

There could be a lack of trust between team members, especially if some employees have seniority over others. It takes time for a team to come into its own.

Encourage trust by scheduling team-building exercises and providing plenty of opportunities for communication and collaboration. It can also be helpful to start small, with little projects designed to build trust and get everyone used to each other.

Different ways of working

Every member of your team has a manner in which they work best. For some, it could be frequent meetings and check-ins, while others might work better with a hands-off approach. It's important to embrace everyone's unique working style even while enhancing team efficiency and ensuring deadlines are met.

Consider using project management software in your cross-functional team. Project management software allows you to plan, schedule, and coordinate projects without misunderstandings. Team members can easily refer to the project dashboard to monitor progress, and team leads can ensure everyone stays on track without relying on endless meetings.

Strong leadership is necessary to help a cross-functional team run smoothly and meet project goals. A dedicated team leader should assist in managing the cross-functional team. This leader should be someone familiar with the organization and its processes but not necessarily someone with the greatest seniority. Choose a leader who knows how to let others (and their unique strengths) shine.

There's not just one perfect size for a cross-functional team. The size of your team depends greatly on the breadth of your organization, as you'll want representatives from multiple departments on the team. Many companies opt for cross-functional teams of six to nine people but adjust this based on your company's structure and goals.

Functional teams are comprised of team members who perform tasks specific to their department, while cross-functional teams are made up of employees from multiple departments. Both types of teams can be successful in project completion and can bring unique benefits to an organization.