What are Cross-Functional Teams? How to Build One

Cross-functional teams are groups that bring together employees with different areas of expertise to work towards a common goal. Developing a cross-functional team successfully involves organising the group to take a cohesive approach to projects. Organisations in many industries use cross-functional teams to increase their success and efficiency. The benefits of this type of team depend on the skills and backgrounds of the team members.

Keep reading to know more about cross-functional teams, why they’re essential, and how they can benefit.

What are Cross-Functional Teams?

Cross-functional teams consist of people from different departments who work together towards a common goal. A cross-functional team emphasises communication and collaboration to reach organisational goals, regardless of individual roles.

Cross-functional teams are often organised to complete a specific project. These teams exist from the project’s commencement until its successful completion. However, some companies have a different approach and prefer to organise their workforce into permanent cross-functional teams rather than following the traditional hierarchical structure that separates professional disciplines.

Importance of Cross-Functional Teams

Cross-functional teams are essential for the following reasons:

• Cross-functional teams break down the silos of a traditional organisational structure, enabling team members to see the big picture and work towards a shared vision.
• Overlapping skills can contribute to more efficient problem-solving and lead to creative and innovative ideas.
• In smaller organisations or non-governmental agencies without an extensive support system, cross-functional teams provide essential work for mission success.
• These teams can handle various tasks and responsibilities, from planning and strategy development to implementation and execution.
• By working together, team members can leverage their diverse skills and expertise to achieve the best possible outcomes for their organisation.

Purpose of Cross-Functional Teams

Companies use cross-functional teams to improve productivity and efficiency. These teams are expected to be high-performing, meaning they can deliver better results quicker.

The idea behind cross-functional teams is to bring together employees from different departments with a stake in a project. By working together in a single unit, they can effectively address the project’s requirements without passing it from one department to another. This eliminates the repetition and the need for revisions that arise in traditional team arrangements.

In contrast, in traditional team arrangements, a project moves through various departments for input and review linearly, leading to delays and inefficiencies. Cross-functional teams are designed to overcome these challenges, making them an excellent choice for companies looking to improve their performance.

Benefits of Cross-Functional Teams

The benefits of a cross-functional team are as follows:

1. Use of Multi-Directional Approaches for Task Completion: Instead of being hierarchical, intra-team dynamics tend to be multi-directional. Team collaboration is improved through interactive processes.
2. Gain of Information with a Broader Scope: Cross-functional teams require access to diverse data to make well-informed decisions. Since each team member represents a different department, they can use their knowledge to help the rest of the team access and understand that department’s information. This makes cross-functional teams more efficient by reducing the time spent gathering information.
3. Gain of Information with More Depth: Cross-functional teams require information from all levels of management. The groups may have been formed to make primarily strategic, tactical, or operational decisions, but they need all three data types. Almost all self-directed teams require traditionally utilised data to make strategic, tactical, and operational choices.
4. Enhanced Employee Engagement: When team members share a common goal, they are more likely to collaborate and communicate effectively with one another. Individuals who enjoy spending time with their colleagues are more satisfied and engaged in their work and are less likely to consider leaving their jobs. Therefore, team leaders must foster a sense of shared purpose among team members to promote effective collaboration and boost job satisfaction.
5. Enhanced Collaborative Culture: A cross-functional approach naturally encourages a collaborative atmosphere because it brings more team members together, regardless of department. Improved communication skills are achieved through shared decision-making, regular team building, and working towards a common goal at organisation the organisation.
6. Great Range for Learning and Development Across Departments: Cross-functional teams consist of employees from different parts of the company who need to understand various types of information. It’s essential to simplify technical language, prioritise important information, simplify complex data, provide interpretations of findings, and explain complicated concepts to ensure everyone can comprehend the information presented.

Downsides of Cross-Functional Teams

Cross-functional teams may limit individual member growth and flounder aimlessly if projects are too broad or poorly defined. Organisations can use limited terms for members and implement agile project management frameworks to prevent this. Effective compensation systems can also minimise potential downsides.

Developing Cross-Functional Teams

You can develop a cross-functional team by doing the following:

1. Identify the Skills and Expertise Needed: To build a cross-functional team, determine its purpose and frequency. Identify the necessary skill sets such as sales, finance, development, and IT. This approach helps small businesses hire employees with the required skills, and large organisations test their ability to work in cross-functional teams and scale workflow.
2. Choose the Right Personalities: To create an effective cross-functional team, as a manager, you need to find individuals capable of working well in a collaborative environment. It is essential to look for candidates with the following qualities:
   1. Good Collaboration Skills: Cross-functional teams heavily rely on a collaborative approach to projects, so team members must be able to work closely together.
   2. Strong Communication: Effective communication is crucial for cross-functional teams to provide feedback, discuss projects and tasks, navigate changes, resolve conflicts and solve problems.
   3. Diverse Skill Set: Employees with experience and understanding of several departments are well-suited to a cross-functional team that handles tasks typically sent to multiple departments.
3. Select Quality Leadership: Cross-functional teams need a leader who understands each speciality’s contribution and addresses daily organisational needs while reporting to management. Choose someone prepared to overcome communication barriers, maintain workflow, and complete tasks. The leader should have excellent organisational skills and define the project’s action.
4. Clarify Each Team Member’s Purpose: To avoid duplication of work in complex cross-functional teams, initially define each member’s role and overall goals. Be prepared to adjust to any significant changes as roles may evolve.
5. Develop a Team Charter: Make a charter outlining essential specifications for the team’s operation. This charter includes the following groups:
   1. Purpose
   2. Objectives
   3. Roles
6. Essential Responsibilities: Although management can create this charter independently, working with the team leader to determine their leadership and management responsibilities can be beneficial. Alternatively, the charter can be developed collaboratively with all team members to ensure everyone comprehends the guidelines.
7. Set a Budget: To ensure effective use of resources, cross-functional teams should know their allocated budget. Hold a meeting with the team to discuss budget allocation. Keep the team informed about any changes to the budget. Transparent budgeting boosts productivity and reduces expenses.
8. Create Project Schedules: Project schedules are crucial for completing tasks within deadlines and increasing efficiency. Work with the team leader to set realistic deadlines and markers and adjust plans. Tasks can be completed simultaneously in cross-functional teams, and communication protocols can be established. Use SMART goals that are specific, measurable, achievable, relevant, and time-based. Reevaluate and refine your approach if you’re not meeting your quantifiable goals within the established time.
9. Establish Lines of Communication: Effective communication is critical to any successful team. Establish clear communication channels at the beginning, assign a preferred means of communication, schedule regular meetings, and define conflict management strategies. The leader should maintain these channels during the project.

Cross-Functional Team Management

Cross-functional teams, despite having decision-making authority, still require appropriate management. It is essential to have management that can work across departments and prioritise the team’s success over any one department’s interests.

Organisations must establish strong governance with high-level leadership to ensure the success of cross-functional teams. This leadership can be a single executive or multiple leaders from the functional areas represented on the team. They must oversee the team’s progress, hold accountability for its success, and ensure it has clear goals, realistic schedules, and adequate resources.

In addition to appropriate management and governance, several other key components are necessary for cross-functional teams to succeed. These teams must clearly understand the project’s goals, objectives, and scope. They also need strong communication skills to break down functional silos while effectively conveying the perspectives and requirements of their respective areas of expertise.

Cross-functional teams also need adequate autonomy and an independent decision-making process. They must have authority over required resources to access them when needed to achieve their objectives. By establishing these necessary components, cross-functional teams can succeed in fulfilling their mission.

Examples of Cross-Functional Teams

Some examples of cross-functional teams are as follows:

City Planning Team

A city planner team collaborates to develop zoning laws and safety regulations that benefit the city. Each team member brings unique skills and expertise to the table, working towards creating better codes and regulations. The team may consist of architects, engineers, policymakers, and community members, all of whom contribute specialised knowledge and ideas to the project.

Marketing Team

When planning marketing campaigns, various marketing team members may collaborate to leverage their unique skills and help clients develop effective strategies to reach new or expand existing markets. The team may comprise different roles, such as researchers, public relations experts, production specialists, and account executives.

Internal Audit Team

Executives often rely on internal audit teams to review the financial health of their organisation. Each team member may possess skills contributing to the audit process’s different aspects. The team typically comprises accounting analysts, financial auditors, management accountants, and internal auditors.

Data Science Team

Data science combines several analytical disciplines that help companies create effective strategies and improve their internal operations. A data science team may have members with different levels of expertise, such as data collection, predictive model building, result interpretation and process supervision. The team generally consists of engineers, mathematicians, computer scientists and statisticians.

Investigative Team

Law enforcement often employs investigation teams to solve significant crimes like murders. Each team member has unique skills and handles different aspects of the investigation. The team may consist of experts from various fields, such as crime scene investigation, forensics, and detectives. Together, they work towards the common goal of solving crimes.

Intelligence Team

A risk manager may consider forming an intelligence team comprising members from various fields for their department. This approach can help them collaborate more effectively in understanding information or identifying potential threats to their organisation. The team can consist of experts from cybersecurity, IT, intelligence analysis, and global intelligence operations who can bring their expertise to the table.

Tips to Remember

Some things to remember while making a cross-functional team are:

• Ensure Diversity Within the Team: Diversity is crucial for cross-functional teams. The more diverse the group, the more effective it is at achieving its goals. This means having a mix of people in age, status, background, viewpoint, gender, race, and tenure.
• Include Influencers: For a successful cross-functional team, include influential members from various departments who can effectively communicate the team’s objectives to the organisation.
• Set Clear Goals for the Cross-Functional Team: Clear goals and specific deadlines increase the likelihood of meeting project objectives. Project management tools can aid in keeping the team on track and communicating progress.
• Reinforce the Team’s Authority and Discourage Hierarchies: To ensure a productive and diverse cross-functional team, members must respect each other’s authority over the project and reinforce their goals. Organisational leadership should discourage hierarchy within the group so that members with less experience feel safe sharing their viewpoints.
• Encourage Positive and Healthy Conflict Resolution: Cross-functional teams are more likely to experience conflicts due to their diverse views, knowledge, and expertise. Leaders can minimise the negative impact of conflicts by arranging conflict resolution training and fostering communication through team-building exercises and personal connection opportunities.

Conclusion

Cross-functional teams are a powerful force in the modern workplace. They drive innovation, foster collaboration, and deliver tangible results. By embracing the diversity of skills and perspectives within these teams and implementing effective management strategies, organisations can unlock the full potential of cross-functional collaboration.

Frequently Asked Questions