Cross-Functional Team

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Cross-Functional Team

What is a Cross-Functional Team? Meaning.

A Cross-Functional Team (CFT) is a group of people whose members hold different backgrounds, expertise and functions working toward shared objectives. A Cross-Functional Team is also known as a Multidisciplinary Team or an Interdisciplinary Team.

For example, a CFT can be constituted by people from Sales, Marketing, Finance, Engineering, Procurement, Design, Customer Services, etc...

Note that team members can also differ on many other dimensions (besides their discipline or function), such as age, gender, ethnicity, religion, culture, personality, beliefs and attitudes.

History of Cross-Functional Teams. Origin

In the second half of 20th century, changes in the business climate imposed new rules for business organizations. The focus changed to teamwork, flexibility, Empowerment, network, information. In this new context, cross-functional teams are replacing traditional Functional Teams. Although their boom is relatively recent, the concept itself is not new. In fact already in 1950 an American Insurance Company, Northwestern Mutual Life, is reported to be one of the first organizations that used a cross-functional team.

Usage of Cross-Functional Teams. Applications

CFTs are getting popular in many organizations as a means to boost innovation and creative decision making. Sometimes, for special projects where information is shared through more than one player of an industry value chain, cross-functional teams can be formed by people of different companies such as clients, suppliers, external consultants, and representative of public stakeholders.

In some companies cross-functional teams became the primary organizational structure while in others, they can exist in addition to the organization's main hierarchical structure. Typically CFTs are temporary and assembled and dismantled according to a project needs.

Generally a particular CFT is not suitable for all types of project, since its composition of members should vary depending on the nature of the project.

The aim of this type of people clustering is to boost diversity, as it enhances creativity and social collaboration, and to make sure that the various departments of an organization have a say in a project.

Cross-Functional Teams can also be used for downsizing and cost-cutting strategies, to integrate and implement new technologies throughout an organization, to improve the service-profit chain, etc.

A  common application of cross-functional teams is in design and new products development, since both processes are based on creativity and need input from a wide range of skills and perspectives. The diversity and simultaneous collaboration brought by CFTs resulted in reduced product development time and Time to Market and allows more flexible adaptation to market changes.

Cross-functional teams can also be created to: integrate and implement new technologies throughout an organization; improve the service-profit chain, decrease product costs.

Cross-Functional Team Best Practices

Research from Elisa Fredericks, published in 2005 by Emerald, revealed 3 key tips for successful cross-functional teams (in NPD):

  1. Organize pre-project meetings, so that project members can socialize before the real project starts.

  2. Set formal procedures to ensure and monitor involvement of all members throughout the product development process.

  3. Make sure from the beginning that all members understand the NPD process, project goals, roles, responsibilities, and tasks throughout the NPD process.

Imperative to the success of CFTs are also:

  1. Members must be open minded and highly motivated, more than in a functional team.

  2. Each team member must come from the appropriate function depending on the nature of a project.

  3. A strong team leader with excellent communication skills.

  4. A CFT has to be provided with the authority, support and resources needed to accomplish the project goals.

  5. The whole is bigger than the sum of its parts. P. Doyle argues that successful CFTs embed skills that no individual may have.

Implementing Cross-Function Teams

Implementation Tips for Cross-Function Teams:

  • Think carefully about the task and the skills it requires.

  • Identify those around you who have those skills, capabilities and the enthusiasm to tackle the project.

  • Choose what kind of personalities should be present in a team (Belbin Team Roles). Consider also how well team members can work together.

  • Learn About the Stages of Team Formation.

  • The implementation of cross-functional teams in an organization is frequently subsequent to organizational changes, or it is itself an Organizational Change. As such it is often feared by those who were used to work in a functional team.

  • Manage eventual conflicts that may arise for variety of reasons. Typically, people who are ranked higher in the organization chart tend to be more authoritative even if they have marginal roles in the cross-functional project team, generating conflicts. Disregard the rank of each member as far as CFT activities are concerned. Provide team members with conflict resolution training.

  • Put team members together on an daily basis to strengthen communication processes within the team.

  • Set goals of the cross-functional project team. This will help reducing conflict generation.

  • Assign responsibilities and make sure key interdependencies among team members tasks are clear for all, so that the project cannot be stuck because someone cannot proceed with his tasks.

  • Make sure all project stakeholders are (equally) represented in the team.

  • Ensure that goals and priorities of the cross-functional project team are shared by all functions of an organization, to avoid obstructions from department that may feel threatened by the new project or new working practices.

  • Work closely with customers. Try to invite customers to attend some meetings, or even to join the team. If it is not possible to physically host a client representative, you can appoint a member to act as customer.

  • Agree on involvement level of each team member. Some may work more in certain project phases, i.e. start-up or closure, others may last for the whole project.

Limitations of a Cross-Function Team. Disadvantages

  1. Extra pressure on CFT members due to having multiple assignments. Often their role within the organization can conflict with their role in the CFT.

  2. Extra pressure on CFT members due to management request for high performance, the importance of the project, being in new territory / new competencies, having to convince the current organization of new ways of working.

  3. An organization’s departments or functions might compete with each other, turning members into enemies, leading to a poor performing CFT.

  4. In their 2002 research, Cross-functional teams: Good concept, poor implementation, John W. Henke, A. Richard Krachenberg and Thomas F. Lyons found out that even though there is an exhaustive positive literature on CFT phenomenon, its practical implementation in many companies has not shown many significant results, apart from those in New Product Development.

  5. CFTs can limit the professional growth of team members as they remain focused on very narrow areas restricted to a single project. Also working for the same project for a long time can be boring. This point is controversial: CFTs supporters argue that to grow professionally, a CFT experience is needed for any business leader.

  6. If the project scope is too wide, CFTs may be the wrong solution.

  7. Not respecting classic project rules and best practices such as fixing deadlines and interim reporting may result in poor performance whatever the composition of a project team is.

  8. A traditional Performance Appraisal and individual compensation system may not work to motivate members of a CFT. To partially overcome this limitation, team incentives have been created: however employees often don’t rely on this type of incentives as they feel they have little control over the team results. Some CFT members may have the feeling the company is asking more from them without giving an appropriate direct reward back.

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