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Perhaps you work in a large company, and every day when you ride the elevator up to your floor, you wonder what all those people do who exit on the floors before and after yours. Or, maybe you’re at a smaller business, but it’s not until a company get-together where you talk to someone with a different job that you realize how little you know about their work-related specialties, goals, and concerns.
If so, you’re not alone. Traditionally, most companies have been built around functional departments: people with the same skill set -- sales, marketing, design, production, and so on -- being grouped together in so-called “silos” of expertise.
While silos are great for storing grain, they can limit an organization’s operational effectiveness due to a lack of communication, shared goals, and collaboration. To address those issues, cross-functional teams (CFT) can be deployed in businesses large and small to increase innovation, improve communication, and accelerate project results.
Simply put, a CFT consists of people with different skills and from different departments working together via team collaboration on a shared project.
The first use of CFTs in the U.S. occurred in the 1950s. The CEO of The Northwestern Mutual Life insurance company brought together people from multiple departments, including actuarial, financial, and investment, to study the impact computers would have on the business world.
As a result, Northwestern was one of the first corporations in the country to create an information systems department. Doing that gave it a significant competitive advantage as the use of computers steadily increased, and since then, the company has continued to rely on cross-functional teamwork.
You do not have to be a giant corporation, however, to benefit from CFTs. In fact, smaller companies and startups likely use an informal version of CFTs as everyone probably wears multiple hats each day. That means it’s even more important to understand the benefits of CFTs and the strategies for their successful implementation.
Every business needs to maximize its resources, people, materials, time, for the greatest return on investment (ROI). While there are multiple, specific advantages cross-functional collaboration can provide, the benefits can be grouped into three overall categories:
Products and processes are the two areas where companies typically seek to innovate. Whether your product is material- or service-based, you always want to be working on the next best iteration of it. In addition, you must constantly be improving your internal processes that either directly produce or support the production of your deliverables.
CFTs can do this in ways that functional teams simply cannot. First, by bringing together team members with different areas of expertise, you gain high level insight from multiple perspectives at the same time instead of going through each organizational silo, one by one.
In addition, team members have the opportunity to experiment with multiple combinations of their own skills with those of their teammates to achieve optimized workflow. This can produce results far beyond those of functional departments working on their own.
Every department organically develops its own jargon and shorthand for efficient communication. This can also lead, however, to organizational isolation and less effective cross-company dialogue: “We know what we’re talking about here, but what are they saying over there?”
CFTs quickly break down these communication barriers. By definition, teammates will become familiar with each other’s terminology, and each team will inevitably develop its own set of terms. Instead of existing in isolation, however, this shared vocabulary from cross-functional communication will eventually be transmitted throughout the company as your cross departmental team members return to their own work groups or go on to new CFTs.
Producing improved deliverables and enhancing company-wide communication are critical goals to achieve. Then again, the success of a business comes down to one fundamental key performance indicator (KPI): unit sales.
That means you always need better results faster.
This is where CFTs are potentially most powerful, speed. By breaking down organizational silos, products and processes can be developed more quickly as team members with different skill sets collaborate simultaneously.
Plus, improving communication within CFTs as well as your company overall will allow for quicker application of your teams' results.
While the results produced by CFTs can be transformative, their success is not guaranteed. In fact, a 2015 Harvard Business Review article estimated that 75% of these teams are dysfunctional for reasons as simple as not being able to stay within budget or meet a schedule.
That’s why the five strategies below are essential to successfully implement your CFTs and have control over the project management process.
Before a CFT is put together, the first thing to do is to clearly establish what you specifically want to accomplish.
Do you want a new product design that improves performance? Do you want to reduce the number of steps in a manufacturing process? If you’re not explicit up front about the end goal, your CFT will lack direction and focus from the outset.
Every project has three elements that must be clearly identified up front: scope, what needs to be done; time, how long will it take; and resources, people and materials.
To increase the odds for success, each team needs effective cross-functional team leadership for the duration of the project. To do that, select an end-to-end team leader. Otherwise, valuable time can be lost as team members jockey for control or engage in finger pointing when upper-level management has questions about what is or isn’t going on.
An effective team leader will be able to delegate tasks, mediate discussions and problems within the team, adhere to the project schedule, and be an advocate for the CFT within the rest of the company.
Just as choosing the right leader is critical, so is selecting the rest of the team members. You need people who are as skilled at working cross functionally as they are with their technical skill sets.
The strength of CFTs is the collaboration achieved by people with different skill sets. At the same time, you also want to optimize your team’s size for maximum efficiency.
Every team must employ effective communication strategies. After all, you want everyone to have enough time and space to get their jobs done without trapping them in seemingly never-ending meetings.
If you must have formal meetings, limit their number as much as possible. Instead, explore other options to keep everyone informed about what is going on.
To make sure your CFT is staying on track and making progress requires ongoing assessment. This isn’t just to identify problems but to also discover what’s working well, so you can replicate those efficiencies.
You don’t want your CFT leader consumed with writing endless evaluations or team members submitting constant progress reports at the expense of making actual progress. Like most things related to project management, it’s the Goldilocks principle: neither too much nor too little but just the right amount.
Functional teams, grouping people with the same skills together, have been the default choice for building teams in the past, but many times they don’t produce the best results. You may meet some internal resistance when putting together your first multifunctional team.
After all, change is hardly ever welcome, but CFTs will be worth the effort, even if you need a formal change management plan.
What seems to be your most intractable problem? What project doesn’t seem feasible using the team structure you’ve relied on in the past? Put together a CFT using the strategies above and you could find yourself with a real advantage over your competitors who are still stuck in organizational silos.
Our Small Business Expert
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