TEAMWORK

Collaborating effectively in cross-functional product team settings

How to build, maintain, and optimize cross-functional teams

Organizations with well-defined functional areas or departments such as an IT department are finding that these functional areas can get in the way of fast-moving projects. So, if you are a startup working on a software product or need to have a startup-like environment where you have a fast-moving project that requires multi-layers of iteration and cross-validation, then you will need to arrange cross-functional teams. Cross-functional teams require a great deal of interpersonal collaboration, cross-training, a common sense of shared responsibility from start to end, and self-management from all team members. In other words, cross-functional teams require members to collaborate rather than work next to each other in silos.

I. Making sense of it all

Team, or work-group

Teamwork is something you’ll hear a lot in large organizations. But what exactly is a team? How do you become a team player? What’s the difference between a team and a work group? Teams carry a couple of key characteristics that greatly improve collaboration and outcomes. In general, we tend to think that if we’re in a group and are working together with others, then we must be a ‘team’, especially when we share a workspace. However, in reality, most ‘groups of people’ that call themselves a team, are not working as one. A team is defined as the accumulation of several interdependent people who possess specialized skills, roles, or resources with a common goal. The most important element of a team is the ‘interdependence’ part, meaning each member is responsible for all other members, bringing specific expertise to a shared task.

In a true team, the project structure is agile and no team member can complete the project goal without close collaboration with others. However, in a workgroup setting, the project is run in a waterfall manner, whereby each member completes a task based on their competencies and then hands off finished milestones to other group members. In a workgroup setting, members are worried about finishing assigned tasks and meeting deadlines and a certain Project Leader will look at the whole product when all individual pieces are collected. However, an actual ‘team’ is interdependent; no individual gets to hand off responsibility to another and everyone works together on a project with a commonly shared goal.

Types of teams

In a team, members need to work interdependently, have a shared sense of purpose, and work together to deliver the product. And depending on circumstances, we can build several different team structures: functional, self-organized, and cross-functional.

• If a product is well-established, regulated, and slow-moving, then a functional team structure is preferred. Functional teams are the most common in organizations where members share a common goal, depend on each other to deliver a product, and work independently to complete their share of the project.
• For small projects such as graphic design for a website or early-stage small startups, self-organized teams are utilized whereby members self-manage, create their milestones and schedules and deliver the product. Due to difficulties in coordination, self-organized teams are no larger than six or eight people.
• Cross-functional teams have team members from many different functional areas, have shared commitments, and generally self-manage. Some team members might act as project managers creating milestones and schedules while contributing to product delivery. A typical cross-functional team recognizes individual expertise, but the main focus is completing the shared work of the team where team members focus on training each other to get better at task performance. The outlook in a cross-functional team is that members view the work not by what they need to deliver, but by what needs to be done for the product as a whole. In other words, cross-functional teams are interdependent and interdisciplinary.

When cross-functional teams make sense…

Cross-functional teams are interdependent because members depend on each other to deliver the product, and interdisciplinary, because members are from different functional areas, therefore, a cross-functional team may not always be the best fit for every organization. For example, a well-established, regulated, slow-moving, or slow-changing product such as a CT scan device would do better under a typical functional team, while in a fast-growing and constantly changing Startup Company where everybody’s doing a little bit of everything to get a product out the door, a self-organized team fits better.

Cross-functional teams are usually a good choice for organizations where some parts of the organization are well-established while other parts need to be fast-moving. In other words, if the organization is working with a fast-moving product within a slower organization. For example the Libra team within Facebook, or a recently IPO-ed startup such as Uber, or within the R&D sections of an established organization that needs to vend off small innovative startups that are luring away their customers.

The key part of being cross-functional is how everyone works together where everyone steps outside their roles and thinks about the best way to deliver the whole product. This might mean project managers doing quality assurance tests, software developers helping project managers in creating delivery milestones, or even having customers on the team, providing direct feedback at times. Also, a key characteristic of a cross-functional team is to make sure that individuals are empowered to make real decisions without outside interventions. If the team has a responsibility to deliver the product, then they need to be empowered to do it well.

Benefits of cross-functional teams

There are generally five reasons why organizations create cross-functional teams.

• Working quickly: in established organizations, teams work on product development, almost, like an assembly line. The marketing team finds customer needs, needs are handed off to the development team for product enhancements, then the quality assurance team tests performed before handing it off to market launch. Each team works on a part of the product and hands it off to the next department. This process takes up a lot of time. Cross-functional teams put everyone in the same team eliminating communication barriers and hand-offs. So if an answer is needed one can just turn their chair and ask the person next to them.
• Dealing with complexity: a closely working team is especially helpful when the product is a complex one with many moving parts requiring more questions and more cross-communication.
• Learn and adapt: most of the time, you need team members to learn, adapt, and improve their competencies. Most problems that team members encounter are due to a lack of skills, which can be compensated for by the functional expertise of other team members and training each other on the job. This means that improvements to the system can be nimble, holistic, and efficient.
• Thinking creatively: ideas that solve problems only come about through diversity, and the functional diversity of cross-functional teams helps ensure creative thinking.
• Closeness to customers: successful organizations do not want developers guessing their customers' needs. Instead, they prefer to have customers actively working with the team, developing the product. The closer the product development team is to direct customer feedback, then the faster, easier, and less costly development efforts will become.

II. Collaborating better

Developing a working team culture

Team culture is the system of beliefs, values, and assumptions that guide team behavior. The problem with cross-functional teams is that team members come from unique perspectives, work cultures that prioritize things differently, and their sets of biases. For example, marketers usually view the product by thinking of the features that will appeal to the greatest number of customers, while software developers want to make sure that the product is well-designed and easy to maintain. Additionally, each member might have their own beliefs or complaints about the other teams or members. Therefore, there is no reason to assume that everyone will have a shared perspective and get along just fine. You shouldn’t even assume that these members will even like each other.

In reality, the real strength of a cross-functional team is that by working together, members cover up each other’s blind spots. Members should not be aiming to convince others that they’re right, instead, they need to be listening to the other members and bringing acceptance and openness to diverse thoughts and criticisms. Successful cross-functional teams integrate different talents into their team culture. The key is to view the team’s diversity as a strength and not a weakness.

A cross-functional team needs to be well-designed. The more the team members integrate each other’s perspectives into decisions, the more successful they’ll be as a team. A good cross-functional team is interdependent, each member should need the other for project completion.

The need for shared goals and commitments

Broad organizational goals don’t necessarily work well for cross-functional teams. A cross-functional team will rely on shared goals along with a shared strategic commitment.

• The goal is the outcome they desire to have.
• Strategic commitment is how they want to achieve that outcome.

For example, an executive might set a goal for the organization to increase market share by 25% and every member of the organization will probably have the intention to make this a reality, but most will probably not have the same shared strategic commitment. The people in marketing might want to increase advertising costs, software development might want to increase the number of features in the product, and the human resources team might want to ramp up customer support people. Each team will have a different strategic commitment, mainly related to their functional areas of expertise.

Cross-functional teams need to focus on a shared commitment to deliver goals. Within a shared commitment environment, every team member should think of the same steps for how to reach that goal. Therefore, before setting the team into the abyss, strategic alignment among team members needs to be made. This might take some time, but it’s a must.

Small is better

Some may think that the size of a team is an indicator of the importance of the project. This can be a big mistake.

• In general, larger teams might come up with more opinions, but that doesn’t necessarily lead to better ideas. Many of the ideas that come out of these large meetings are just the ones from the loudest and most dominant people.
• Moreover, a very large amount of opinions will slow the team down. Often it’s much less expensive for the team to make mistakes quickly than it is for them to make decisions slowly. You want your cross-functional team members to feel empowered and not afraid; it’s okay to be wrong.

If you keep your team small, you’ll be able to make decisions much more quickly and if you make mistakes, then you’ll be able to quickly learn from those mistakes and adjust.

No team meeting should be so large that you can’t feed everyone with one pizza. Stay small, and recruit the most essential team members. Jeff Bezos

Empowerment

A cross-functional team should be empowered to deliver their shared commitment by defining their work and delivery process. Keep these in mind:

• Define the range of authority. The team is empowered to deliver their shared goal, have responsibility for their work, and have the authority to make their own decisions within the scope of work defined for the team. They’re not empowered to direct the work of other teams or to remove team members.
• In the beginning, be very clear about what it means to be empowered. Break the definition of power into short statements with two parts. The first is the power to do what, and the second is the power for what. For example, “We have the authority to create the technology curriculum, “so that we can decide on what to purchase for the fall.” It’s also important to lay out these terms clearly so that stakeholders and upper managers can agree to give this team the power to make their own decisions.

There are a lot of advantages to empowered cross-functional teams.

• Teams that can make their own decisions find it easier to keep everyone engaged and motivated in working together.
• These teams also tend to work much more quickly. They don’t have to wait for people outside of the team to make key decisions.
• An empowered team also has a much easier time accepting new work.

Note that it can be very discouraging when teams that are empowered to make their own decisions are overruled by outside managers. In most cases, the team should make the wrong decision and learn from their mistakes rather than have an outside manager take the power to make the decision away from the team.

III. Knock-out challenges

Managed conflict is good

Conflict could be a great way to hash out new ideas; you want your cross-functional teams to have a diversity of opinions because it’s the diversity of opinions that’s one of the main advantages of a cross-functional team. So don’t suppress this advantage to have everyone get along.

Instead, manage and even value team conflict. Disagree agreeably while at the same time pushing your own opinion.

In general, there are three major challenges with conflict management and cross-functional teams.

• Lack of trust: when there are team conflicts but they’re not dealt with openly, people will gradually become cynical and stop trusting each other to engage in real conversations. When this happens, there’s no reason to have a cross-functional team. A true cross-functional team will be a flat organization within the larger organization. You don’t want the roles and titles to interfere with good ideas. Avoid having managers on your team that create a chilling effect.
• Power and perception: when members want to maintain control over their own decisions and therefore tend to use technical language that others do not understand. This will create communication silos and erode team coherence and performance.
• Culture and practices: ask yourself if your organization is open and welcoming to new ideas. When someone comes up with a new idea, does it stimulate discussion, or is it simply brushed off to the side with a “that’s not how we do things around here…” So before you put too much effort into starting your cross-functional team, have a frank assessment about how the rest of the organization will react. Keep in mind that it’s really difficult to have people break out of the organization’s culture and accept an open and diverse discussion.

Remember that conflict is not a bad thing in cross-functional teams. You can use the power of diverse opinions to come up with some of the best ideas.

Acknowledging cross-functional team characteristics

Understanding some of the key characteristics of cross-functional teams could help eliminate some incorrect mindsets that may drive team conflicts.

• Each team member should have extensive domain knowledge. Members should also be able to answer questions without sending an email or getting back to the team later.
• They should be open to new ideas. Each team member in a cross-functional team is both a teacher and a learner. No member should push for their ideas, and be unwilling to hear ideas from others.
• They should always be able to ask and answer critical questions. Members shouldn’t be afraid to push back when there’s disagreement. That’s why it’s important to ask critical questions. A critical question encourages discussion about key ideas. It addresses how the idea holds together. If you can’t answer the critical question, then it means that the whole idea might fall apart. A critical question forces people to explain their ideas. It encourages the team to have a discussion.
• They should have an overall view of the product. From a range of different angles and areas of expertise.
• They should embrace the team’s diversity. . Remember to try and listen to what other team members are saying
• They should be very comfortable working with the customer. Customers help the team decide not just what they can deliver, but what they should deliver. Even the best-designed product will just sit on the shelf if it doesn’t provide some key value for your customer.

Cross-boundary bridging

All cross-functional teams exist in a larger organization and therefore success depends on working with other groups and teams. There’s a boundary between a cross-functional team and other moving parts of the organization which need to be managed. Some call this boundary management while others call it bridging. It’s where your team’s practices and the rest of the organization meet.

Cross-functional teams need to think about how to coordinate and align their work with the rest of the organization delivering their product in a way that works with the rest of the organization. If you can’t bridge your work to the rest of the organization, then it won’t take long for other managers to start questioning the effectiveness of your team. If you think about this bridging from the very beginning, then you’re more likely to have the right people in place to gather information and manage the team’s coordination.

Cultivating a learning atmosphere

Once the team sets its direction, it still needs to go through the difficult process of delivering its product. Each team member needs to understand the whole product from the perspective of marking, software development, HR, etc., and that will require members to have a general understanding of a wide area of functions to deliver. And that is why every cross-functional team should be a small community of learners. Everyone on the team should always be teaching or learning from someone else on the team.

In general, there are three main areas of learning.

• Interpersonal learning. This is learning how to be a better communicator, teacher, and listener. This is one of the most challenging things to learn. Most team members are used to working within their functional area. They might not be used to dealing with strong disagreements or having someone question their decisions. It’s difficult to learn how to ask critical questions. It’s also difficult to learn how to communicate with someone when they disagree.
• Organizational learning. This is learning about customer requirements or some of the nuances of different functional areas. In some ways, this is the easiest of the three. Most cross-functional teams pick up on the organizational challenges in different functional areas.
• Technical learning. This is picking up direct skills from other team members. This is when you’re picking up practical skills from other team members. A database engineer might have to teach a marketing person a little bit about different data types. That way the marketing person can suggest new fields in the database without having to depend on the engineer. Try to stay curious about these other areas and be patient when you’re teaching others.

IV. Getting the most out of the team

Tricky performance evaluations

Shared commitment of cross-functional teams makes it difficult to stand out as an individual player and it’s not easy to figure out who’s the strongest rower. It might be one person or it could be a combination of several people. And what makes it even more complicated is that managers don’t evaluate the whole, they evaluate individual employees. At best, this can lead to a lot of guesswork and intuition, and at worst, it can be damaging to the team.

One approach used to evaluate cross-functional teams is appraisals whereby each team member creates a performance appraisal for all the other team members. They don’t appraise whether or not they’re good at what they do but appraise whether or not they’re working well with others. Then each functional manager gets a copy of the appraisals. It’s a 360-degree peer valuation, which then gets reported to the manager for a final evaluation.

Remember that performance appraisals typically reward individual contributions. They encourage team superheroes. That’s the opposite of what you want in a cross-functional team. Be careful to emphasize your team's performance over individual reviews. You want everyone to have shared goals and not celebrate individual superheroes. When you meet your goals, it should be seen as an achievement for the whole team.

Leadership

Typically a leader is someone who commands a group of people. They can do this directly by telling people what to do, or they can do this indirectly by trying to get the best out of other people. Either way, this person is elevated creating a tricky position for most cross-functional teams. You want the team to work together, have shared commitments and shared goals, be flat and empowered, and managers, developers, and customers all work together and share ideas. It can create a lot of team imbalance to have one person standing above the rest of the team with a slightly more weighed and likely to be accepted opinion. This might make members feel that their ideas are less important. On the flip side, some other people might look to a leader to take responsibility for the team.

In a cross-functional team setting, you have to take a much more practical view of leadership. It’s better to use some of the same practices that are used in large educational institutions. Many universities create a temporary leadership position called a department chair. Typically this person doesn’t have leadership aspirations and only wants to be part of the service to the department because they know at the end of the term they’ll go back to being a regular member of the team. These department chairs spend most of their time gathering resources, resolving team conflicts, and helping the team clarify their shared goals. The reason that many academic institutions use this model is they know that powerful leaders can often disempower the rest of the team. When working in a cross-functional team, you want everyone to participate in delivering on the team’s shared commitment and that’s why the leaders that often work the best in these teams closely follow this temporary leadership model.

A good way to start is to have the cross-functional team vote on a temporary team leader. Like a department chair, this leader should focus on gathering resources and empowering others. They should also agree on the length of their term. Once their term is up, they should return to being a regular team member and elect a new leader. A good leader should be exhausted at the end of their term. It’s a difficult job to gather up resources and resolve team conflicts.

Bringing and managing change

In traditional organizations, we rely on a lot of commands and control creating management structures and functional silos. Cross-functional teams cut through these silos creating horizontal teams that break through vertical hierarchies, cutting across several different layers of management. Hence, for most established organizations, cross-functional teams are a significant change as it blurs their areas of responsibility for previous managers. That’s why middle managers can be the biggest obstacle to creating cross-functional teams, as they will impose uncertainty on their traditional organizational roles. That’s why you have to be careful to work closely with managers.

From the very beginning, executives have to create a clear path that shows how these areas of responsibility will change. One approach executives can take is to change the overall structure of the organization. Setting up cross-functional teams is a large organizational commitment to move away from silos into more of a team-focused approach. A team-focused approach will prioritize three key areas.

• It will start by encouraging top managers to break down organizational barriers. Functional organizations have been around for years and it’s not easy to think about workable alternatives. These changes won’t happen quickly, but some of the first steps are to question and understand the downside of working within this structure. Management should give their teams the freedom to think about different ways of working.
• It will start to eliminate the competition for resources among departments. Usually, when teams struggle for resources, it only solidifies the feeling of us versus them. This is exactly the type of behavior you want to eliminate when you’re trying to create cross-functional teams. Managers should work hard to give resources directly to teams. That way, they can focus on what they need to deliver the product.
• It will develop new team-based incentives for compensation, promotion, and performance evaluation. Managers should try to create a team-based system of promotions and compensation. That way, individual team members won’t try to outshine one another.

Challenges with newly formed cross-functional teams

There are a lot of advantages to cross-functional teams, but change will not be easy. It’s a large organizational change that has many moving parts. You have to start by changing your organizational culture and then change a lot of the areas of responsibility for middle managers. There are four main challenges that you want to keep an eye out for when working on cross-functional teams.

• The perching manager: This is the functional manager who comes to your meetings as a way to keep an eye on things. Typically, they’ll answer emails on their smartphone or open up their laptop or just sit and try to absorb the overall status of the project. The manager’s doing this because they haven’t quite accepted a team-focused approach to delivering a product. The best way to get rid of a perching manager is to work together as a team to deliver regular status memos. You also might want to try scheduling your meetings during times when the manager can’t attend.
• The impatient teacher: This is typically a longtime technical employee who’s not used to explaining their decisions. They might be hostile when you ask them to explain key concepts. When this happens, you might want to try a technique called amplifying. It’s when another person re-asks a question that was left unanswered. So, if one team member asks a question and it’s unanswered, another team member can just re-ask the same question differently.
• The talent death spiral: That’s when one functional manager pulls out their top person and then another manager realizes that this key person is no longer on the team and so they pull out their top person. The talent from a team is pulled out one by one until the whole team is left with people who don’t know very much about their functional area. When this happens, the best thing to do is to enlist the help of your team’s champion to resolve the conflict.
• The restless superhero: These are team members who just want to finish key challenges on their own. Work with the interim team leader to help get this person to think about delivering as a team.

Cross-functional teams can be a terrific way to deliver your product and its members get to work together in a way that’s often difficult in other parts of the organization. After working on a cross-functional team, some team members might not want to go back to working in their functional areas while others might find the communication and constant learning to be too difficult. Just remember that there’s a big difference between cross-functional teams and a typical workgroup. If you find that you’re not doing things that much different than before, in your functional work groups, then you’re probably not working in a cross-functional team.

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