What are Cross-Functional Teams?

Organizations are constantly iterating their company structures to create more efficient, unified and user-focused businesses. One method that organizations commonly use to achieve these goals is developing cross-functional teams.

What are cross-functional teams?

A cross-functional team refers to a group of people coming together from different verticals of one organization — such as sales, marketing and product — to collaborate on an objective. However, it does not always have to be an intentional, set-in-stone group or goal; sometimes cross-functional teams come together organically. When teams in an organization are described as working “cross-functionally,” it might mean they communicate and collaborate often, making use of each other's different areas of expertise. Cross-functional teams are commonly formed in startups and small organizations where employees tend to wear multiple hats. Similarly, they are often arranged in flat organizational structures, which are businesses that operate with minimal levels of management and frequently encourage employees to move around within the organization. To read more about flat structures, check out this article.

Agile teams

Cross-functional teams and agile teams are terms that are often used interchangeably, though they have some core differences. Agile teams are independent organizational units consisting of all the skills needed to succeed on a project. These teams are often small, long-term and require co-location. On the other hand, cross-functional teams demand less commitment and do not require long-term displacement from an employee’s usual function. One company that makes use of agile team structures often is Amazon.

Why do organizations use cross-functional teams?

The majority of organizations work in silos — in these organizations, for example, sales is only focused on sales, and finance only touches finance — but being too siloed can lead to groupthink and a lack of cohesion across the organization. Working completely independently, teams can start to have their own goals and solutions as opposed to all teams operating toward a shared vision and working together to think of creative ways to problem-solve. Cross-functionality encourages communication, collaboration and diverse thought, which allows employees to operate with mutual objectives and knowledge. It aligns the teams on how to best represent their product and overall, it improves the customer experience.

A real world example:

One example of a company making use of different functions in an organization is Spotify. Spotify has long been celebrated for its algorithm; it uses data to curate an endless stream of playlists for users that are on par with their music taste. Eventually, Spotify started to wonder if its users would be interested in the large amounts of data it had collected about them, and it turned out many users were. When Spotify’s year-end wrap-up Spotify Wrapped came onto the scene it became Spotify’s most viral marketing campaign. But in a climate where many people are wary of tech conglomerates tracking their data, how did Spotify make it cool?

Spotify Wrapped is culturally relevant, visually pleasing and chock-full of data, and to make it work, it required many sub-teams across engineering, marketing, design and insights to make that happen, according to Spotify. Without the copywriters who craft catchy phrases, the design team who create the fun, shareable images, and the marketers who turned Spotify Wrapped into a global campaign, a close look into our listening habits could have easily come across as creepy. Instead, merging these different teams together and leveraging each other’s knowledge allowed Spotify to create an innovative, insightful product that feels aligned with what its audience wants.

Benefits of working cross-functionally

Alignment

Different professions are trained to communicate, analyze and problem solve differently. Additionally, we interface with differing areas of the business on a daily basis. While a software engineer may have built the product, the software engineer doesn’t interact with its users like a customer success manager does, and therefore can learn from them about their audience’s needs. By encouraging teams to work cross-functionally, we are able to learn from each other, ensure that all areas of the business are consistent and bridge any gaps in the product.

Increased efficiency

Forbes states that cross-functional teams enable faster communication and quicker decision making because information does not have to be passed from department to department. Instead all the resources the teams need are in one place, leading to speedier product development.

Creativity

When you put together a group of people who don't ordinarily work with each other and come from diverse backgrounds, it inspires blue-sky thinking. Introducing employees to new ways of thinking and offering insight on different perspectives of the business helps them to break boundaries, take risks and be innovative.

Communication

Greater interdepartmental interaction will help the business have better communication across the board. When correspondence across teams is made more frequent, employees have better knowledge of how other areas of the business function and can better transfer information. By working together we can create a common language used across the organization.

How do cross-functional teams work together?

Research conducted by the Harvard Business Review shows that over 75% of cross-functional teams are dysfunctional, and this is due to either a lack of governance, lack of accountability or lack of clarity. For interdisciplinary teams to work together successfully, certain systems need to be put in place.

Set a goal

First, a team objective has to be put into place. Think of what new product or initiative is being released, what is hoped to achieve from it and when it should be accomplished by.

Assign a group leader

Teams fail because without a project lead overseeing each function and the process as a whole, the team can become siloed. Establishing a leader helps to ensure that the project stays on schedule, that decisions are made and that they conquer communication barriers.

Allocate roles and responsibilities

Next, identify what skills and expertise is needed to accomplish these goals. Is this a problem that sales can help to solve, or will finance be needed? Come to a decision on who is best suited for the team and then define a clear purpose and specific responsibilities for each member.

Communicate regularly

Whether that communication is over Slack or with weekly meetings, frequent communication must be in place in order for the team to share a mutual understanding on decisions, expectations, project updates and new findings.

Stick to the plan

There should be a set schedule and budget in place at the beginning of a project and in order for a cross-functional team to progress successfully they must stay on track.

Want to make your organization more cross-functional?

Organizations need cross-functional teams just like a writer needs an editor. Another pair of eyes brings a whole new perspective to a project and allows you to see what might be missing and communicate your vision more clearly.

One way to encourage transparency in your business and foster interdepartmental collaboration is by creating a free Org chart on The Org. A collaborative team begins with the structure of the organization and when that is made public, it provides context to employees on where they sit in relation to their colleagues and how they can best collaborate and communicate. Here’s how a public org chart leads to increased transparency, better communication and stronger work relationships.