Introduction to Cross-Functional Teams
The first post in ChaiTime's paid-subscriber series on Cross-Functional Teams
Hello and welcome to the first of my quarterly in-depth series for paid subscribers!
Every quarter I plan to do a deep-dive series. These series will be full of new concepts and practical tips. I plan to spend a lot more time on these posts than my regular posts to create quality content for my paid subscribers. If you are not yet a paid subscriber, I’d love to invite you to consider joining ChaiTime!
Back to this series topic - Cross-Functional Teams!
Cross-functional teams are rapidly becoming the norm in most mid/large-sized businesses to solve complex problems. They facilitate rapid connections between different departments in a large organization and can help land impactful projects faster.
If you have been in the tech industry for at least 2-3 years and are in a mid/large-sized company, chances are that you will be a part of a cross-functional team at some point very soon if you haven’t been in one already! Learning how to participate and lead in such an environment can really boost your career.
During my MBA I did an independent study with Dr. Homa Bahrami on the topic of cross-functional teams. My study consisted of 3 parts:
Deep literature review of several papers and books.
Empirical study consisting of a quantitative survey of 100+ industry professionals, most from the tech sector. I also did in-depth interviews with 30+ industry professionals (again tech dominated).
A personal journal where I reflected upon my own experiences as a participant in and leader of cross-functional teams. I connected these reflections back to the literature review and empirical study in my journal entries.
This study yielded some very interesting insights, many of which I have personally applied to my day job with great success! I also spoke about this study to 500+ attendees over 7+ talks so far to MBA students and industry professionals - most attendees found the content valuable for their jobs as well.
In this series I’ll share all my learnings about cross-functional teams with you.
Here is a brief roadmap of how this series will look:
Today we will cover the basics of cross-functional teams and dive into reasons why they are so attractive for businesses.
Over the next three days we will cover the barriers to success that cross-functional teams face. I classify these as Skill, Will and Hill gaps and we’ll talk about each of them.
On the last day I’ll share a key ingredient that all cross-functional teams need. We’ll discuss frameworks to build it.
So… let’s get started!
Why Cross-Functional Teams?
Reason 1: The VUCA World
The business world these days is often described as the VUCA world. VUCA is an acronym that stands for volatility, uncertainty, complexity and ambiguity. In a dynamic environment, some business challenges need faster responses. But, traditional top-down and stable team structures are too slow.
Cross-functional Teams are perfectly suited for this world! You can set them up as needed with experts from different fields across the company. Once they achieve their goals (or are no longer necessary), they can disband.
Reason 2: Organizational Decision Making
One of the papers I reviewed during my study (Henke et. al.) had a very interesting conclusion. The paper authors argued that firms like Matsushita and Sony in Japan, and Apple, Polaroid, and IBM in the US, were initially successful solely on their founders' vision and drive. Now, in their second or third generation of leadership, they need to shift from reliance on individuals to organizational decision-making.
Cross-functional teams are a great tool. They can quickly and fairly make large-scale decisions across big companies. In this case, the team is an "experts panel." They will study the problem from different angles and recommend a solution to the CEO.
Reason 3: Versatility
My study found the top reasons for businesses to set up cross-functional teams:
The data shows that cross-functional teams solve problems in every area, from product to sales, operations, and even HR. A good category of business problems cannot be solved in a single department. They need collaboration across departments in a company.
In addition,
About 76% of the responses in my study picked more than one reason for the existence of their cross-functional team.
This also points to the versatility of cross-functional teams. This appeals to companies because cross-functional teams can yield a higher ROI than traditional teams due to their versatility.
Reason 4: Diversity
By nature of their construction, cross-functional teams have a diverse talent pool. This gives them an edge over traditional teams that might be more homogeneous (e.g. a team of only engineers or only product managers) when tackling complex problems.
This trait of cross-functional teams is so popular that some companies, like design firms, organize entirely as a cross-functional team. One such company we visited during my MBA was able to work in multiple industries with this structure. Each team member had different expertise but they worked together to find innovative solutions to problems.
Reason 5: Adaptability
The book Team of Teams was one of my reference books during my independent study. Many businesses use the team-of-teams structure described in the book. They organize the company into small, self-contained "business units" based on product lines. They do not separate product, engineering, and marketing into their own verticals. And guess which businesses that are organized vertically use to cross department boundaries? Yep, cross-functional teams!
General McChrystal points out two traits that cross-functional teams have:
Shared Consciousness - this comes from openly sharing a lot of information in the team across different domains.
Empowered Execution - this comes from decentralized managerial authority. We will dive more into this in a later post.
Readers, what are your stories about the uses (or misuses)
of cross-functional teams?
Share them in the comments!