Building successful cross-functional teams is hard, but not impossible. Here's nearly everything you must know to manage an effective cross-functional team.
Cross-functional teams are how you can build a business using that ‘less is more philosophy’ — achieving tangible results with a limited number of people working on your projects.
However (as we all know) it's wise to be wary of things that sound too good to be true. There are plenty of traps that cross-functional teams can fall into because, as paradoxical as it sounds, cross-functional teams are often prone to dysfunction.
In this article, you will see the concept of a cross-functional team dissected, from general definitions to the specific nuances, so you can get a perfect grasp of how this engine works and how you can make it run to get ahead of the competition.
Let’s get to it.
Understanding what is meant by a cross-functional team in project management is fairly self-explanatory: it is a team that performs different functions and can, in a sense, exist independently from some of the structures that exist in the rest of the company.
Cross-functional teams consist of people coming from various departments and bringing different skill sets to the table — from development and testing to marketing and sales. They work shoulder-to-shoulder and bring different functional expertise to contribute to time-sensitive projects and solve organizational challenges.
The value of such teams is that they break organizational silos, improve problem-solving, and often create innovative solutions thanks to the varied perspectives they hold.
Now, with the definition of a cross-functional team sitting firmly in place, let’s look at what that team might look like at your company.
Suppose you want to go live with a big software update or a new set of features as you scale the company and redefine your business model. In order to reach the desired goal, you need:
When such an agenda is put into a single multi-level project, it requires collective effort and a well-managed cross-functional team to make it happen.
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Having a cross-functional team assembled is never a guarantee that your project is going to fly. It’s not enough to have people with a variety of expertise – what also matters is how efficiently those people can collaborate. They will be sailing in one boat, after all.
Here is a simple checklist you can go through:
Do they prioritize cross-functional team collaboration over competition?
Cross-functional team members can get caught up in a struggle to make their voice (and their opinions, concerns, priorities) the loudest on the project, especially when it comes to financing.
And with matters like these, you have to find your balance point. On the one hand, you really want to have a flat team structure for everyone to feel equal; but on the other hand, you also need a clear decision-making process defined.
What is more important for your project, user experience (design) or functionality (development)? Understanding these things prior to project launch will help you avoid unnecessary competition and simplify the decision-making process.
Does the project team leader have good communication skills?
When it comes to cross-department projects, you need your cross-functional team leadership to be good at connecting the dots and bringing people together. Truth is, not every cross-functional project team has a leader to begin with, but it is always best to put someone in charge of resource allocation, project management, and progress monitoring.
Do team members need mentoring?
Not everyone is fit to be a part of an agile cross-functional team, even if they have the expertise required for the project. The members of a cross-functional team should have the right seniority level to give them confidence enough to make their own decisions and relevant experience to do all of their work without any hand-holding from their colleagues.
According to Deloitte, cross-functional teams can be “valuable sources of innovation and adaptability for an organization,” as they increase an organization’s ability to respond to market changes.
Data from the research showed that cross-functional teams were more likely to be present in organizations with high levels of digital maturity: 83% of digitally maturing companies reported using cross-functional teams.
With the diverse project requirements that drive businesses today, building a cross-functional team is oftentimes the go-to strategy industry leaders follow. However, cross-functional teams can present managers with previously unforeseen challenges that require an investment of time and effort.
Here are the pros and cons you need to be aware of before gathering such a team.
With a cross-functional team, you usually get to work with people from all walks of life, presenting unique interests and experiences. And when it comes to a business, this means that every individual will be bringing fresh ideas to the table, depending on the department they represent.
This usually also has an impact on the speed of work. When developing a project together, having brainstorming sessions, team members can come up with solutions, dismiss no-go scenarios, and support promising ideas on the spot. They can exchange unique takes on why they believe the project will or will not be able to go further, thus raising its chances for success.
We’re talking about employee engagement in relation to the company and each other at the same time.
First, with the level of accountability that usually comes with working in a cross-functional team, people can always see that their say in the project matters.
Additionally, every little bit of work done on the project makes a difference and can bring it closer to the finish line. It is this level of responsibility and involvement that gets people genuinely interested in seeing their initiatives succeed.
Second, a cross-functional environment always encourages increased collaboration and communication with people openly sharing their thoughts, speaking out, and, eventually, bonding to form a tight-knit community. But that is not to say that the tight-knit community will get separated from the rest of the company.
If there is one thing the very notion of a cross-functional team refers to, it’s this: a single budget.
And this is actually another reason why this model of work is starting to look attractive to more and more companies.
Rather than making separate budgets and scattering them all across different departments, you can create a single project budget that will cover the needs of all the participating departments. Even if this business model does not mean saving money it certainly means simplified project processes.
Assembling a cross-functional team is not the hardest part of the job. What comes next - enabling and empowering synergy - is much more difficult. After all, there is always a flip side to the coin – and in this case, it is the necessity to overcome differences to make a strong and cohesive team.
While this might be an interesting experience, it’s challenging for people to get used to new team players with their personal work rhythms. According to psychologist Bruce Tuckman, team development occurs in 5 stages (forming, storming, norming, performing, and adjourning,) and takes time.
At first, people get to know each other, and their collaboration is not effective; then they compete for dominance, engaging in conflict; and only after that their cooperation starts to get productive.
A cross-functional team is not an exception – on the contrary, since it consists of experienced specialists, competition might get even stronger.
As mentioned above, one of the risks that accompany cross-functional work is when different functions or individuals attempt to establish disproportionate control over the direction of the project. And this problem may become even worse without cross-functional team management in place. When it’s not clear who has the final say, it’s hard to reach a consensus.
Every expert on the team will have an opinion on how they should handle the project and what needs to go first in it. The folks who shout the loudest will make themselves heard - even if this isn't in the best interest of the project. And more often than not, this creates a solid ground for disagreements which can only be resolved through transparent communication and productive conflict, which requires mediation.
As you might have noticed, a typical cross-functional scrum team will usually be heavily reliant on the sense of accountability. Making confident decisions, being able to explain them, and, most importantly, taking responsibility in case of failure is a sign of a mature cross-functional team.
So when your team members lack this sense of accountability and do not necessarily understand just how much value their part in the project holds — be ready to take this as yet another challenge to overcome.
It’s not about introducing a blame culture, though. It’s about emphasizing the importance of individual roles in the context of collective effort.
Coming from different departments, your team members might find it difficult to trust each other’s decisions, especially if they did not really have much contact prior to the project launch. This is especially applicable for scaleups and enterprises, where people might not even know each other and thus feel somewhat uncertain about relying on each other’s expertise.
However, the absence of trust is a big problem. According to Patrick Lencioni, it is the most basic team dysfunction that ruins cohesion and efficiency, as it's the root cause of the other dysfunctions, which creates a negative domino effect.
If there is no trust, people do not engage with each other's opinions, which in turn causes a lack of commitment, accountability avoidance, and inattention to results.
Naturally, this is one of the challenges that goes away with time, especially if there are some team building or brainstorming sessions taking place at the beginning of the project. But it’s important to account for this roadblock if you want to overcome unwelcome surprises.
More often than not, the people on your cross-functional team will be involved in other projects, which they might prioritize due to a variety of reasons. As a result, they will look at the cross-functional project as if it were an extra something to work on when everything else has been taken care of. Needless to say, this foreshadows project failure.
In order to avoid such a challenge, it is paramount that your project goals are aligned with your company goals. This will help everyone understand what tasks to prioritize and why.
Creating a healthy, psychologically safe work environment where everyone feels heard and respected is a crucial building block of a successful project. Everyone working within a cross-functional team needs to feel comfortable with pitching their ideas and having them challenged. At the end of the day, the question is what is best for the project, not whose idea wins the race.
When people feel comfortable with debating and know how to keep those debates professional, a cross-functional environment can bring about innovative ideas and disruptive solutions.
Managing a cross-functional team is like navigating a boat — if you know the right route, you will be able to stay away from stormy zones and enjoy sunshine most of the time. Here are the do’s that will get you on that route.
Experience, expertise, seniority, availability, soft skills — this is the shortlist you need to go through when selecting new people for your cross-functional team.
At this stage, it’s also important to clearly define roles and responsibilities so everyone understands how they’re expected to contribute. This will prevent potential misunderstandings and work duplication. You should think about your ideal team size, too.
But there is only so little a group of people can do without a leader showing the way and having the final say when it comes to controversial decisions. So be sure to find a leader who will be the glue holding that team together.
Like in any other team, goal setting in a cross-functional team happens at three levels that are tightly interconnected:
Unfortunately, setting the right goals is easier said than done. Quite often, teams struggle with that, setting goals that are too vague or irrelevant, and eventually, that leads to frustrating results. In a 2017 report, the PMI stated that insufficient or poorly defined project milestones and objectives to measure progress make the top reason for project failure, dragging 37% of projects to the ground. And a cross-functional project has all the tools to exacerbate this threat.
In order to be realistic when planning a project for your cross-functional team, you need to have sufficient insight into people’s capacity. In short, capacity, in this case, refers to the hours your selected team members still have free.
It’s good to have a tool that can give you a bird’s eye view over the hours each person has available on any given day so you can know for sure if the expert you chose has the time to work on your project. Here’s what that capacity board looks like in Runn.
With those insights into capacity, you will know whether the existing cross-functional team can finish the project on time or whether it requires some reinforcements to meet all the deadlines.
Once you successfully finish capacity planning, you will need to effectively distribute the workload across your team. This is relatively easy when you see who is already overbooked and who still has a few hours free and can take on an additional task.
Understanding the existing workload is also crucial if you want to be sure to distribute work in a fair manner and give everyone enough space for rest and personal life. After all, when things get hectic and people start working overtime, employee burnout becomes a real danger that can sweep any project off its feet. Maintaining a healthy work environment and respect for personal life is another key to building a sustainable team that can bring lasting results.
One of the things many project plans miss is a little grey area or some wiggle room if you will.
Things can change with any project and any team, be it cross-functional or not cross-functional. People might want to take time off, they might get sick, or they might have a family emergency to take care of. And it’s those little things that can sneak through and stop your project dead in its tracks.
Accounting for those potential hours when your team members will be unavailable is another thing you need to do for realistic planning.
For your cross-functional team to be effective, everyone needs to know that they can take a break when they really need it and it will not damage the project. At least not to the point where it is out of your control.
When your cross-functional team gets that project ball running, letting things go with the flow is the last thing you want to do if you want to see them succeed, both individually and as a team.
Solid planning is a good start, but expert management along the way is no less important for the simple reason that people will need updates, insights and reports on how they are doing.
This is why the person leading the team has to visualize all the important upcoming milestones, project phases, dependencies, and potential roadblocks for everyone to understand whether the project is going to meet its initial goals and deliverables.
Communication always seems like such an easy thing to tackle. After all, being a proactive communicator comes down to common sense, and a seasoned team of professionals should be have a thorough understanding of this vital soft skill, surely?
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Okay, I hope that gave you a well-deserved laugh. Needless to say, anyone who has ever worked in project management knows that the the truth is completely the opposite. Common sense really ought to be renamed uncommon sense, and being a proactive, personable communicator does not come naturally to many people.
Project.co’s Communication Statistics 2024 showed that the costs of poor communication include time wasted (according to 70% of survey respondents,) missed messages (55%,) burnout, stress, and fatigue (53%,) lost files (36%,) bad customer experience (28%,) customers lost to competitors (12%,) and lost employees (12%.)
People might be miscommunicating or avoiding communication under the pretext that certain concepts or decisions are obvious and don't need communicating. But these are just assumptions, not facts. In reality, even the smallest things can lead to cracks in project alignment, so it always makes sense to double-check.
This is why it is crucial to give people access to all the possible communication channels and events, and, most importantly, encourage everyone to use them, ensuring open communication. In particular, a great tool to use is a team agreement – a document that specifies all aspects of team collaboration, where you can find answers, in black and white, without having to reach out to various team members.
As mentioned before, one of the challenges that are common in cross-functional teams is the fact that people are not used to each other in the professional setting. A member of the development team will not necessarily click with a member of the marketing team. But that click is essential for the team to stick together and successfully complete the project.
Luckily, there are lots of bonding activities and experiences you can give to your team members. From team building sessions to online games and from "workations" to corporate parties — helping team members get to know each other is a great way to speed up all project processes. This will be a great start to creating a positive team culture.
With the level of independence and accountability that usually drives cross-functional teams, keeping someone in the dark is not the way to build trust. Instead, you need to be open and honest about the state of the project as well as the threats looming over it, if any.
Being transparent with your team will help people effectively communicate and make the right decisions to move the project forward.
Cross-functional teams are tricky. But they aren’t impossible. Uncertainty can make it look like a daunting experience but when you know what to expect and how to handle it, solutions arrive even before problems occur. This is why being well-equipped for building and managing cross-functional teams helps you reduce uncertainty and raise your chances for success.
