Guide: Cross-Functional Team
Moving away from the usual department-based team structures, cross-functional teams bring together individuals from various departments and specializations. This approach is especially beneficial in projects applying Lean Six Sigma and continuous improvement methods, where diverse expertise and perspectives are necessary to success.
By integrating a range of subject-matter experts, such teams leverage a wealth of skills, experiences, and viewpoints, thereby significantly improving the team’s collective knowledge and problem-solving capacity.
This guide covers the advantages, challenges, and effective management strategies for cross-functional teams, offering insights into optimizing their potential for business success.
Table of Contents
Understanding Cross-Functional Teams
The concept of cross-functional teams is a refined approach to forming teams in the modern business environment. This approach differs from the traditional siloed structure, where teams are formed based on department. When working on Lean Six Sigma and continuous improvement projects, it is important to focus on using cross-functional teams. In a cross-functional setup, teams are comprised of individuals from a range of departments and specializations and include a range of subject matter experts to work together for a common goal. This results in a wide range of skills, experiences, and perspectives, increasing the value of the team’s collective knowledge and capability.
For example, if you are looking to solve a problem, if you only include engineers, you will get an engineering solution; if you include HR, you might get an HR or training solution, etc. But by having a team with a range of backgrounds, the problem-solving session will have input from various backgrounds and experiences, which can then all be considered and prioritised to ensure the best solution is implemented.
Advantages of Cross-Functional Teams
As we introduced in this guide, there are advantages of cross-functional teams, such as the range of backgrounds and experiences that can bring different ideas. However, there are other benefits beyond this:
Enhanced Innovation and Creativity
The amalgamation of a range of skills and perspectives in a cross-functional team can often lead to increased innovation and creativity. Team members from different backgrounds can inspire each other with new ideas, challenge the conventional thinking of a department or person, and create a culture of creative problem-solving.
Whenever I run a problem-solving session, I always use cross-functional teams to ensure we truly understand the root cause of the problem but also get the most creative solution to the problem, rather than the first thing we can think of which may be a short-term fix or the second-best solution.
Cross-functional teams are usually more agile and adaptable to change compared to traditional teams. If a team is all formed from one department, they are more likely to be biased and agree with each other as they have an alignment in their agenda. A diverse team means they are all independent of each other in the forms of departments and will likely be more agile and open to understanding a problem from another department’s point of view.
I have experienced this a lot with mechanical engineering teams, as the culture of comradery within those departments forms strong bonds and can make them inflexible to other perspectives.
Decision-making in cross-functional teams is often more robust and well-considered, as it involves inputs from various perspectives. This comprehensive approach ensures that multiple aspects of a problem are considered, leading to decisions that are more balanced and effective.
Working as part of a cross-functional team can significantly improve communication skills among team members. As individuals are exposed to different terminologies, workflows, and problem-solving approaches, they can develop a better understanding and appreciation of other functions within the organization. This cross-pollination of knowledge enhances overall communication and collaboration within the organization.
You may find that a method of conducting a process in one department causes a problem in the next step in the process for the internal customer (another department). Working together to understand how a process is done and why it’s done a certain way helps with understanding the whole process and how a simple mistake or “corner cutting” causes much more work for another person or department.
I have personally seen this happen in businesses where the sales team, bill of materials, planning, and purchasing work independently. The sales methods for collecting customer information cause additional work for those functions that have to process that information and can lead to order delays as information is reworked and additional back and forth between the company and the customer is prolonged.
Challenges of Cross-Functional Teams
As good as all the advantages of cross-functional teams are, there are challenges of these types of diverse teams as well, such as:
One of the most common challenges in cross-functional teams is overcoming communication barriers. Due to the diversity in the team, members often come with different jargon, professional languages, and communication styles, reflecting their specialized backgrounds. This can lead to misunderstandings and misinterpretations, impacting effective collaboration. For example, a term familiar to a finance professional may be completely foreign to someone from a technical background, leading to confusion in discussions.
This makes the need for clear problem definitions and the use of visualizations of methods like gemba walks, etc. all the more important to break down communication barriers and ensure the whole team has a common understanding.
Conflict of Interest
Another challenge is the potential conflict of interest. Team members may have competing priorities, with their departmental objectives sometimes clashing with the goals of the cross-functional team. This can lead to situations where individuals prioritize their department’s success over the team’s objectives, undermining the team’s overall effectiveness.
To prevent this, it is important to always ensure discussions, actions, and prioritization are focused on the benefit of the overall business and not a single department.
Leadership and Accountability Issues
Cross-functional teams tend to struggle with issues of leadership and accountability. In the absence of clear leadership, these teams might find it challenging to make decisions and hold members accountable. The diverse nature of the team can also make it difficult to establish a unified direction and a sense of collective responsibility.
In these situations, it is helpful to have an independent facilitator to manage the team and ensure accountability. In addition to that, it may also be important to have someone at a senior level that all departments represented report to in meetings for accountability
Integrating diverse working styles and managing the distribution of workloads can be challenging. Team members may have different approaches to work, varying levels of commitment, and different expectations, which can lead to imbalances and inefficiencies in how tasks are allocated and executed.
Addressing these types of challenges in cross-functional teams involves establishing clear roles and responsibilities, fostering open communication to understand individual preferences, and using project management tools for transparent task allocation. Regular team-building exercises can also help harmonize different working styles and expectations.
Effective Management of Cross-Functional Teams
If you are looking to use cross-functional teams, we recommend the following to ensure you get the most value from this type of team formation:
Setting Clear Goals and Objectives
For a cross-functional team to be effective, it’s important to establish clear, achievable goals that align with the broader objectives of the business. These goals should be specific, measurable, attainable, relevant, and time-bound (SMART), providing a clear direction and purpose for the team’s efforts.
You can read our full guide on SMART Targets in the guides section.
Building the Right Team Composition
The composition of the team is fundamental to its success. It involves selecting individuals not only based on their technical expertise but also considering soft skills like communication, adaptability, and teamwork. A balance of skills and personalities can significantly enhance the team’s performance. Sometimes the most experienced person is not always the best, as they can often be the one most stubborn to change and comment “we have always done it that way, why change”, This is an important consideration in team formation.
Fostering an Inclusive Culture
Creating an inclusive culture where each member feels valued and respected is essential. This involves recognizing and appreciating different perspectives, encouraging open and honest communication, and fostering a sense of belonging among team members. A simple method for achieving this is by giving everyone an opportunity to input and contribute and valuing all inputs equally. If an individual’s contributions are dismissed, they will become disengaged with the team and stop providing input, or worse, fail to attend team meetings.
Establishing Clear Communication Channels
Effective communication is the key to cross-functional teams. This can be facilitated by establishing clear communication channels, scheduling regular meetings, utilizing collaborative tools effectively, and establishing a common language or terminologies that everyone understands.
For this, we would recommend structuring communication with a communication plan. This allows you to plan what will be communicated, to whom, when and how. You can download our communication plan from the templates section
Providing Strong Leadership
Strong and effective leadership is critical in navigating the complexities of a cross-functional team. The leader should be skilled in conflict resolution, decision-making, and motivating team members. They should also be able to balance the different viewpoints and align the team towards common goals.
Accountability is key to the success of cross-functional teams. This can be achieved by setting individual and team milestones and regularly reviewing progress. Each member should know their responsibilities and be held accountable for their contributions.
Continuous Learning and Adaption
Cross-functional teams should be dynamic, and capable of learning and adapting as they progress. This includes being open to feedback, willing to make necessary strategic or operational adjustments, and continually evolving to meet the demands of the project and the organization.
This is where a key tool of Lessons Learned can come in useful at key stages of the project and at the end to ensure lessons are learned from challenges in the team as well as what went well and how to improve future interactions of the team.
Cross-functional teams break down traditional silos, bringing together a range of skills and perspectives that lead to increased innovation, agility, and improved decision-making. However, managing such teams requires an understanding of their unique challenges, including communication barriers, potential conflicts of interest, leadership dynamics, and integration issues.
Effective management involves setting clear goals, building the right team, developing an inclusive culture, establishing clear communication channels, providing strong leadership, ensuring accountability, and promoting continuous learning and adaptation. By addressing these aspects thoughtfully, cross-functional teams can be critical for driving organizational growth, innovation, and continuous business improvement.
- McDonough III, E.F., 2000. Investigation of factors contributing to the success of cross‐functional teams. Journal of Product Innovation Management: An International Publication of the Product Development & Management Association, 17(3), pp.221-235.
- Webber, S.S., 2002. Leadership and trust facilitating cross‐functional team success. Journal of management development, 21(3), pp.201-214.
A: The main advantage is the diverse expertise and perspectives they bring, which leads to innovative solutions and holistic problem-solving.
A: Conflicts are managed through open communication, setting clear roles and responsibilities, and sometimes seeking mediation or external facilitation.
A: They can be either. Some are formed for specific projects and disbanded afterward, while others might be permanent, addressing ongoing organizational needs.
A: Success is typically measured by the team’s ability to achieve its objectives, as well as feedback on collaboration, communication, and overall team dynamics.
A: Absolutely. Even in small businesses, cross-functional collaboration can foster innovation, streamline processes, and improve customer experiences.
Free Lean Six Sigma Templates
Improve your Lean Six Sigma projects with our free templates. They're designed to make implementation and management easier, helping you achieve better results.