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Cross-Functional Teams: Lessons Learned from Renowned Companies

Cross-Functional Teams Rock

Do you know how a combination of diverse flavors can make a dish outstanding? Well, that’s exactly what a cross-functional team can do to your software project.

The diversity of approaches to cross-functional teams management can do wonders for your business. As a result, you get better decision-making, faster development process, and greater customer satisfaction in general. What could be better, right?

Well, there may be trouble even in paradise. Some cross-functional projects that seem so promising at the beginning fizzle out in the homestretch. Why? Let’s at take a look at world-renowned companies hiring cross-development teams for their advantage.

We’ll learn what factors hinder the success of cross-functional teams and why.

“A team is called cross-functional when it’s made up of employees from different functional units of a single company. Such teams are composed to work on a specified set of goals within a particular timeframe of the project.”

Cross-functional collaboration can be a company’s primary form of organizational structure, or it can complement its main hierarchical structure. In the context of software development, it means that everyone needed to design, develop, test and release software is gathered into a single, comparatively small team.

The cross-functional approach is very beneficial for solving collaboration problems. Mainly because it encourages communication across teams, advances employees’ skills, sparks innovation and, ultimately, speeds up the development process. No wonder it has so many followers and advocates.

One of the empathetic supporters of cross-functional teams and cross-functional management is the famous McKinsey and Company. In the article based on one of their numerous studies about cross-functional collaboration, they claim that “nearly 60% of breakaway organizations use cross-functional teams.” On top of that, McKinsey calls cross-functional teams one of the five essential trademarks of an agile organization.

Which benefits make cross-functional teams so attractive to a business environment?

Companies resort to this type of collaboration to bring efficiency and value to the development lifecycle. They also believe that cross-functional teams will ensure timely delivery of high-quality solutions. And these aren’t the only reasons in favor of cross-functionality.

Faster communication = better decision making

Exact timeframes with a minimum of deviations are crucial for the software development process. And cross-functional teams can help companies stay within the set frameworks or even reduce the time needed to get software ready. How’s that possible? Mainly thanks to rapid iterations that are typical for dedicated multidisciplinary teams.

As you may know, smaller interactions help test out product ideas quickly through minimum viable products (MVPs) or prototypes. This way, you’ll be able to get valuable feedback from your customers early on and trim the product accordingly.

The idea of cross-functional teams also solves the communication problem. Having all the necessary people on board, a cross-functional project is a perfect mix of all the required skill sets in a single place.

Naturally, teammates who work shoulder to shoulder have fewer barriers for providing peer review or leaving quick feedback. Plus, they react swiftly to project issues and tasks.

Multiple perspectives reduce project complexity

Cross-functional teams celebrate diversity and unite people around a common goal. People usually have different points of view on the same issue, which can help get to the bottom of the most head-scratching project tasks.

Another factor in favor of cross-functional management is the ability to work on complex projects quicker than within structural divisions. The collaborative spirit facilitates brainstorming.

“Brainstorming in a cross-functional team leads to multiple perspectives on the same issue.”

Multiple perspectives from various professionals help to see the project more vividly. Step by step, untying the project’s knots, a cross-functional team will deliver complex software solutions.

Cross-functionality means creativity and innovation

Cross-functional teams are considered to be more innovative and creative in comparison to folks working in separate departments. When put together, people with different academic backgrounds, sets of skills and even different aptitudes of brain hemispheres alleviate the creative capacity of a project or organization.

If developers help tech writers, marketing specialists assist business analysts and UX designers expect feedback from testers all in a single team, creativity and innovation are guaranteed.

Customer focus is a must

The ultimate goal of each software project is to coordinate the organization’s resources and satisfy the customer’s need. Cross-functional teams are naturally organized around delivering a particular customer intent, action or value stream. This helps its members to stay focused on the customer’s experience and needs.

You can achieve even higher value if you organize the members of a cross-functional team in close partnerships with the customer. This way each of the members can show themselves as a creative part of a big team.

Whether it’s a small goal like a customer request for a more detailed specification or an inquiry for a new feature, cross-functional team members will strive to provide a better customer experience.

“Instead of passing a request from one department to another, a cross-functional team will work together to resolve the request as quickly as possible.”

Cross-functional teams have the flexibility to adapt

A team that has completed a project or at least one of its goals can either be disbanded or altered, depending on the project needs. This is what we call flexibility.

The role of cross-functional management is to properly prioritize the most valued development tasks for the customer and the core issues to be solved. A properly motivated team with well-established processes will quickly reach the set targets and deliver what has been communicated to the customer.

As soon as a project is over, such teams are gearing up for new projects with even more ambitious goals and complex tasks.

Why cross-functional teams fail, and how famous companies rise to the challenge

As with everything, cross-functional collaboration has its downsides. Many articles on the matter of cross-functional teams and their rational applications in the business world feature the famous figures from the article in Harvard Business Review.

A detailed study of 95 teams in 25 leading corporations claims that 75% of cross-functional teams are dysfunctional. It means that despite all the benefits organizations seek to find in cross-functional teams, they fail to meet the primary goals the businesses pose before them.

But instead of focusing on the negative aspects, let’s dive into the golden rules of effective cross-functional team leadership.

Further, we’ll be discussing the factors a software company should avoid to benefit from cross-functional projects. On top of that, you’ll learn how famous companies tackled the issues and made the most out of cross-functional team collaboration.

Lack of shared understanding (and often respect)

Cross-functionality in software development supposes that project knowledge and tasks are distributed across different cross-functional members. Without the presence of shared understanding and knowledge, team members may face various conflicts over the course of the project. Disagreements, different perspectives and opinions on a particular task may lead to disputes.

When pursuing the same project’s goal, team members may focus on different means and micro-goals to achieve the desired. Even if their efforts are not contradictory, they still may lack some shared goals to unite around.

Example from Envato

Envato’s UX designers had joined the cross-functional team of about eight people and tried to wedge the UX process into a 2-week timeframe. Obviously, it wasn’t easy to achieve. That’s why agile UX designers worked one sprint ahead of their team to ensure designs were ready for the developers.

This schedule was similarly inefficient for both designers and developers. The first felt as though they were just a means to produce prototypes. The latter felt that they were not on the same page with designers since they had a significant sprint difference.

Luckily, the team management found the solution. They balanced the preparation for the iterations by not doing too much in advance.

On top of that, they had the entire team involved in brainstorming design ideas, including the developers. They also insisted on building empathy and collaboration through actions like moving desks right next to the new co-workers.

Destructive bonds between employees and their department

When employees from various divisions gather into a cross-functional team, they often continue identifying themselves with their former division. You may know that an organization as a group of divisions often faces competition between silos which is regularly accompanied by a negative attitude.

How can employees trust each other in such conditions? When there’s a lack of trust between departments, collaboration fails.

The same is with communication. With a background from different departments, cross-functional team members can literally speak different languages. So, it requires time and support of the project managers to make all of them act as a cohesive team.

Example from InVision, Pivotal Labs SF and Skyscanner. In a professional conversation, the leaders and managers of these companies shared how they work to build up trust between designers and developers in a cross-functional team.

  1. Team managers should not hesitate to promote empathy and openness to one another, regardless of the differences.
  2. As members cross-functional teams, designers and developers should be engaged in the project from the very beginning.
  3. The cross-functional team leadership should respect the necessity of team members (first of all, the designers) to work closely with other folks from their departments. This challenge can be tackled by placing teams of designers close to each other or arrange designated spaces in offices where employees can come together and exchange ideas.

Misaligned efforts, misguided teams

Employees that join a newly-formed cross-functional team may still follow the goals and objectives their previous department had. The mental attitude of “your team” versus “my team” can harm the collaboration.

When team members prioritize task that help them meet their own goals, they automatically start neglecting the general project goals or improvements.

In this case, the cross-functional management should emphasize that the customer is the one and only focus of the project. When this is clear, the objectives, goals and rewards should be built around this concept to stress the contributions of the cross-functional project.

Example from Cisco 

Cisco Systems required cooperation and coordination among ten different business units to launch one of their products. They had managed to reduce friction between the extremely versatile business units by introducing a reward system.

Over 100 individuals from various business units were rewarded with crystal team plaques for their contributions, handed at the large celebration parties.

Along with rewards, employees would hear about the value of the project to Cisco’s progress and the support of every functional unit that dedicated to the project’s success. This is what helped Cisco establish close rapport across the company’s various departments and had obviously improved the project’s outcome.

Unclear goals and objectives along with uncoordinated initiatives

To be effective, each member in a cross-functional team has to know crystal clear who needs to be involved in a particular decision-making process or task. Strictly defined responsibilities is a must, and so is knowing who’s running a particular task and is responsible for making sure it’s carried out successfully.

The same concerns accountability in case of mistakes or unexpected situations. On top of that, employees should be aware if someone’s tasks affect or interfere with their work.

Example from Gitlab

In this regard, Gitlab suggests that the following steps should be taken to ensure the success of a cross-functional project:

  • Establish a single source of truth.
  • Provide means to measure clear and visible outcomes.
  • Improve the process in iterations.

The rational use of collaboration tools, productivity measurement platforms and issue trackers will give plenty of opportunities to set up the tasks and objectives, schedule meetings and collaborate on project documentation simultaneously. A central place to store all of the details and information guarantees that nothing gets lost.

Ineffective governance of cross-functional projects

Cross-functional teams are expected to act more promptly, compared to projects delivered by separate departments. It also means that they should be allowed to skip bureaucratic procedures and approvals that are typical for structural departments. More autonomy and the ability to take control over the project execution is definitely a fair requirement for the success of cross-functional collaboration.

At the same time, cross-functional management should not be neglected by the company’s C-level. Executive authorities must provide all necessary resources and assist in removing roadblocks on the way of this kind of teams.

Effective governance over a cross-functional project doesn’t mean demanding excessive reporting but rather assumes knowledge-sharing and a fair provision of funding and resources.

Example from Li & Fung

Dealing with a problem of inadequate use of IT resources, the company decided to create a high-level steering team composed of C-level representatives, heads of business units and employees from key centralized functions like warehousing or purchasing. This way, the top management became more involved in cross-functional projects, and the teams were guided by and aligned with the company’s strategic goals.  

6 Tips for developing and managing successful cross-functional teams

With all the challenges this kind of collaboration presents, first, businesses have to carefully consider how cross-functional teams are formed and how they are managed. Here are some tips for that:

  • Define goals explicitly. Work out your priorities, create a roadmap and project the desired outcomes. Then, communicate all your plans to the team members and verify that all of them are always on the same page.
  • Promote frequent communication. Only open and regular communication will move a cross-functional project forward. If you notice any difficulties in communication, single them out and find ways to resolve them.
  • Encourage cooperation, not competition. Сompetition might be helpful when you select members for your team. But as soon as the team is assembled, teamwork is that particular thing that should be fostered.
  • Support collaboration and idea sharing. Organize regular brainstorming with all the team members, stimulate initiatives and use a more participation-based approach to decision-making.
  • Use various tools to streamline the operation and collaboration of your team. Select software that helps team members share and store project-related information in one place. Management tools should also provide goal mapping, processes integration, activities tracking, etc.
  • Measure success and praise efforts. Since cross-functional teams are flexible, don’t hesitate to evaluate the performance and make changes when necessary. Use feedback tools to measure the team’s performance and find out the best ways to celebrate all wins, even small ones.

Cross-functional collaboration may be the best thing that ever happened to your project if done right. So, take the tips we’ve described, the insights other companies shared, and go build a cross-functional team to be proud of.

Not sure what to start with? Browse our development teams profiles and let them help your business grow!

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Anton Mishchenko

Anton Mishchenko

Anton Mishchenko is a CEO and Co-founder at YouTeam.

From 2011 onwards, Anton has founded a number of tech businesses, including Scen.io – a platform for creating highly customisable event pages. His area of expertise includes tech entrepreneurship and startups, business management, digital marketing, business development, product development, music & media industries.

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