A cross-functional team is a workgroup made up of employees from different functional areas within an organization who collaborate to reach a stated objective.
A software company, for example, could create a cross-functional team with workers from engineering, sales, marketing and customer service, all working as equal stakeholders, to produce a new application. In some cases, a cross-functional team will also include customers or other outside stakeholders in the project.
Organizations often create cross-functional teams on a temporary basis to function as a unit for the duration of a specific project, existing from the start of that project until, ideally, the project's successful completion. However, some enterprises organize their workforce in permanent cross-functional teams instead of in a more traditional hierarchical structure that includes clear divisions of professional disciplines.
Cross-functional teams can be used in organizations of all sizes.
A cross-functional team places less emphasis on the members' specific roles within the organization and more emphasis on communication and working together to accomplish organizational goals. For example, a data science team might include a business analyst, a quality engineer and the product managers from different divisions within the organization who will be using the data. Or, a software development team for a new vendor offering may include the executive sponsor and marketing manager, as well as the product owner, a technical writer, a database manager and the software development team.
The purpose of cross-functional teams
Companies use cross-functional teams to help them produce better results more quickly. As such, companies expect these work teams to be high-performance teams.
The philosophy behind that is by bringing together workers from the different business divisions with a stake in a project, the team can more effectively and efficiently address what needs to get done. And by collaborating together in a single unit with a common objective, the workers don't waste time passing a project from one department to the next, as they would in more traditional team arrangements.
Thus, cross-functional teams reduce the repetition and need for revisions that arise in more traditional team or project management arrangements, where a project moves through the various departments for input and review in a linear fashion.
In software development, teams following the Agile and DevOps methodologies have characteristics of cross-functional teams, as Agile and DevOps methodologies pull together various professionals to form multiple-functional units.
How to staff cross-functional teams
Ideally, a cross-functional team will be comprised of professionals from all the functional areas needed to design, develop and implement the end product, as well as the functional areas that will manage, sell or own the end product.
Although these teams are meant to break through departmental siloes, each team member still contributes his or her own professional or departmental skills to the whole as part of this collaborative effort. As such, team members should be chosen both for their subject-matter expertise and professional skills, as well as their ability to communicate and work well with others in the unit.
Setting up a cross-functional team can be a challenge for project managers. Without having worked previously with the individuals involved, it can be difficult to balance the team's soft skills and hard skills and not end up with too many individuals who have similar skill sets, while neglecting other possible team members who would aid the team's goal.
How cross-functional teams work
Individual members, as well as the cross-functional team itself, generally have a high level of decision-making capabilities, a characteristic that helps them move faster through projects than other types of teams could.
The cross-functional team needs to understand the problem to be solved or the objective to be met, as well as clear, defined goals.
Cross-functional team management
Despite their decision-making authority, cross-functional teams still need an appropriate level of management.
Moreover, they need management that is likewise able to work across siloed departments and put the team's success first, rather putting any one department's interests first.
Cross-functional teams are more likely to succeed when the organization puts in place strong governance with high-level leadership that oversees its progress and its ability to meet milestones, as well as holding accountability for its success.
This high-level leadership could be a single executive or a multiple leaders from the functional areas represented on the team itself.
This management level needs to ensure the team has clear goals along with realistic schedules and adequate resources to accomplish its objectives -- mirroring the requirements of what any other type of project team needs to fulfill its mission.
Necessary policies and components
In addition to appropriate levels of high-level management and governance, management experts list several other key components needed to ensure cross-functional teams succeed.
These teams need to understand not just the project's goals and objectives, but have clearly delineated project scope -- again, a requirement that mirrors what all projects need to succeed.
They also need to have strong communication skills among team members so they can break down functional siloes, yet still effectively convey the perspectives and requirements of their respective professional areas of expertise and functional areas.
These teams also need to have adequate autonomy and an independent decision-making process to move the project forward. They also need to have adequate authority over required resources so they can access those resources when and how they're needed to reach the team's stated objectives.
Pros and cons
Proponents of using cross-functional teams list multiple benefits for organizations that use them. Those include the following:
- Improved problem-solving and faster decision-making, both of which lead to the development of a better product more quickly;
- Increased innovation;
- Higher capacity to respond to changing market conditions and requirements, due to the team's decision-making capabilities; and
- Better alignment to overall organizational goals, as cross-functional teams break down departmental self-interests to focus on a common objective.
On the other hand, cross-functional teams can be prone to failure when they're not appropriately staffed and managed. Like all projects without the right staffing and oversight, failed cross-functional team projects waste time and resources and, thus, can create division within an organization, as well as put the organization at a competitive disadvantage by failing to deliver on its objectives.