Managing cross-functional teams in organizations: best practices

The global marketplace is more competitive than ever. And it will only get more competitive.
Thanks to digital transformation and advanced collaboration technologies, we have entered a new era of teamwork. However, this comes with challenges such as lack of cooperation, common purpose and decreased trust between departments of the organization that need to be overcome.
To eliminate silos, companies now have cross-functional teams. However, it’s not easy to get everyone on the same page. That‘s why project managers should adopt cross-team collaboration best practices. This comprehensive guide takes you into the world of cross-functional teams. Why are they necessary? Are there challenges to expect and how can you navigate the tides.

Why cross-functional teams are essential

Imagine trying to build a rocket with only engineers and forgetting the astronauts who will eventually live in it. That’s why cross-functional teams are vital–they integrate diverse skills and perspectives, which are crucial for comprehensive problem-solving and innovation.

According to McKinsey, companies with diverse teams are 35% more likely to outperform their competitors. Here‘s why:
Imagine a marketing specialist, software developer, financial analyst, and customer service expert working together on a project. Each person contributes unique expertise, leading to a richer understanding of challenges and opportunities. This diversity fosters creativity and results in more robust solutions.

Cross-functional teams break down silos, fostering collaboration and a unified company culture. Employees learn to appreciate and leverage each other’s skills, strengthening interdepartmental relationships and creating a more collaborative work environment.

These teams also boost agility, allowing for quick adaptation to market changes and customer needs. By integrating diverse perspectives, they enable faster decision-making and implementation.

Moreover, cross-functional teams impact the bottom line. Projects are completed more efficiently as team members streamline processes and eliminate redundancies, leading to cost savings and faster time-to-market for new products and services.

In summary, cross-functional teams are vital for modern businesses. They bring together diverse skills, foster collaboration, enhance agility, and drive efficiency, all essential for thriving in today’s competitive landscape.

7 steps to build your best cross-functional team

Creating an effective cross-functional team requires careful selection of team members and thoughtful integration to ensure diverse perspectives and experiences are represented. Here‘s how to build a stellar cross-functional team:

1. Clarify goals and scope

Before assembling a cross-functional team, establish a clear vision of your objectives and the reasons behind them. Identify the problem at hand, outline the desired outcomes and benefits, and determine how success will be measured. This clarity helps align team members with a common goal and sets realistic expectations.

2. Identify core competencies

Begin by identifying the core competencies required for the project. Consider the skills, knowledge, and experience needed to achieve the project goals. This includes technical skills, industry knowledge, and specific expertise relevant to the project‘s objectives.

Example: In a consulting firm undertaking a market research project, you might need experts in data analysis, market trends, client relations, and report writing.

3. Choose the right team members from various departments

The next step is to choose individuals for your cross-functional team. Select team members from different departments who possess the identified core competencies. Ensure that these individuals have a proven track record of collaboration and can work well in a team setting. Diversity in department representation ensures a broad range of insights and approaches. Avoid selecting individuals who are overly busy, inflexible, or territorial. Additionally, consult with managers or leaders from different departments to gather their input and support.

Example: For a new product launch, include members from marketing, sales, product development, and customer support to ensure all aspects of the product lifecycle are covered.

4. Consider personalities and working styles

Assess the personalities and working styles of potential team members. Aim to create a balanced team with a mix of planners, innovators, detail-oriented individuals, and big-picture thinkers. This balance helps in addressing various aspects of the project comprehensively.

Example: In a service organization, pairing a detail-oriented financial analyst with a creative marketing strategist can lead to innovative yet practical solutions.

5. Define roles and responsibilities clearly

After assembling your team, it‘s essential to clearly outline each member’s roles and responsibilities. Ensure everyone understands their specific tasks, how they contribute to the overall project, and the interdependencies between their work and that of others. Determine who will lead the team, specify the tasks each member will handle, and establish how the team will communicate and coordinate with each other and other stakeholders. Clarify the decision-making process and conflict resolution methods.

6. Foster a collaborative environment

Encourage a culture of collaboration and mutual respect among team members. Promote open communication, active listening, and the sharing of ideas. Team members should feel valued and empowered to contribute their unique perspectives.

Example: Hold regular brainstorming sessions where every team member is encouraged to voice their ideas and feedback, fostering a sense of ownership and inclusivity.

7. Establish clear communication channels

Set up effective communication channels to facilitate seamless interaction among team members. Utilize tools and platforms that support real-time communication, file sharing, and collaborative work.

Example: Use project management software like Birdview PSA to keep everyone on the same page, with features like shared dashboards, chat functions, and document repositories.

By following these steps, you can build a cross-functional team that is well-equipped to handle complex projects. A well-structured and diverse team can leverage different strengths and perspectives, leading to innovative solutions and successful project outcomes.

Cross-functional team management best practices

In light of the challenges outlined above, what can you do as a project manager to energize your cross-functional team to achieve a common goal?

Let’s look at the best practices you can implement when managing cross-functional teams.

1. Establish clear objectives and roles

Research by the Project Management Institute indicates that 90% of organizations believe clearer project objectives lead to better outcomes.

Equally important is clarifying roles and responsibilities–ensuring everyone understands their contributions fosters accountability and minimizes overlaps or gaps in execution.

Clear objectives are the compass that guides cross-functional teams toward success. Therefore, it‘s imperative that you define specific, measurable goals that align with organizational strategy and communicate them clearly to all team members.

2. Facilitate the best communication in your cross-functional team.

To effectively communicate objectives and goals, clarity is essential. However, many project managers struggle with this. Communication is the lifeblood of cross-functional team collaboration.

Many communication tools exist, but using an advanced project management system with built-in collaboration features is more convenient. Birdview PSA has these features and can integrate with your preferred tools like Slack and MS Teams. Birdview PSA facilitates real-time communication and information sharing, fostering an efficient cross-functional team.

Learn how Birdview PSA easily integrates with many other applications, including MS Project, MS Outlook, QuickBooks, etc.

3. Cultivate a team environment of camaraderie and mutual respect

Creating a collaborative culture goes beyond merely co-existing; it’s about valuing diverse perspectives and recognizing contributions. Research from Gallup shows that highly engaged teams achieve 21% greater profitability. To promote teamwork in a diverse team, you need to do something to build camaraderie and understanding. Here are some tips:

• Promote cross-departmental projects to improve interdepartmental relationships and rotate team members between roles or departments.
• Regularly review progress in team meetings, discuss challenges, and reflect on successes and areas for improvement to continually improve the collaborative culture.
• Organize team-building activities such as workshops, retreats or social events.

4. Utilize advanced project management tools with powerful resource planning features

Modern project management tools simplify work, especially for cross-functional projects. Platforms like Birdview PSA, Asana, Trello, and Microsoft Project are essential for task tracking, resource management, and fostering team collaboration. These tools centralize project management, making it easier to monitor progress and allocate resources effectively.

With features like Gantt charts, Kanban boards, collaboration tools, and summary reports, the Birdview PSA project management platform streamlines task management, enhances workflow transparency, and supports real-time collaboration.

Gantt charts illustrate project deadlines and task dependencies.

 

Kanban boards visualize workflows, helping teams manage projects efficiently and ensure success.

5. Develop a resource allocation plan

Create a detailed resource allocation plan that outlines how resources will be distributed across different projects. Consider the skills, expertise, and availability of team members when assigning tasks. A well-thought-out resource allocation plan helps in avoiding resource conflicts and ensures that critical tasks are prioritized. It is essential to have powerful resource planning tools, such as Birdview PSA, that can take into account and resolve all resource allocation issues.

6. Provide adequate training and support

According to LinkedIn Learning, 94% of employees would stay longer at a company that invested in their career development. With this in mind, it‘s important to empower cross-functional team members with the skills and knowledge they need to excel in their roles. This fosters a culture of continuous learning where members feel supported and equipped to navigate challenges.

• Workshops: Interactive training sessions where participants engage in hands-on activities and discussions to learn specific skills or concepts.
• Seminars: Educational sessions where an expert shares knowledge on a specific topic, usually followed by a Q&A session.
• On-the-job Training: Learning while performing the actual work, guided by more experienced colleagues or mentors.

7. Monitor performance and provide feedback

It‘s important to keep a close eye on the team’s performance. To do this effectively, you need actionable metrics or milestones, also known as key performance indicators (KPIs).

Here‘s an in-depth look at how to monitor performance and provide feedback effectively:

Setting clear objectives and KPIs: This is the foundation of effective performance monitoring. Define objectives that align with the overall organizational strategy.

Identify KPIs: Establish key performance indicators to measure the team‘s progress toward these objectives. KPIs should be relevant to the team‘s tasks and provide clear benchmarks for success.

Example: An architectural firm working on a large construction project can regularly review the project‘s progress and adjust resource allocation based on current needs. If there is a delay in the design phase, additional designers can be assigned to expedite the process.

9. Improve cross-functional team performance with strong leadership

Strong and supportive leaders play a critical role in guiding the team and ensuring they have the resources and direction required to achieve their goals. Here‘s a detailed exploration of how cross-functional team leadership and management support can enhance overall team performance:

Provide a Clear Vision and Goals: Articulate the vision and keep the team informed about any changes.

Empower the Team and Provide Autonomy: Give team members the responsibility and authority to make decisions within their areas of expertise.

Ensure Clear Communication: Open channels where team members can share ideas, provide feedback, and discuss challenges without fear of judgment.

Resolve Conflicts: Learn how to resolve conflicts between team members. Disagreements and misunderstandings are inevitable, but effective conflict resolution is crucial.

By following these steps, you can create a cross-functional team prepared to handle complex projects. A well-structured and diverse team can leverage the different strengths of each member.

The challenges faced by cross-functional teams

Navigating the cross-functional terrain isn’t without its hurdles. Misalignment of goals and priorities, communication breakdowns, and clashes of departmental cultures can derail even the most promising initiatives.

A Harvard Business Review study revealed that 75% of cross-functional teams are dysfunctional due to these challenges. Overcoming these obstacles demands strong leadership, effective communication strategies, and a collaborative culture where differences are celebrated as strengths rather than barriers.

Misalignment of goals and priorities

Each department within an organization has its own objectives and success metrics, which can sometimes conflict with the goals of the cross-functional team.

For example, the marketing department might prioritize launching a campaign quickly to meet quarterly targets, while the product development team might emphasize the need for additional time to ensure the product meets quality standards. This misalignment can lead to friction, delays, and ultimately, suboptimal outcomes.

Communication breakdown

Effective communication is already a key ingredient to a successful team. However, it becomes even more integral in a cross-functional team where members come from different departments and with varied communication styles and terminologies.

Misunderstandings and communication gaps can lead to errors, duplicated efforts, and missed deadlines. Additionally, the lack of a centralized communication platform can aggravate these issues, making it difficult for team members to stay informed and aligned.

Conflicting priorities and resource allocation

Resources are often limited. That means competition is inevitable, especially when shared among other departments and projects. Therefore, there‘s a need for proper resource management to avoid conflict.

For instance, a team member from IT might be simultaneously working on a cross-functional project and their regular departmental tasks, leading to conflicting priorities and divided attention. This can result in delays, burnout, and reduced quality of work.

Resistance to change

It‘s said change is the only constant and anyone opposed to change is doomed to fail. However, cross-functional teams are typically formed to drive innovation and implement changes within an organization.

But resistance to change is a common challenge. Team members may be reluctant to adopt new processes or technologies, particularly if they are accustomed to established ways of working within their departments.

Conclusion

Cross-functional teams are essential to help your company improve efficiency and maximize collaboration. However, building and managing cross-team collaboration is a complex process.

Proper cross-functional team leadership promotes effective decision-making, collaboration, and cultivates communication among team members. This requires the right tools, such as Birdview PSA for project and resource management.

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