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Managing Cross-Functional Teams for Efficiency: A Focus on Organizational Culture

Managing Cross-Functional Teams for Efficiency: A Focus on Organizational Culture

About the author: Mariia Opritova is the head of a company from the venture capital market with a background in mathematics and business. Since 2020, Mariia has worked as the Product Owner at Yandex, leading the product team and managing several key areas within advertising, including Yandex Direct, Russia’s largest advertising platform.

The term “cross-functional team” originates from the Scrum methodology. Although it is now quite common, the very definition of cross-functional teams, their organizational culture and management raise many questions. This article will answer these questions.

What Is a Cross-Functional Team

As the name implies, a cross-functional team brings together experts from various fields. Such teams can include analysts, developers, designers, UX writers, etc. The team’s specialists are brought together by a common goal: to create a specific product or business stream. In other words, every team member is equally motivated to achieve the best possible result.

The main benefits of cross-functional teams include streamlined internal processes and direct communication among team members. Team members spend significantly less time negotiating and coordinating their decisions. They share the information environment, constantly interacting with one another and having the opportunity to achieve shared goals more quickly and efficiently.

It’s worth noting that the presence of specialists with different skills and experiences helps to view problems from multiple angles, leading to more optimal, comprehensive solutions.

Another benefit of cross-functional teams is their independence from other departments, which significantly speeds up work processes. Having a dedicated specialist for each task, such as a tester or front-end developer, can speed up project progress by eliminating waiting time for others. When a task appears, it immediately goes to work.

Management Challenges and Limitations

At first glance, it appears that a cross-functional team is a one-size-fits-all solution. However, such teams have distinct characteristics and limitations. For example, certain types of projects are incompatible with cross-functional teams. It is thought that the larger the project scale, the less effectively a cross-functional team can manage it. The main issue here is that keeping employees motivated over time becomes more difficult. It’s one thing when the project is small and the entire team works for a limited time to achieve a goal before moving on to the next project. It is completely different when people work on complex solutions for an extended period of time. Efficiency inevitably declines at some point, and the team is fortunate if anyone is willing to have a candid discussion about the strategy change. More frequently, the team continues to work with team members who lack proper motivation, resulting in missed deadlines and lower quality.

Another challenge in managing cross-functional teams is responsibility allocation. One of the manager’s duties is to define areas of responsibility so that they do not overlap while ensuring that all tasks are completed.

Moreover, each team member must recognize and accept that they are now responsible not only for their own contributions but also for the overall outcome. This does not happen automatically, especially if people have never worked in this format before and are used to functional teams. The project owner must keep track of these moments, determining who has what responsibilities and how they are interconnected.

In addition, a cross-functional team presents slightly different, broader requirements for the specialists’ competencies. Every team member must communicate with other members and stakeholders, defend their position, and present solutions. For this, it is necessary to have highly developed communication skills, which are not always required for members of functional teams, where these tasks are typically handled by the manager.

Another limitation of cross-functional teams is their inability to progress to a higher quality level. They are unlikely to produce breakthroughs, fundamentally new solutions, or global changes. The project is always focused on a specific goal for the team members. Even if they have the necessary experience to implement innovations or devise unconventional approaches, this should not be expected because their primary goal is to complete the project on time. At the same time, a cross-functional team can easily and effectively manage the development and maintenance of an existing product.

For more information on the unique challenges of managing cross-functional teams and the causes of their dysfunction, see Behnam Tabrizi’s article in the Harvard Business Review.

Organizational Culture and Efficiency

So, what is needed for a cross-functional team to work effectively? To answer this question, it’s important to understand the nuances of internal organizational culture.

Cross-functional teams bring together people with diverse backgrounds and skills. This is undoubtedly beneficial to the project as a whole, but it can be difficult for team members on an interpersonal level. In such cases, the leader should work to close communication gaps and encourage colleagues to share their experiences and back up their points of view with facts so that everyone on the team is on the same page.

As mentioned before, communication is the most difficult aspect of situations involving multiple points of view. To overcome challenges, it is imperative to foster a culture of mutual respect and appreciation for differing viewpoints, as well as to discuss all emerging issues. Therefore, team leaders should pay attention to creating clear decision-making processes and establishing communication channels.

To handle all these nuances, an experienced and confident leader is needed. They must set an example of the effectiveness of open communications, motivate the team to work cohesively, and emphasize the importance of each member.

Motivation is also a complex issue in cross-functional teams. A team that is overly focused on results can quickly burn out, especially since there is no opportunity for vertical growth here. This significantly reduces motivation and can result in staff turnover.

One of the leader’s duties in this case becomes the professional development of employees. Not every team member can see their growth points; most require the leader’s assistance.

Another way to support and improve motivation within long-existing teams is rotation. Often, simply changing the context can alter employees’ mood and contribute to their professional development.

It’s important to note that financial motivation does not work best for cross-functional teams, at least not traditional models based on the individual contributions of members. If all team members worked together towards one goal, it’s difficult to assess the contribution of each. And if this is difficult to assess, then it will also be challenging to create a system of material incentives. After all, bonuses usually depend on how productive you are, which doesn’t work with a cross-functional team.

A 360-degree feedback system should be used to assess each employee’s contribution more easily. This allows all team members to evaluate each other’s work and form a more objective assessment of everyone’s merits. Another useful tool is regular reflection and retrospective processes, in which employees discuss their role in the project and share what worked and what didn’t work this time.

In conclusion, despite a cross-functional team working independently and efficiently, it is critical to remember that it is still part of a global system. Naturally, higher-order challenges will emerge, with which such a team will be unable to deal. In these cases, the most practical solution is to seek assistance from colleagues in other departments. Often, this helps to significantly save time and achieve the desired results within the timeframe.

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