Best Practices

Cross-Functional Team: What Is It & How to Make It Work

Jonathan Friedman
October 12, 2020
Cross-Functional Team: What Is It & How to Make It Work

The cross-functional team. You've likely been a part of one before or heard of it while working on a project. Or maybe you're here because you recently joined a project, and a project team member just mentioned the term, but you're not quite sure what they are talking about. Whether you're an expert or a newbie, we at TrueNxus will share everything you need to know or want to know about a cross-functional team in this article.


Below is everything we will cover. Feel free to skip ahead.

  1. What is a cross-functional team?
  2. Cross-functional team example
  3. Examples of cross-functional projects
  4. Cross-functional team challenges
  5. How to improve cross-functional collaboration?

What is a cross-functional team?

A cross-functional team is a group of people with different functional experience working toward a common goal. The team can be made up of any combination of other business functions. Typically, a cross-functional team comprises of people at all different levels within the organization, from analyst up to the c-suite. Additionally, the team may include people outside of the company. For example, the cross-functional team may consist of clients or third-party advisors, such as consultants, bankers, and lawyers.

What are the functional areas of business?

In case you are not familiar with the different functional areas of business, below outlines the most common groups involved in cross-functional teams. However, your company's functional areas of business may look different. Typically, the functional areas themselves, the names, or their responsibilities, differ depending on the industry.

Functional areas of business

What is the purpose of functional areas in a business?

As companies mature and become more successful, they need to have their employees specialize in distinct business functions. As a result, companies establish functional areas of business. By doing so, you'll have people that are dedicated to finance, accounting, tax, marketing, etc. They will then become experts in the function's processes and systems.



Then, as the company grows ever more successful, organically or inorganically, they diversify in the number of products, services, geography, and business units. As a result, employees become even more specialized. For example, you start to specialize in digital marketing for widgets in Japan. As a specialist in a functional area of business, you'll end up becoming siloed, working with the same people every day. However, eventually, you will need to work on programs or projects across a matrix organization in these cross-functional teams.

What is a matrix organization?

A matrix organization is an organizational structure where you, as an employee, have multiple reporting structures. There are hard-lines where you report to your direct manager. Then, there are dotted lines, where you report to colleagues who are not your immediate supervisor. The dotted line reporting structures exist in these cross-functional teams.

Cross-functional team example

Now, let's take a look at an example of when you would be a part of a cross-functional team. Let's say you are the Product Owner of SalesForce, an enterprise Customer Relationship Management (CRM) software. While the reporting structure could vary at any company, in this example, you are a part of an Enterprise Sales function and not Information Technology (IT). You have the below direct reporting structure, where you report into the VP of Sales Technology, who reports into the Chief Revenue Officer, who finally reports into the CEO.

Immediate reporting structure

Now, for simplicity's sake, let's say your company has two business units, each of which sells only one product. Each business unit has a sales function. As a result, within the matrix organization, you have a hard-line reporting to your immediate supervisor, the VP of Sales Technology. While at the same time, you have a dotted line reporting to each business unit's sales functions. You support all Sales Executives and all Account Managers as the Product Owner of SalesForce.

Matrix organization reporting structure

Given your essential role as the SalesForce Product Owner in a matrix organization, you also support several cross-functional teams. These cross-functional teams are focused on a variety of projects from sales enablement to marketing campaigns and technology upgrades. As a result, you are not just working with Sales, but you are also working with Marketing, Product Management, Information Technology, etc. You're also working with external consultants and clients.



While this is a simple example, consider companies with 500 employees, all the way up to 100,000+ employees. When this happens, your responsibilities do not reside in working with the same people over and over again. You end up being a member of cross-functional teams, where you work with other business functional areas, in addition to your day job where you work with your direct team.

Examples of cross-functional projects

Cross-functional teams make up cross-functional projects, and there are many use cases, especially as the company becomes more matrixed. While there is a wide range of cross-functional projects, typically they can be grouped in the following three categories:

  1. Enterprise-wide strategic initiatives
  2. Department-specific projects
  3. Client delivery

Below are some examples of cross-functional projects that need to be executed by cross-functional teams.

1. Enterprise-wide strategic initiatives

2. Department-specific projects

3. Client delivery

Cross-functional team challenges

Executing programs and projects that require cross-functional teams is extremely difficult, and it only gets exponentially more challenging the larger the organization. Below are the top three challenges you will experience when you are a cross-functional team member, and best practices for managing each challenge.

Cross-functional team challenges

1. Leadership

Every program or project, whether the team is made up of people you work with day-in and day-out, or it is made of a cross-functional team, requires leadership. You need to have a Program Leader or a Project Leader that takes accountability for the success or failure of the engagement. However, this person's responsibilities are more complicated when working in cross-functional teams because they will lead people who do not report directly to them. Therefore they cannot reprioritize work for everyone.



Additionally, it would be best if you had an Executive Sponsor that can represent senior leadership's interests. They need to be senior enough, typically SVP or C-suite, to influence the different business functions or business units that make up the cross-functional team. The Executive Sponsor needs to be able to make decisions and clear roadblocks when issues come up. Without an Executive Sponsor, cross-functional teams will become stuck and won't move forward, which eventually will cause the program or the project to fail.

Lastly, if you can, you should have a dedicated Program Manager or Project Manager. Everyone on the cross-functional team has a day job, and they are all met with distractions several times a day. It helps to have a Program Manager or Project Manager who can have a constant pulse on progress to keep everyone focused on the path ahead.

Cross-functional team best practices for leadership

2. Shared goals and objectives

If not the biggest challenge, one of the biggest challenges is having shared goals and objectives for any cross-functional team. Every business unit, product, and functional areas of business has a set of goals and objectives that are agreed to at the beginning of any fiscal year. For example, your business unit or product will have quotas for how much revenue needs to be attained while also having a goal to limit spending on cost of goods sold and business function expenses. These business goals and objectives then trickle down to your daily goals and objectives and dictate how much time to spend on any given task. As a result, your employment, and not to mention your bonus, if you're fortunate enough to receive one, are dependent on meeting or exceeding the goals and objectives.

However, what happens when you are a part of a cross-functional team, and you're working with 30 of your peers across the organization with different goals and objectives than you? The answer is simple, conflict! Each of you only has so much time in the day, and you're being pulled in different directions. Work is allocated to you from your immediate supervisor and other managers across the organization. In the end, though, you will prioritize whatever your immediate supervisor tells you to prioritize because that's how your performance will be measured. Without shared goals and objectives across the entire cross-functional team, people will prioritize work assigned to them from their immediate supervisor, even if it conflicts with tasks assigned to them from the cross-functional project.

Cross-functional team best practice for shared goals and objectives

3. Clear communication

Another challenging aspect of working on a cross-functional team is communication. Cross-functional teams require people from across the organization. You'll work with people from every domain (i.e., Finance, Marketing, Engineering, Legal), and as a result, every stakeholder has a different way of thinking and communicating. In some ways, each business function has its own language. The way Finance thinks about a problem is entirely different than the way Engineering or Legal thinks about the problem. As a result, without a clear communication plan and one source of truth for the entire cross-functional team to be aligned to, communication will break down, eventually resulting in the cross-functional project failing.

Cross-functional team best practices for clear communication

How to improve cross-functional collaboration?

Planning and executing programs and projects with cross-functional teams is extremely difficult, but TrueNxus can help you. TrueNxus will be your single source of truth where you can not only instill best practices for your cross-functional teams, but you can also optimize cross-functional collaboration. With TrueNxus, you and your cross-functional teams will be able to align everyone on leadership, goals and objectives, and communication. Not to mention, everyone will be aligned with real-time access to where things stand in the project.

Below are several features on how TrueNxus can help you and your company instill cross-functional team best practices and improve cross-functional collaboration.

1. Project charter

Project charter illustration

Leverage OKR and create a project charter. You can optimize cross-functional collaboration by documenting and aligning on the project objectives, benefits, and risks from the very beginning.

2. Personalized views

Personalized views illustration

Every business function specializes in a specific domain and, as such, thinks about project management differently. As a result, to ensure cross-functional collaboration, you need a project management software that provides personalized views. These views need to be in sync as well.

TrueNxus provides you with the following views:

List

Project plan list

A list is a table that allows you to manage your project plan easily. Organize the work into groups such as workstreams, or any logical way to categorize tasks.

Timeline

Project timeline, Gantt-chart

Visualize the project as a Timeline, a Gantt chart like view that lets you understand how the entire project fits together. Make updates to the project plan through an interactive interface.

3. Automated project status reports

Project status report

We understand that each cross-functional team member is busy balancing multiple priorities. Therefore, TrueNxus helps optimize cross-functional collaboration by automatically analyzing the project health real-time giving senior leadership and the project team the insights they need to make decisions and move the ball forward.

4. My Work

My Work - Manage all tasks across all projects in one place

Another essential thing in cross-functional projects is for you to understand what you're on the hook for delivering. With TrueNxus you can view every task and every dependency that is important to you, across every project, in one location, ensuring cross-functional collaboration.

5. Dependencies

Dependencies

Additionally, we know that you don't want to let your cross-functional teams down or be let down. You can improve cross-functional collaboration by documenting task dependencies. By doing so you, you can be accountable when others are reliant on you. You can understand dependent tasks, change implications, and adjust course as needed.

6. Automated notifications

Automated workflows - notifications

You can also enhance cross-functional collaboration by using project management software where you get notified when changes occur. With TrueNxus's 20+ out-of-the-box automated notifications, you will have the transparency you need to stay in-the-know.

7. Comments

Collaboration as one team with comments

Lastly, the entire cross-functional team can maximize cross-functional collaboration by collaborating directly in the app. With TrueNxus you and colleagues, and guests can communicate with one another directly in tasks.

TrueNxus has everything you and your cross-functional teams need to plan and execute projects successfully.

See for yourself, and sign up for a free trial today (no credit card needed).