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How Cross-Functional Teams Give You a Competitive Advantage

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Posted by Rick Lepsinger July 19, 2018

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For decades, companies adopted a hierarchical structure that echoed a military organization. In recent years, however, many companies have experimented with new approaches to corporate structure that eliminate the traditional barriers between decision-makers and employees. With today’s business demands forcing companies to be nimble and react faster than ever before, cross-functional teams have become one of their most widely adopted strategies.Although they can be organized on-site or virtually, cross-functional teams draw together team members from different areas within the organization in pursuit of a common goal. When implemented effectively, they can deliver a number of advantages that can provide companies with a much needed competitive edge.

Increased Focus on Organizational Goals

Departments or functions within an organization tend to focus on meeting their own goals and dealing with immediate problems. In many instances, they lose sight of the organization’s “big picture” goals while dealing with these day-to-day issues. OnPoint Consulting’s research has found that nearly 40% of managers do not believe departments/functions do enough to collaborate and develop plans to achieve the organization’s objectives.

Cross-functional teams can help to overcome these challenges by establishing shared goals and measurable objectives that cut across boundaries. This ensures that team members will be able to keep the organization’s long term mission in mind and understand why the team was brought together in the first place.  

Faster Communication, Faster Decisions

One of the key advantages of effective cross-functional teams is their potential to relay information and make decisions quickly. When administrative or managerial barriers exist between functions, it’s often difficult for information to move from one part of an organization to another. This has a major impact on decision making. In some instances, vital information doesn’t get to the right people or it simply doesn’t move fast enough due to the number of gatekeepers it must overcome.

Cross-functional teams can bypass this problem because they have direct connections across boundaries. Information can flow directly from disparate corners of an organization quickly and without going through multiple intermediary filters. This allows the team to act on incoming data faster and more effectively. With today’s business environment demanding that companies react to changing circumstances more quickly than ever before, any strategy that can improve organizational agility is tremendously valuable.

Creativity and Diversity of Thought

A well-constructed cross-functional team should draw upon the unique expertise and skills of people from multiple functions within an organization. By incorporating a wide range of perspectives, influences, and interests, these teams have the potential to develop truly innovative strategies and solutions. Research has repeatedly shown that diverse teams process information more effectively and do a better job of finding new ways of doing things.

Working in a cross-functional team provides a forum for proposing and implementing creative solutions to problems. Exposure to new ideas can shake up old patterns of thinking, encouraging innovation and breaking down preconceived notions of what might be possible. Since cross-functional teams usually have a great deal of latitude to establish how they interact and exchange ideas and information, they have the potential  to be as creative as they want when working toward a particular goal.

Leadership Development

By working in a cross-functional team, employees are exposed to different parts of the organization and have an opportunity to see different skill-sets being used. The experience encourages them to develop new skills and knowledge that may be useful to their own departments or set them on a different career development path. At the very least, they gain a better understanding of how everyone’s work fits into the organization as a whole.

Since cross-functional teams are not organized along traditional hierarchical lines, they blur the lines of authority and put everyone on a similar level. For employees unaccustomed to working in a collaborative environment that requires them to utilize soft skills like influencing and conflict resolution, cross-functional teams offer a unique opportunity for leadership development. Learning how to build consensus and rally support for an initiative can be a tremendously valuable experience. Even if the employee never becomes a candidate for a more senior leadership role, learning to use these skills can make them more effective collaborators and communicators.

Versatility

Many organizations are perfectly capable of meeting challenges with a traditional hierarchical  structure. But sometimes, problems arise that are outside the scope of any one department or function.

In these situations, cross-functional teams provide an effective means of targeting very specific issues quickly and effectively. They can be constructed to suit the demands of the situation and then dismantled once they’re no longer needed. By organizing these teams when they’re needed, organizations can get the most out of their existing workforce without having to rely on outside assistance or hire new people.

On the other hand, a company might decide that permanent cross-functional teams offer  flexibility it would not otherwise possess. Perhaps some critical oversight function or specialized aspect of its business demands extra attention. Or maybe a specific project or problem demands a solution beyond the scope of any one department.  Rather than trying to address the issue through existing hierarchical structures, which would likely be inefficient and slow, building a diverse cross-functional team consisting of experienced employees is both cost effective and helps to maximize the utility of resources the company already has at its disposal.

Cross-functional teams are a valuable tool for today’s organizations and can be deployed in a variety of ways. While managing cross-functional teams presents a number of unique challenges that must always be taken into account, the benefits of these teams are substantial and can provide significant competitive advantages for companies willing to invest in establishing them.

Cross-Functional Team Building

Topics: Work Better Across Boundaries, Cross-Functional Team Building, cross-functional leadership, matrix teams

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