Cross-functional teams are a key component in the successful growth and scaling of companies. The largest Big Tech companies, Google, Facebook, Netflix and Amazon, have already established the advantages of these teams and profit from growing innovation, coordination and speed. On the path to a more agile company structure, however, one topic continues to come into focus: alignment. What should actually make cross-team goals and tasks more transparent, suddenly becomes the challenge. However, with the right methods and tools, companies can successfully achieve alignment.

Contents

  1. What are cross-functional teams?
  2. Challenges of cross-functional teams
  3. Successful alignment of cross-functional teams
  4. Best practices for aligning cross-functional teams
  5. Cross-functional teams FAQ

What are cross-functional teams?

In times when outcome-oriented goal setting methods, like OKRs, are becoming increasingly important for the competitiveness of a company, the number of cross-team tasks also increases. One concept is particularly ideal for dealing with this: cross-functional teams. They allow various departments within a company to collaborate and bring together employees that can then share their individual expertise, experience and knowledge with one another.

Advantages of cross-functional teams

  • Improved t-shaped skills
  • Increased employee engagement
  • Increased motivation through diversity
  • Common understanding of company goals

With this type of collaboration, prevailing organizational silos are often overcome, and cross-team collaboration and cooperation are created. Accordingly, cross-functional teams bring advantages with them that increase the probability of success and goal attainment. This makes them a catalyst for the t-shaped model. As the name suggests, this model combines vertical and horizontal expertise. The former refers to deep expertise in specific areas, while the latter refers to broader knowledge in multiple areas. Cross-team collaboration favors and promotes this model.

Employees, who are experts in their fields, come together to acquire new perspectives, continuously learning from one another and expanding their broad knowledge. This paves the way for innovative ideas that can tackle complex problems using a large range of skills.

By doing so, teams that establish cross-functional company alignment are created. They strengthen employee engagement that stretches across the involved areas of the company. Particularly in larger companies, this brings more diversity into daily work life and can increase employee motivation. It also gives them a new understanding of how other teams work and individual departments can better understand their respective goals among one another.

Challenges of cross-functional teams

What may sound easy and desirable at first, however, is not without its challenges. So, what is it that causes cross-functional teams to fail? There can be multiple causes:

  • Dependencies are not recognized: A cross-functional team and the cross-team tasks they are supposed to solve depend on alignment. If dependencies from various areas are not recognized, it is possible that cross-functional teams will be assembled improperly, and tasks will be missed. It can also happen that departments with few or no dependencies on one another at all end up coming together. Lack of alignment can negatively affect the goals, Objectives and projects of the respective teams.
  • Lack of accountability: When unclear management and lack of accountability meet cross-functional collaboration, complications are bound to arise. If tasks are not clearly classified within an area of responsibility, they run the risk of being overlooked. On the contrary, several areas may dedicate themselves to the same task, resulting in double the work. Continuous communication is therefore essential to ensure the alignment of cross-team collaboration.
  • Shared goals not clearly defined: If there is insufficient coordination when setting cross-team goals, it may result in teams working past each other and missing the goal altogether. Take, for example, the areas of sales and lead generation: With a shared goal set, the decision is made to increase the number of sales in the quarter to X. However, it is unclear what products or areas of the funnel the individual teams should concentrate on. This may result in the leads team being unable to sufficiently assist the sales team and ultimately missing the sales goal.
  • Lack of prioritization: Similar to goal setting, cross-functional projects also demand a clear focus. If priorities are not sufficiently set, the team will become blocked and bottlenecks may occur. In the worst-case scenario, the company goal will not be achieved. Take, for example, the following scenario: A cross-functional team, consisting of web development and content marketing, is put together for an online shop. Priority is set on the new landing page. At the same time, web development loses sight of the online shop’s maintenance and bugs start to increase. This negatively affects customer satisfaction and, as a result, sales numbers.
  • Unclear task allocation: If teams do not sufficiently communicate task allocation with one another, they may quickly find themselves working on the same tasks at the same time. You can also link this to the topic of accountability. If this is not sufficiently clarified, you risk work being done twice if the responsibilities still exist within the functional team.
  • Insufficient resource allocation: If a cross-functional team is not properly considered during resource allocation, it could be that the resources will already be allocated to the functional teams. The result: A lack of capacity in the cross-functional teams themselves or teams whose assistance is required.

Successful alignment of cross-functional teams

The good news at this point: There are several success factors and best practices for successful team alignment. Companies can use these to orient themselves on the path to cross-functional collaboration. Only with functioning alignment will goals and progress be transparent for everyone.  

Bringing light to dependencies and vision

For improved team collaboration, clear target communication is essential. Only then can individual team members align themselves under a common goal. For this, goals must be transparently and comprehensively formulated for everyone. Furthermore, expectations and concrete tasks in regard to communicating the overall vision also need to be clear and transparent. This transparency ensures that dependencies for individual team members are visible.

Clear responsibilities provide an overview

It should be clear by now that functioning communication is indispensable for successful team alignment. Continuous coordination among the teams and individual employees can reveal long-term synergies and blockers. This helps to reach goals faster and more easily. For pre-defined goals, it may be useful to appoint a person responsible for regularly checking the status of the goal and informing the team. For a simple overview of goals and progress, OKR Tools can be of great help. A RACI matrix can also be a welcome support when it comes to assigning responsibilities. This project management method uses a tabular form to show where responsibilities lie and for which tasks.

Setting goals, the right way

When it comes to defining goals for cross-functional teams, the OKR Framework—Objectives and Key Results—can provide necessary alignment. The clear, outcome-oriented formulation of each goal, the “Objective,” makes identification for each individual easier. The corresponding measurable “Key Results,” formulated for each Objective show exactly how the goal should be attained. It is essential that the most important goal-setting rules are considered when creating the OKRs.

Best practices for aligning cross-functional teams

Frameworks like OKR are among the examples of best practices for the alignment of cross-functional teams. They include essential core elements such as communications concepts, like weekly Check-ins or Retrospectives and Reviews.

Check-ins, or short meetings generally taking place twice a week, offer the advantage of discussing progress and new findings during the OKR Cycle. This makes it clear where mutual support is necessary and useful.

Retrospectives and Reviews, on the other hand, do not take place regularly. Instead, they are formats that take place at the end of a cycle. Important results are shared with a focus on outcomes and can show what dependencies should be addressed in the next cycle.

How OKRs support team alignment

OKRs create transparency both within the team and across various teams. Not only do they provide a good overview of the organization’s target system but can also uncover dependencies. They support identification and proactive coordination and collaboration of vertical and horizontal dependencies. The latter, which is part of the OKR Cycle, is particularly emphasized, as the main focus lies on OKRs outside of one’s own team as well as dependencies on other teams. This creates a dialog that also deals with the dependencies of other teams’ individual goals. The Alignment Workshop also offers room for discussion on what has not gone so well in previous collaborations and what could be even more efficient.

OKRs and their advantages for cross-functional teams

  • In the goal planning and drafting phase, room for collaboration across team boundaries is made.
  • Those responsible examine the organization’s target system for strategy execution to uncover important dependencies and see if teams may be working on the same tasks.
  • Teams can create clarity on their own working methods and goals as well as making it clear which other areas they depend on.
  • Resources are actively managed to ensure cross-functional teams are given enough capacity. This will prevent teams from being blocked during the implementation phase due to lack of resources.

Tools can be especially helpful in daily work life to ensure focus on dependencies—which are also discussed in the Alignment Workshop during an OKR Cycle—is not lost. Workpath helps show which teams are working on the same goals, where dependencies for reaching goals are, and possible risks that may block this achievement. Workpath supports alignment through dependency management. The following functions are available for this purpose:

  • Contribution Requests: Remove team blockers by requesting contribution from other teams to their own OKRs in a simple and comprehensible way.
  • Graphs: Visualization of dependencies and progress to ensure collaboration and avoid double work.
  • Cycle Steering Report: The team can prepare for success by providing an overview of the status of company alignment, planned cross-functional OKRs and obstacles before implementation has even begun.
  • Capacity Planner: Allows assessment and alignment of resources and goals to realistically plan the cycle and manage expectations within the organization.

Cross-functional teams FAQ

Why are cross-functional teams necessary?

Many tasks in today’s business world require perspectives and approaches from different directions. Cross-functional teams facilitate in coordinating these tasks and their dependencies, as cross-departmental experts are working towards a shared goal, are constantly communicating (and exchanging knowledge), and are involved in planning and decision making from the beginning.

Why are companies using cross-functional teams today?

Cross-functional teams are used to counter complex problems using complex solutions. This eliminates organizational silos and ensures better communication and goal attainment.

Why do cross-functional teams fail?

Failed communication and unclear responsibilities are the main reasons cross-functional teams fail. Without these, proper coordination and collaboration across departments cannot be guaranteed.

What is the most common communication barrier for cross-functional teams?

Apart from not assigning someone responsible for cross-team goals, working without clear tools that have alignment functions can also cause communication to fail.

What skills are needed in cross-functional teams?

Every expert in his or her field brings their own knowledge and experience with them. When combined with the knowledge and experience of experts from other areas, this leads to innovative ideas and new perspectives.