HOW CROSS-FUNCTIONAL TEAMS ENHANCE PRODUCT DEVELOPMENT
The most simple definition of cross-functional teems (or CFTs) is teams that are made up of people from different functional areas within a company – marketing, engineering, and human resources, for example. These teams take many forms, but are most often set up as working groups that are designed to make decisions on a lower level than is customary in a given company. They can either be a company’s form of organizational structure, or they can exist in addition to the company’s main hierarchical structure.
Cross-functional teams have become more popular in recent years for three primary reasons: They improve coordination and integration, span organizational boundaries, and reduce the production cycle time in a new product development. Bringing people together from different disciplines can improve problem solving and lead to more thorough decision-making. The teams foster a spirit of cooperation that can make it easier to achieve customer satisfaction and corporate goals at the same time.
Cross-functional teams are similar to conventional work teams, but they differ in several important ways. First, they are usually composed of members who have competing loyalties and obligations to their primary subunit within the company (for example, a marketing person serving on a cross-functional team has strong ties to his or her department that may conflict with the role he or she is being asked to play on the CFT). Second, in companies where CFTs are being used on a part-time basis as opposed to permanent organizational structure, they are often temporary groups organized for one important purpose, which means group members are often under considerable pressure.
On these temporary teams, the early development of stable and effective group interaction is imperative. Finally, CFTs are often held to higher performance standards than conventional teams. Not only are they expected to perform a task or produce a product, but they are also expected to reduce cycle time, create knowledge about the CFT process, and disseminate that knowledge throughout the organization.
For cross-functional teams to succeed, several factors have been identified that are imperative:
• Team members must be open-minded and highly motivated.
• Team members must come from the correct functional areas.
• A strong team leader with excellent communication skills and a position of authority is needed.
• The team must have both the authority and the accountability to accomplish the mission it has been given.
• Management must provide adequate resources and support for the team, both moral and financial.
• Adequate communication must exist.
Without any of these elements, any cross-functional team will be fighting an uphill battle to succeed.
Cross-functional Teams and New product Development
Many businesses have been able to use cross-functional teams to reduce the cycle time in new product development. As a result, CFTs have become a common tool in a new product development at many companies, especially those in industries in which rapid change and innovation is the norm. CFTs have shown the flexibility to adapt to changing market needs and the ability to more quickly develop innovative products.
In the past, new product development meant gathering data sequentially from a number of departments before a new product was given the green light. First, the idea would be conceptualized. Then it would be handed off to the marketing department, which would conduct market research to see if the product was viable. The product might then be passed on to the sales department, which would be asked to create a sales estimate. From there, the idea would move on to engineering or manufacturing, which would determine the costs to produce the product. Finally, with all those numbers gathered over the course of months, or even years, the product would move to an executive committee which would either approve or kill the project. By that time, market conditions sometimes had shifted sufficiently to render the product obsolete.
Cross-functional teams eliminate the “thro over the all” mentality that p[passes a product off from department to department. Instead, a member of each of the functional areas would have a representative on the new product team. Team members could learn of the new product at the same time and would begin working on estimates together. If part of the product simply could not be manufactured cheaply enough, the team member from that area could immediately sit down with the engineering rep and come up with a new production method. The two of them could then meet with the marketing and sales team members and discuss new ways to position the position the product on the market. The result, say proponents, is a vastly improved product that is manufactured and released to the market in far less time than was achieved using traditional methods.
ESTABLISHING A CROSS-FUNCTIONAL TEAM
When CFTs are first conceived, conflict may result. There is a good chance that some of the members of the team have bumped heads in the past when their functional areas clashed over a project. Additionally, some CFT members may think that their area of specialty is the most important on the team and thus assume an inflated sense of value to the team. Finally, since CFTs often bring together people who have vastly different ranks in the organizational hierarchy, there can be power plays by members who are high-ranking employees off the team but are actually less important stakeholders on the team. Those high-ranking team members may try to assert authority over the team in a situation when they should be deferring to lower-ranking team members.
The best way to solve these conflicts is to set clear goals for the team. It is important to start with a general goal, such as improving quality, but more specific goals should be set almost immediately to give the group a common bond and to ensure that everyone is working together towards the goal. Goals are easier to establish if research has been conducted by someone in the organization before the team is convened. This allows the team to jump right into the goal-setting and problem-solving without getting bogged down in background research.
When setting goals, it is important to clearly define the problem that needs to be solved. If the desired solution is held up as the outcome, then the group’s focus becomes too narrow – the range of options is narrowed to fit that solution before the team even begins its work. Also, when setting goals, the team should determine if there are operating limits that it faces. For example, are there time or budget limitations that have to be considered? Are there some solutions that have been deemed undesirable by the company’s officers? The team must recognize these limitations and work around them if it hopes to be successful in reaching its goal.
The final point thing to do when goal-setting is sure to identify key interdependences on the team – does one team member have to finish his or her part of the project before another team member can get started? It is essential to know these sequential steps before a team gets too deep into its project.
Work With Key Stakeholders
Stakeholders are those people who stand to benefit or lose from the work of the team. Every stakeholder should be represented on the team, and it is these stakeholders who can make or break the team. For example, if a key department head does not believe that the team is needed, he or she can withhold his or her best employees from participating on the team, thus depriving the team of resources. Or, that department head can choose to ignore the work of the team, conducting business as usual because the team threatens his or her traditional role in the company. It is up to the business ownership, management and key CFT members to make all stakeholders understand the importance of the team and its purpose and priorities.
Customers, whether internal or external, are also shareholders. Teams should spend the maximum allowable time interacting with customers to learn their needs and what outcomes they expect from the team. Some CFTs find it works best if one person is named to act as customer liaison because it makes it easier for customers to provide the team with feedback and it allows the team to have one person go through training in client management skills. Other businesses have had success in letting customers either join the team or attend team meetings as an observer.
When identifying all stakeholders, determine what level of representation each needs on the team. Some groups will need permanent members; others may only need to participate in certain areas of the project. Communicate with all stakeholders and anyone else in the company who is affected by the team’s work. Do not spring surprises – this will make people resistant to the work that the team is trying to achieve. Communication steps should be decided upon upfront and planned as carefully as any other part of the project.
Deal With Team Conflict
CFTs often face regular conflict situation. This is especially true of cross-functional teams that are relatively new. Business owners and managers should be aware, however, that important steps can be taken to manage and reduce conflict, including:
• Provide all team members with conflict resolution training. Conflicts can have value if managed properly, so improving team members’ listening and consensus building skills is necessary.
• Make sure that the company’s human resource personnel are involved in the team-building process to help teach facilitation and group dynamics skills.
• Disregard the rank or perceives status of each group member and have standards in place that put value on what every team member brings to the CFT.
• Co-locate the team members. Putting team members together on an everyday basis strengthens communication and breaks down barriers.
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HOW CROSS-FUNCTIONAL TEAMS ENHANCE PRODUCT DEVELOPMENT