Picture a team where diverse perspectives, skills, and experiences seamlessly come together. Imagine the incredible results they could achieve. This is the power of cross-functional teams.

They harness the collective wisdom and expertise of individuals from various backgrounds. This collaborative approach fosters innovation and drives extraordinary outcomes.

The need and demand for cross-functionality is soaring. In a recent survey, 56% of respondents actively encourage greater cross-functional team collaboration. But building a successful cross-functional team is no easy task. It requires careful planning, effective communication, and strong leadership.

This article explores the key strategies for creating and managing high-performing cross-functional teams. From understanding the benefits to overcoming common challenges, we’ll provide actionable insights to help you achieve success.

What Is a Cross-Functional Team?

A cross-functional team is a group of individuals from different departments or areas of expertise working together toward a common goal.

Rather than being siloed within their own departments, team members pool their knowledge and skills, offering unique perspectives that drive innovation, streamline processes, and solve complex problems.

Examples of Cross-Functional Teams in Action

So, what does a cross-functional team look like in action? Here are some example scenarios from various industries:

What Are the Benefits of Cross-Functional Teams?

Here’s how working cross-functionally can benefit your team.

Employee skills development

Working with people with different experiences and qualifications boosts workers’ skill arsenal. In turn, consistent learning and development increases employee retention by 34% and productivity by 52%.

Say a user experience (UX) researcher collaborates with a copywriter. The former picks up tips on persuasive copy, while the latter better understands audience data patterns. Both upskill and improve their performance in their respective roles.

In addition, cross-functional team members enhance their:

• Lateral thinking: Analyzing old problems with new, unexpected tools (e.g. using design thinking to improve a sales process).

• Problem-solving: Finding patterns, root causes, and effective solutions with extra moving parts.

• Communication: Relying on argumentation, empathy, and negotiation to find common ground.

A more differentiated service

Cross-functional teams deliver more thorough and innovative client results. In turn, your business increases its differentiation among competitors.

Imagine a project management and a customer support team working independently on the same client account. Without shared data and problem-solving, they risk providing customers with out-of-date or contradictory information.

Conversely, a cross-functional team of project managers and support reps provide faster, higher-quality service. Plus, it helps develop better products over time thanks to complementary skill sets (e.g., big-picture thinking + detail orientation), boosting customer satisfaction and retention.

Fewer errors and inefficiencies

Cross-functional teams leave less room for error and inefficiency. First, your workers don’t complete tasks in communication silos, fixing potential problems before they appear.

A technical product manager, for example, might inform a marketing colleague that their campaign should highlight benefit X, not Y.

In addition, more types of thinking (e.g., technical, financial, strategic, and creative) generate better decisions, such as those reducing operational risk and under-productivity.

What Are the Challenges of Cross-Functional Teams?

However, cross-functional teams are not without their challenges. There is a natural tendency to segment teams based on skills, roles, and functionality. So harmonizing employees with different goals and skills presents several issues. These include:

Communication Barriers:

One of the most significant challenges facing cross-functional teams is effective communication. Misunderstandings, differing communication styles, and specialized jargon can hinder collaboration and productivity. To overcome these barriers, it’s essential to:

• Establish clear communication channels: Use tools like Spike to create dedicated channels for team discussions, file sharing, and project updates.

• Promote active listening: Encourage team members to actively listen to each other and avoid making assumptions.

• Use clear and concise language: Avoid using jargon or technical terms that may not be understood by everyone on the team.

Conflicting Priorities:

Another common challenge in cross-functional teams is managing conflicting priorities. When team members have different goals or objectives, it can be difficult to align efforts and make progress. To address this issue:

• Set clear team goals: Establish a shared vision and mission for the team, ensuring that everyone is working towards the same objectives.

• Prioritize tasks effectively: Use tools like Spike to prioritize tasks based on their importance and urgency.

• Encourage open communication: Create a safe and supportive environment where team members can openly discuss their priorities and concerns.

Leadership Issues:

Effective leadership is essential for the success of cross-functional teams. Leaders must be able to facilitate collaboration, manage conflict, and ensure that team members are aligned with the team’s goals. To overcome leadership challenges:

• Provide training and development: Offer leadership training programs to equip team leaders with the necessary skills to manage cross-functional teams.

• Encourage collaboration: Foster a culture of collaboration and teamwork by creating opportunities for team members to interact and build relationships.

• Use tools like Spike: Leverage tools like Spike to streamline communication, manage tasks, and facilitate collaboration.

Resource Allocation:

Allocating resources effectively is another crucial challenge for cross-functional teams. Ensuring that team members have the necessary tools, support, and time to accomplish their tasks is essential for success. To address resource allocation challenges:

• Create a resource allocation plan: Develop a clear plan outlining the resources required for the team to achieve its goals.

• Monitor resource usage: Track resource usage and identify any bottlenecks or inefficiencies.

• Prioritize resource allocation: Allocate resources based on the team’s priorities and the importance of specific tasks.

By effectively addressing resource allocation challenges, organizations can ensure that cross-functional teams have the support they need to succeed.

4 Types of Cross-Functional Teams

Cross-functional teams come in different shapes and sizes, depending on timelines, locations, and seniority levels. Here are 4 main types to consider.

1. Permanent cross-functional teams

A permanent team chases long-term organizational goals and continues to exist even when founding members retire or change roles. This allows you to build comprehensive products or processes, gain market share over time, and keep your business competitive in the face of new trends.

For example, Google teams including product development and marketing operate cross-functionally permanently.

2. Temporary cross-functional teams

In contrast to permanent teams, temporary ones engage cross-functional professionals to solve specific, short-term challenges.

Here are some scenarios where you may build a temporary cross-functional team.

• A long-term client approves an experimental project requiring in-depth research and development (R&D).

• A product, service, or internal department (like IT or recruitment) requires time-sensitive improvements.

• You’re running an internal trial to test a certain hypothesis — for instance, whether a new market would buy your product.

3. Leadership cross-functional teams

Executive cross-functional teams combine expertise in business areas like finance and innovation, or markets such as geographic regions and B2B verticals.

These teams solve mission-critical problems, usually working on several projects or goals (say, a market entry and an internal restructuring). However, effective leadership teams gather data and feedback from all business areas, including front-line employees.

4. Virtual cross-functional teams

Virtual teams can overlap with permanent, temporary, or leadership ones. They have extra challenges and benefits, however, since their team members work across geographic areas.

For example, virtual collaboration allows you to recruit nationally and globally, getting the best talent in your cross-functional team while enriching members’ work-life balance. They also require razor-sharp processes, digital tools, and coordination to stay productive.

Learn with Spike: Whether permanent, temporary, virtual, or leadership, your cross-functional employees can work:

• Full-time: All their responsibilities are in the cross-functional team.

• Part-time: They work both on cross-functional tasks and departmental ones (e.g., marketing, legal, product-specific).

7 Steps to Build a Successful Cross-Functional Team

Here’s Spike’s step-by-step guide to building a goal-smashing cross-functional team.

1. Assess your need for a cross-functional team

First, ask yourself if your project requires cross-functional collaboration. If it doesn’t, you may get more headaches than results. Here’s what to consider: