How to create a cross-functional team in 4 simple steps

Most companies have an organizational structure with specific departments for marketing, sales, finance, and the like. Team members in each of these areas have specific goals to meet based on their specialty—but a lot of times, these teams work in silos, focusing solely on what they need to achieve. The issue? They’re missing opportunities to leverage their colleague’s skills to do their work better and faster.

Grouping people with different strengths and unique skills across various departments can help companies better achieve their goals. This is often referred to as a cross-functional team. In this piece, we’ll explain the benefits of having a cross-functional team—whether it’s permanent or temporary—and offer tips for how to build one. 

What is a cross-functional team? 

A cross-functional team is a permanent or temporary working group of team members from different departments working together to achieve shared goals. Oftentimes, cross-functional teams will also include team members with varying levels and types of experience. With a cross-functional team, the lines between functional areas of a company are blurred. Team members from different departments collaborate, communicate, and coordinate with each other to achieve a greater company goal.

What does cross-functional mean? 

The meaning of cross-functional, by definition, is a system of people from various departments working together to achieve a common goal. Think about a successful basketball team. It needs good shooters, good defenders, different player sizes and speeds, etc., all working together to put the ball in the basket and prevent the other team from doing the same. 

Winning teams don’t subscribe to a one-size-fits-all approach, and neither should organizations. In order to disrupt an industry and create something wholly unique, you’ll need a diverse set of skills on your team. Cross-functional collaboration will help you achieve this.

Differences between functional and cross-functional teams 

While a functional team is made up of people from one specific area of expertise, a cross-functional team is composed of people from a number of different niches. When team members with unique skill sets work together, they can pursue business goals and reduce cycle times more efficiently. As a result, cross-functional teams are particularly effective at accomplishing big company initiatives. 

An example of a functional vs. cross-functional team:

• Functional team: A team focused on their specific department’s goals. For example, a marketing team focuses solely on achieving marketing goals for the company. Let’s say the company goal is to increase revenue year over year. The marketing project objectives are sure to increase brand awareness but may not impact revenue directly. 

• Cross-functional team: A more varied team focused on larger, cross-company goals. In the same example, a cross-functional team might create a project plan that focuses on increasing company revenue through various avenues. The team may include members from departments such as marketing, product, finance, and sales.

With effective collaboration and a great project management tool, cross-functional teams have the potential to achieve goals in less time with fewer resources.

How to build a cross-functional team

Regardless of whether you’re building a permanent or temporary cross-functional team, start by evaluating your current team breakdown. Consider what additional strengths and expertise you need to achieve your target goal. 

As with any other team, your cross-functional group should have a designated project manager and include people with different skill sets that you think will mesh. 

Use the tips below to ensure your cross-functional team is efficient and can successfully meet company goals.

1. Focus on diversity 

The main way to achieve a variety of perspectives on your cross-functional team is to include team members from different departments. However, aim to incorporate other elements of diversity as well, like race, gender, or age. The more variety you have in your cross-functional team, the more everyone’s perspectives can shine through. 

Tip: When creating a diverse cross-functional team, consider choosing team members with varying levels of experience and seniority as well as different hard and soft skills. You should also choose team members of different backgrounds, genders, and ages. 

2. Align goals

When creating a cross-functional team, ensure that each team member aligns their individual goals with both team and company goals. This is important because team members will need full visibility to successfully complete projects that meet company needs. If you’re the team lead, you can help new members understand the common goal and make sure everyone is on the same page. 

Tip: A helpful way to align team goals is to use goal-tracking software. Goal tracking software can connect your daily work with larger company goals and clearly visualize progress toward those goals.

3. Include subject-matter experts 

Having subject-matter experts on your cross-functional team will increase your team’s problem-solving power and give you more leverage when moving through project initiation and delivery. 

Think of this example: If you have a finance expert on your team, you’ll be more prepared to manage a cross-functional project involving upgrades to your company’s financial database. While you may need help from the marketing and sales team members for external components of the project, your financial expert can handle key decisions, guide the team through technical work, and discuss the details of the specific project with your stakeholders.  

Tip: You may not be able to pull team members with expert power from every department. If you have limited subject matter experts in one department and you think they’re needed on their designated teams, consider asking these experts who would be a good match for a cross-functional position. Team members who are knowledgeable and natural teachers are good candidates for cross-functional teams.

4. Embrace work automation 

Using automation to your advantage can make your cross-functional team stronger. Automation reduces work about work so team members spend less time searching for information or communicating changes and more time getting skilled work done. Make sure you choose the right project management tool that automates many of your team’s tasks or processes in order to drive efficiency. 

When you embrace automation, both effective communication and productivity become easier because you can streamline your workflow and avoid bottlenecks.

Tip: Having a single work management tool can help your cross-functional team organize tasks, establish clear ownership and accountability for work, and centralize team communication. Additionally, choosing software that integrates with other productivity tools like Slack, Zoom, and Google Docs can further streamline workflows and enhance communication across different platforms.

How to use cross-functional teams

Cross-functional teams work best when you’re looking to solve a more complex problem or achieve ambitious goals. These can be routine instances, for example, ongoing product development, timeboxed projects with a clear start and end date, or more ongoing, long-term goals. Here are some examples:

• High-impact projects: Cross-functional project management is most useful for a specific project when it’s targeting a larger company initiative. For example, let’s say that instead of launching a routine marketing campaign you’re putting together a multi-year advertising campaign to boost brand awareness, bring in new customers, and hit ambitious revenue goals. To make this a high-performing campaign, it would make sense to include members from the sales teams, revenue, and demand generation alongside marketing team members.

Agile projects: Due to their collaborative nature, projects that use the Agile methodology are prime candidates for cross-collaborative teams. For example, you can put together a cross-functional team for new product updates, which might include software engineers, product marketers, and the content design team who collectively use the Agile method.

Benefits of cross-functional teams 

Cross-functional teams aren't always right for the job, but when used effectively, they can help you hit your goals more effectively. Below, we cover five tips on how to set up temporary or permanent cross-functional teams effectively.

Increases employee engagement 

Cross-functional team structures can increase employee engagement because team members in this structure are more likely to feel they have a common purpose. Cross-functional teams gain a sense of unity from their collective teamwork towards a common goal.

Builds management skills 

Cross-functionality can increase team members’ management skills because there won’t be multiple team members with the same skill set to support them. For example, imagine a sales team member is part of a cross-functional team. Because they don’t have an entire team of sales experts to support them, this sales team member will need to guide the team on sales topics and potentially even act as a team leader in the subject matter. Each team member is responsible for the decision-making process and spotting inefficiencies in their specific field, which allows them to develop leadership skills in the process.

Promotes team collaboration 

While working on any team requires collaboration, cross-functional teams build strong collaboration skills because everyone must work with people and skill sets they’re unfamiliar with. Cross-functional teams require high levels of transparency and conflict resolution skills to succeed.

Creates learning opportunities 

Because cross-functional teams are diverse, the opportunities for team members to learn from one another are high. For example, the marketing and finance experts on the team will mostly stick to what they know, but they’ll inevitably learn from one another as they collaborate on projects. As time passes, most team members will learn something new. 

Improves visibility into the organizational structure 

When team members work in specialized departments, they may not know what goes on in other areas of the company. Some team members may not even know what the company’s vision or goals are. Effective cross-functional teams increase team member visibility across the board so that individuals feel more connected to the bigger company goals and milestones.

Team members may find that working with people who have different skill sets provides a more exciting work environment. When individuals feel more excited about coming to work, their morale and performance will rise.

Challenges of cross-functional teams

When putting members of various departments together, you’re certain to see some challenges arise. As a result, it’s important to consider conflict resolution tactics early on. Here are a few common challenges of cross-functional teams—and how to overcome them:

Conflicting visions

If your organization doesn’t have a culture of cross-functional collaboration, it may be hard to get started. Teams that are new to cross-functional work often deal with conflicting visions and ways of working. Team members from different departments might have an idea of how the specific project should be done and value different elements of the process over others. If you can’t find alignment, it can be difficult to accomplish anything at all. 

• Solution: Leadership should set a clear and specific goal for the project, which helps create a collaborative process with a very specific end result in mind. If there is a clear goal, you’ll see stronger collaboration and cross-functional teamwork as the unit works toward a common goal. 

Managerial challenges 

A cross-functional team presents a new set of managerial challenges, as leadership is tasked with managing team members with different skill sets, experience levels, and working styles. As a result, creating a standardized process for getting work done can be a challenge, as the team members may be used to working a certain way. 

• Solution: When you create the team, make sure there is a clear organizational structure for the decision-making process from the start. Gathering buy-in will ensure you get ahead of any internal conflict down the road. Every cross-functional team should have one team leader responsible for making decisions and then a clear descending hierarchy. 

Accountability issues

In a cross-functional environment, team members may feel that deadlines aren’t as stringent and they can work more individualistically—in other words, at their own pace. While some of this is fine, it’s still important to treat cross-functional projects with a systematic approach so you don’t get hit with delays and setbacks down the road. 

• Solution: Implement a regular feedback loop into every project so everyone is held accountable for producing portions of work in a timely manner. Use a work management tool to schedule tasks and deliverables, set milestones, and ensure work stays on track throughout the project life cycle. 

Reach your company goals with a cross-functional template 

Cross-functional teams take advantage of your company’s biggest asset—your people. Whether you adopt permanent or temporary cross-functional teams, they can offer unique perspectives and boost innovation.

While team collaboration may be an adjustment as team members get to know one another’s patterns and processes, you can reduce friction by using the same process every time. A cross-functional template creates a united user experience for your team that ignites productivity and generates exciting collaboration. Try our free cross-functional template to get started on new initiatives today.

FAQ: Cross-functional team

Why are cross-functional teams important?  

An effective cross-functional team can bring new ideas and ways of working together to create unique and more impactful solutions. It’s easy to get into patterns of doing things one way and deeming it the “right way.” A cross-functional team disrupts a standard way of thinking and can introduce new ideas and processes to a team, creating a better result for consumers. 

Organizations that function in silos tend to struggle with problem-solving because of the lack of perspectives they bring to the table. Cross-functional teams challenge traditional ways of thinking and, as a result, create better decision-making processes. By bringing together people with different perspectives and areas of expertise, you’re certain to combat groupthink and unconscious biases. Whether you’re building a new product or team building at a startup, cross-functional work can help you get more done. 

When should you create a cross-functional team?

You should create a cross-functional team when you have a project or initiative that requires expertise and input from different departments or functional areas within an organization. Cross-functional teams are beneficial when the project spans multiple disciplines and a diverse set of skills and perspectives are needed to achieve the desired outcome effectively.

What is an example of a cross-functional team?

An example of a cross-functional team is a team formed to develop a new product. This cross-functional development team may consist of members from different departments, such as engineering, marketing, design, manufacturing, and finance. Including perspectives and areas of expertise from various types of teams and team members will help ensure that the product meets technical requirements, aligns with customer needs, has an appealing design, can be manufactured efficiently, and is financially viable.

What is cross-functional team leadership?

Cross-functional team leadership refers to the ability to lead and coordinate a team comprising individuals from different functional areas or departments within an organization. Effective cross-functional team leadership involves facilitating collaboration, managing diverse perspectives and priorities, getting buy-in towards  common goals, resolving conflicts, and ensuring effective communication among team members. Strong interpersonal skills, emotional intelligence, and the ability to foster an inclusive and productive team environment are crucial for successful cross-functional team leadership.