leadership diagram

Cross-Functional Leadership Explained

A cross-functional leader is someone who is in charge of a team with members who are from different departments and disciplines within an organization. We’ve done the research for you and below we explain in more detail what a cross-functional team is, how the team can succeed and what leadership qualities can help lead your team on the right path.

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What is a Cross-Functional Team?

Project Manager, a company that offers project management software, has put together a helpful guide with “6 tips for developing cross functional teams.”

“A cross-functional team is a team in which the members have different skill sets, but are all working towards a common goal. It often includes people from different departments and from all levels of the organization, though it can also include participants from outside the organization.” Project Manager further explained, “Cross-functional agile teams are common. If a cross-functional team mixes specialists from different fields, agile teams take this a step further. They make them combine and require each team member to expand beyond their area of expertise. Also, agile demands self-organizing teams, which dovetails nicely into the way a cross-functional team works.”

Top Leadership Skills

When managing any team or organization, there are certain qualities that can make you more effective and efficient. This is especially true for navigating the challenges of managing a cross-functional team that is comprised of folks with differing skill sets, needs and knowledge. With that in mind, let’s cover some of the traits research has shown can help you adapt in order to succeed.

A Harvard Business Review article made clear the key to developing a cross-functional team is clarity and accountability, “To make these cross-functional efforts successful, executives need to assign an accountable leader to every project. This person will make key decisions, keep the team aligned, and coordinate with senior management. Each project should also have clearly established goals, resources, and deadlines. There should be an approved budget and a charter defining priorities, desired outcomes, and timeframes. And since different functions have their own priorities, leaders have to make the project’s success the number one objective for cross-functional teams by tying it to people’s performance reviews and compensation.”

The Center for Management and Organization Effectiveness compiled a list of the following 9 leadership skills they consider “must-haves:”

  1. Excellent Communication
  2. Thorough Organization
  3. Clarity
  4. Mutual Understanding
  5. Individual Attention
  6. Conflict Resolution
  7. Strong Bonds
  8. An “A” Team
  9. Flexibility

Glass Cubes, a company that helps foster virtual collaboration writes, “The value of cross-functional teams is increasing, as today’s complex projects and strategic initiatives require a mix of talent and expertise across functions. These teams need an integrated approach to leadership to thrive and complete projects successfully.” According to Glass Cubes, there are must-have skills for cross-functional leadership:

  1. Systematic Thinking
  2. Interpersonal Savvy
  3. Listening
  4. Resourcefulness

Tips for Success for Cross-Functional Teams

Chad Dyar, Director of Enablement at OnDeck Capital, a global online small business lending company, writing for MIT’s Sloan Management Review found, “Focusing on three central tasks can help leaders foster better collaboration with cross-functional teams.”

The three tasks Dyar cites are:

  1. Persuade using Common Pain Points
  2. Negotiate Resources fairly
  3. Find Common Ground

MindTools, an on-demand career and management learning solutions platform, published a list of 6 tips for setting up a cross-functional team:

  1. Set Objectives
  2. Define Roles and Select the Right Team Members
  3. Consider Resources and Logistics
  4. Establish Ways of Working
  5. Adapt the Right Leadership Style
  6. Negotiate and Communicate

Professional services network Deloitte recommends embedding the following 5 layers into team-based thinking:

  • The ecosystem
    • Define purpose-driven teams in the context of the missions they serve within the organization and externally relative to customers, partners, and society at large.
  • The organization
    • Design “front-led” networks of teams that promote multidisciplinary collaboration and empowered decision-making.
  • The team
  • The leader
    • . Select and develop team leaders who have a growth mindset that creates the conditions for teams to be iterative, open, inclusive, and effective.
  • The individual
    • . Challenge conventional talent management interventions, from succession and performance management to rewards and learning, to enable individuals to change their focus from “climbing the ladder” to growing from experience to experience.

The Stats

A Harvard Business Review study found that 75% of cross-functional teams are dysfunctional. The research from this study showed that, “They (cross-functional teams) fail on at least three of five criteria: 1.) meeting a planned budget; 2.) staying on schedule; 3.) adhering to specifications; 4.) meeting customer expectations; and/or 5.) maintaining alignment with the company’s corporate goals.” Though this statistic might sound daunting there are ways to remedy the problem, including implementing the tips we have shared above.

Chad Dyar’s piece from MIT’s Sloan Management Review that we mentioned earlier explains, “MIT SMR and Deloitte’s survey of more than 3,500 managers found that “the most digitally advanced companies — those successfully deploying digital technologies and capabilities to improve processes, engage talent across the organization, and drive new value-generating business models — are far more likely to perform cross-functional collaboration.”

Furthermore, Deloitte finds that “While many organizations understand the opportunities that a shift toward teams presents, there is much more work to do. Sixty-five percent of this year’s survey respondents viewed the shift from “functional hierarchy to team-centric and network-based organizational models” as important or very important—but only 7 percent of respondents felt very ready to execute this shift, and only 6 percent rated themselves very effective at managing cross-functional teams.”

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Jane Young

Jane Young

Last updated February 10, 2021