BETTER TOGETHER: BUILDING MORE EFFECTIVE CROSS-FUNCTIONAL TEAMS

Transcription

1 BETTER TOGETHER: BUILDING MORE EFFECTIVE CROSS-FUNCTIONAL TEAMS

2 Although cross-functional teams are increasingly common in today s fastmoving economy, many organizations still follow a silo approach when formulating their business goals. Rather than working collaboratively across teams to identify and develop shared goals, initiatives often come from the top of the organization down to the heads of various departments; in turn, they identify their own goals and develop plans that allocate resources to achieve their part of the organization s objective. Unfortunately, these plans might not be aligned with one another, creating a situation in which a company has several departments pursuing different goals and setting different, often conflicting, priorities. It s no wonder, then, that two-thirds to three-quarters of organizations experience significant gaps between strategy and execution every year. The cause of the problem becomes more apparent at the team level. OnPoint Consulting s execution gap study found that 40% of managers did not believe people collaborated across functions and departments to achieve the organization s objectives, and 44% believed people did not readily share information, ideas, or best practices across those same lines. When implementing cross-functional teaming, organizations need to put more thought into how different departments can collaborate most effectively. If attention is not given to four key factors, cross-functional teams will often break down into their constituent parts rather than coming together. 2

3 4 PREREQUISITES TO EFFECTIVE CROSS- FUNCTIONAL TEAMING While there are many valuable skills that help to build effective cross-functional teams, the process of setting a team up for success requires careful coordination and planning on the part of the organization and the team members themselves. Following a few simple guidelines from the onset, however, can ensure a smooth execution and prevent potentially expensive problems from developing down the line. 1. Develop Shared Goals Since cross-functional teams bring members of several different functions and/or departments to the same table, there is a strong likelihood that their goals won t initially align. Accustomed to functioning in a self-contained environment, team members often have conflicting ideas about how to pursue the team s goals and measure success. Without direction, they can easily find themselves working at cross purposes. In an ideal situation, the organization would provide the cross-functional team with a set of goals and benchmarks for success before the departments involved set their own goals. Most of the time, however, the goals for each function and department represented on the team are set independently without consideration for the overall objective of the cross-functional team. This creates a situation in which conflicting goals and misallocated resources make it difficult, if not impossible, for the team to carry out its assigned tasks. If shared goals were not set for the team ahead of time, then the members must try to find common ground and agree to a shared outcome they can all commit to. After clarifying their primary objectives, the team can move on to determining how success will be measured and how achieving their objectives will benefit the team as a whole. By working together to establish shared goals, cross-functional teams begin to build a foundation of trust between their members. While employees may not be co-located with other team members, they will have a better understanding of how everyone s tasks, responsibilities, and skills fit into the larger scope of the team s mission. 3

4 4 PREREQUISITES TO EFFECTIVE CROSS-FUNCTIONAL TEAMING 2. Establish Clear Roles and Clarify Decision Authority Every cross-functional team, even those that have been together for some time, face similar problems with identifying lines of authority. It s not always clear whose input should be collected before a decision is made, who holds ultimate decision authority, or who must be informed following a decision. In order to collaborate effectively, team members need to understand how everyone fits into the team structure and where lines of authority are drawn. Establishing clear roles from the beginning can help to avoid confusion and frustration, heading off conflict before it has a chance to emerge. When responsibilities are ambiguous, teams can spend more time worrying about what work needs to be done, and by whom, rather than focusing on doing the work itself. By working together to agree on specific roles and decision authority, cross-functional teams can keep focused on their shared goals and work more productively. In developing these roles, teams need to involve the key stakeholders in the discussion, which could include both team members and leadership from their respective departments. Once a structure is put in place, role agreements need to be communicated to all members and then reviewed and revised based on experience. Clarifying roles and who holds decision-making authority is an important step in determining how team members influence one another and how responsibility for various tasks should be distributed. Once an ordered structure is in place, team members have a predictable framework for governing their interactions with each other. They know who will be involved in decisions and activities, which ensures that both process and people mesh together seamlessly. When everyone knows how responsibilities are shared throughout the team, it also becomes much easier for them to hold each other accountable. Knowing who among the group should be involved before a decision is made and who will make final decisions in the event of a disagreement can avoid time wasting arguments. 4

5 4 PREREQUISITES TO EFFECTIVE CROSS-FUNCTIONAL TEAMING 3. Standardize Work Processes Many cross-functional team members come from departments that do their work according to different processes and utilize different metrics to measure success. Even after working together to develop goals for the new team and clarifying roles and responsibilities, some members might feel that the work they are doing is redundant or that handoffs between groups are slow or ineffective due to misaligned processes. When team members have a clear understanding of workflow expectations and the decision-making process, they can significantly reduce costly mistakes and redundancies. Aligning work processes ensures consistency and continuity across functions and departments, improving workflow, and enhancing reliability. This standardized approach also makes it easier to realize potential economies of scale and supports the sharing of information across work units. Better sharing leads to better transparency, planning, and goal setting. Adopting a common set of performance metrics also helps everyone in the organization align their work efforts more efficiently, enhance speed, and reduce costs. Depending upon how involved various departments are in the team s work, organizations might also consider establishing service-level agreements between them to measure progress toward goals. While such a formal step may not be necessary, it could be especially useful for departments that function quite differently from each other. 5

6 4 PREREQUISITES TO EFFECTIVE CROSS-FUNCTIONAL TEAMING 4. Encourage More Transparent Communication Communication is one of the most essential components of team success, especially in a cross-functional team environment. Since the team is working toward a set of shared goals, it is important that team members be kept in the loop on the progress of the tasks related to it. Transparent communication helps to build trust and fosters a collaborative atmosphere that keeps team members engaged. Establishing clear guidelines for communication ensures that everyone has the information they need to do their respective jobs. Team members can spend more time focused on their responsibilities with minimal distractions, confusion, and contradictions. Better communication enables departments and functions to work together to solve problems and speeds up the decision making process. By clearly establishing who needs to be involved in and informed about decisions and when, cross-functional teams can avoid information overload or sending too much irrelevant information that could be distracting or confusing to team members who don t need to be involved in the decision. This is not to say some information shouldn t be shared; rather it could be posted to a common space that makes it available to people who want it. Collaborative software and other online tools make it even easier to establish a sense of transparency, allowing team members to share documents, follow up on issues, and communicate needs as they arise. 6

7 4 KEY SKILLS FOR CROSS-FUNCTIONAL TEAMS Having the four prerequisites in place is necessary for effective cross-functional team performance but may not be sufficient. Although they lay the foundation for cooperation and collaboration among crossfunctional team members, team members may still have different points of view and different priorities despite having shared goals and clear roles. As a result, sustaining collaborative work relationships in cross-functional teams can be a significant challenge. There are, however, a number of key skills that can promote and sustain healthy cooperation between team members and help to close the execution gap. Influence Without Authority The matrix structure of cross-functional teams makes it difficult for a single person to gain the support of team members based on their role or position in the hierarchy. People working in this environment must therefore use influence to gain support for ideas and constructively resolve differences that often cross organizational boundaries. fact that team members can rely on one another by leveraging the knowledge and expertise of their teammates. There are a number of ways team members can exert influence without authority. One of the most frequently used methods is reasoning. Credibility can be quite helpful when deploying fact-based arguments to show how a request is both necessary and beneficial. Team members generally have a good sense of who has a track record of success and a reputation for speaking truthfully and they are more likely to consider responding positively to someone using reasoning if they believe the person knows what they re talking about. Consulting strategies that invite other people to help develop solutions also work well in situations where no one is specifically in charge. Asking teammates to suggest improvements on ideas or provide help with a proposal can increase their sense of ownership over the outcome. This approach also reinforces the As cross-functional team members get a better sense of their teammates values and beliefs, they can identify the things that motivate them. By appealing to values, beliefs, and emotions, team members can build excitement and enthusiasm for an idea. This inspirational form of influence is particularly effective when strong bonds of trust exist between team members. It also helps to establish a sense of purpose among team members who might otherwise see themselves as only loosely connected to one another. 7

8 4 KEY SKILLS FOR CROSS-FUNCTIONAL TEAMS Building Trust Trust is the foundation for any organization, but it is especially critical for cross-functional teams. Building trust among these team members is vital to enhancing the team s overall productivity, profitability, and functionality, but doing so can be difficult due to geographic distance and overlapping lines of authority. Teams with low levels of trust exhibit a number of troubling signs, including a lack of involvement or interpersonal interactions, team members complaining about one another, and deflection of responsibility. Communication breaks down, causing team members to avoid asking for help when they need it and to become excessively critical of other people s work. In most cases, declining trust can be attributed to a lack of credibility or reliability between team members. They no longer believe what other members say and don t trust them to follow through on their commitments or responsibilities. Team members may also feel like they can t empathize with or confide in others, and may question whether someone has their best interests at heart. These problems can very easily feed into one another to undermine trust within a team. Unfortunately, trust takes time to build and plenty of ongoing work to maintain. Cross-functional teams can take some efforts to build trust by doing things like arranging periodic face-to-face meetings, partnering up team members from different locations and functions, and emphasizing collective goals and recognizing successes. Trust-building activities like training programs, games, and presentations are also a good way to help team members get to know each other as unique individuals and become invested in their collective, and personal, success. 8

9 4 KEY SKILLS FOR CROSS-FUNCTIONAL TEAMS Managing Conflicts While conflicts themselves are neutral, if managed well, conflicts result in very positive outcomes that are highly beneficial to a team or organization. If managed ineffectively, however, conflicts can produce outcomes that cause significant damage to a team s effectiveness. Communication is one of the more effective tools for dealing with conflict. Many serious issues can be resolved by a simple, honest conversation, but employees often fail to take the time to voice their concerns. This is an even bigger problem with virtual teams, where it can be quite easy for team members to isolate themselves from one another and let arguments fester until they become more serious than originally warranted. empathy, asking questions, and delivering balanced responses (i.e., mentioning the positive aspects of an idea before the concerns), can help to make the interaction a two-way conversation and resolve concerns. Involving Others in Decisions Cross-functional teams bring a lot of ideas and opinions to any discussion. With team members representing a variety of stakeholders across an organization, it s important for everyone to feel like their voice is being heard. However, simply including people in a decision-making process is not effective unless they are actively involved in generating ideas, making suggestions, or expressing concerns. To address this issue, team leaders should bring employees together frequently (either physically or virtually), by organizing special team-building events or simply making time for conversation before or after meetings. Partnering team members strategically can be another effective means of exposing employees to one another to create new relationships. By building strong relationships between team members, subsequent conflicts are more likely to be resolved quickly, before they escalate into a problem that could threaten the team s effectiveness. When conflict does occur, teams need to identify who is involved, define the specific issues, and gather facts and perspectives of the participants involved. Once the needs and objectives of each person or group has been defined, the parties should identify common ground and points of interdependence while seeking alternatives that address the needs of both sides. Active listening skills, such as restating, showing Brainstorming sessions can help team members feel like they re working toward genuinely shared goals rather than just agreeing to what they re told to do. By involving them in the decision process, they become invested in the outcomes and more engaged in working toward that result. Selecting and testing more than one proposal makes it more likely that the quality of the idea selected will be better than if the input of only one individual is considered. 9

10 4 KEY SKILLS FOR CROSS-FUNCTIONAL TEAMS Opposing viewpoints should be involved as well, especially if they represent interests that cross departmental lines. Since cross-functional teams bring a variety of stakeholders into play, it s important for the team to get their input to avoid being undermined later. By considering these ideas and suggestions, the team will know what concerns need to be taken into account in the final decision. This participatory approach generally leads to increased decision acceptance because all parties involved recognize the legitimacy of the process and agree to abide by the results. HOW HYUNDAI CAPITAL TRANSFORMED ITS CROSS-FUNCTIONAL TEAMS The cross-functional team struggles faced by Hyundai Capital Services (HCS) are instructive both for how these problems can impact an organization s ability to meet its goals and for how the core fundamentals outlined above can get a team back on track. A financial unit for the Hyundai Motor Group that provides loan servicing around the globe, HCS has several regional global entities around the world, all of which operate under the umbrella of the company headquarters in South Korea. This complex organizational structure made it unclear what role each regional entity was supposed to fill and who possessed decision authority over their actions. In this complicated environment, the main HCS office, its regional entities, and the Motor Group prioritized different goals, which made it difficult for the company s cross-functional teams to work effectively. Furthermore, communication difficulties between the regional entities and HCS caused further erosion of trust. Disagreements over how something should be done and who should do it caused people to feel left out of the loop on a regular basis. The lack of clearly defined roles and mismatched cultural expectations further contributed to bad feelings and assumptions about intent. 10

11 Initially, the parent company assumed that cultural differences were the cause of the problem. However, although cultural differences did have an impact, a thorough analysis of HCS s practices identified the source of these problems as a combination of skill development needs and a lack of shared goals, clear decision authority, transparency of communication, and standardized work processes. This data became the basis for building common ground between senior leadership by giving them a shared picture of the current situation and making it possible to focus on the same problems. Working from that consensus, the company implemented three major changes to make its cross-functional teams more effective. First, HCS engaged with the Motor Group to align their goals. This led to the second change, which consisted of a reorganization to improve transparency and communication between departments within the company. The next step established clearer roles for the regional entities and their decision authority relative to HCS. Finally, and perhaps most importantly, the company rolled out a training program that gave mixed groups of leaders a chance to come together to discuss the challenges they faced and how to address them. Cultural differences were also a key focus in these groups, helping employees to understand unfamiliar characteristics and expectations. The changes helped Hyundai Capital to improve efficiency and cooperation throughout its organization, greatly enhancing its cross-functional effectiveness. For organizations facing similar challenges, the four key prerequisites for cross-functional teaming can be applied to resolve a wide range of issues. Once those teams are set up for success, however, continual emphasis on key cross-functionality skills will help to keep team members engaged and productive. By setting teams up along these principles, organizations can push toward a unified set of goals and significantly reduce their strategy-execution gap.