6 Advantages of Cross-Functional Teams

Table of Contents

By Mark Samuel –

Mark Samuel
Last Updated: January 6, 2023
12:40 pm

What is a Cross-Functional Team?

Business organizations are riddled with silos. A silo is when functional teams or departments don’t communicate or work with each other, and act as solo entities within the same organization. This causes many problems within the organization such as communication and execution breakdowns, wasted resources, and stagnant business results. A cross-functional teams utilizes members from different functional areas to create a more unified organization.

Related Article: How to Set Up a Cross-Functional Team

What are Key Characteristics of a Cross-Functional Team

There are many characteristics of a cross-functional team, as they can very based on purpose, type of organization, or habits needed to make them successful. But here are just a few of their key characteristics:

They are made up of members or leaders of multiple departments or functions within the organization.
They solve problems together, utilizing the knowledge, styles, constraints, and needs of each department in order to create solutions that work for the entire organization rather than just one department. This also helps teams avoid breakdowns due to unexpected consequences for other departments.
They meet regularly to solve problems and remove obstacles to projects.
They create team habits that all members can be accountable for.

Below we outline 5 advantages of cross-functional teams. Let’s get into it.

Advantages of Cross-Functional Teams

Advantage No. 1: Fewer Wasted Resources and Increased Profits

When functional teams don’t work together, they compete for resources. Typically, the leader of a department will decide the goals of the department and the resources they need and then they’ll petition the executive team to get what they want. But this is completely backwards. The direction of any functional team should be determined by the desired business outcomes set by the executive team.

When the executive team sets the goals for the company and communicates this to a cross-functional leadership team, the leadership team can decide amongst themselves how best to achieve those results and where resources should be allocated based on the goals of the organization as a whole rather than the goals of the specific department.

This eliminates competition between departments and creates synergy as the cross-functional team works together to utilize resources efficiently, share resources amongst themselves, and ultimately increase profits for the whole organization.

Advantage No. 2: Fewer Execution Breakdowns

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When functional departments work independently of each other, they don’t ever learn the constraints or needs of other departments. This results in massive execution breakdowns as the decisions of one team contribute to unexpected consequences for another team that then have to be solved. This not only wastes monetary resources, but it wastes time and contributes to mistrust within and between teams.

When a cross-functional team is formed and departments work together, they learn the needs and constraints of each other’s departments through mutual problem-solving, coordination, and execution of desired outcomes. Pretty soon, leaders can make decisions more quickly and with fewer breakdowns because each department has representation and acknowledgment amongst the rest of the team, even if no one from that department is present at a given meeting.

Advantage No. 3: Accelerated Business Results

When leaders start working together as a cross-functional team, business results reach new heights that they never thought possible. Departments working independently and competing for resources would be like if your arms and legs moved without consideration of what your whole body was doing. It creates tension and opposition, wastes resources, and drastically decreases efficiency as time gets spent in debates and arguments rather than co-creative problem-solving.

When leaders can work together, these problems dissolve as if they were never there! In cross-functional teams, execution becomes smoother, fewer breakdowns occur, resources are utilized efficiently, and business results accelerate as the focus of the whole organization turns toward agreed-upon desired outcomes and an agreed-upon means of getting there.

Advantage No. 4: More Accountable & Positive Culture

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Have you ever been on a team that’s in competition with another team? It’s not pretty. The conflict starts out as frustration related to work and business execution but quickly becomes personal, creating a toxic work environment for everyone that breeds mistrust, anger, and even fear.
A positive work environment that fosters trust amongst teammates is essential for achieving breakthrough business results, not to mention being able to live a happy and peaceful life! After all, we spend a majority of our time at work and it’s just not worth it to live with an unpleasant work environment.

In addition, when leaders work together cross-functionally, they become more accountable. This happens because when they’re working separately, they can easily blame other departments for things going wrong. But when they come together, they create a culture absent of blame, taking mutual ownership for outcomes and supporting each other along the way.

Advantage No. 5: More Adaptable to Change & Uncertainty

Functional silos in organizations create more weak links that tend to break when things go wrong or unexpected events occur. Linking functional teams together through a cross-functional leadership team headed by the executive team provides protection when it comes to change and uncertainty.

Teams who are good at problem-solving together, who take accountability for outcomes, and who support each other rather than resort to blame and punishment are much more adaptable and equipped to respond to sudden change or breakdown. This is an invaluable benefit of cross-functionality, reducing risk and ensuring higher likelihood of quick business transformation when necessary.
This is partly due, as stated above, to strengthening any weakened links, but is also due to greater diversity of experience and types of thinking. For example, someone who works in HR will have a different orientation and perspective than someone who works in IT, and someone who works in operations will have different experience and ways of thinking than someone who works in design. When all of these different departments come together, they have enormous range and potential for creative problem-solving and coming up with ingenious solutions for a variety of difficult situations.

Advantage No. 6: Greater Creativity

Organizational departments can often get stuck in their ways, thinking that the way they do things is the best. This creates conflict with other departments and also decreases openness and creativity. When members of multiple departments come together as a team in an organization, they bring the diversity of their experience, their skillset, their way of thinking, and their method for solving problems. This makes for a much more creative team that can more quickly solve problems and develop unique solutions.