Cross-Functional Teams: Their Triple Challenge

Overview

Post-COVID, ?hybrid work is a new norm, as are cross-functional teams. For example, 86% of digital maturing corporations, like Apple and Cisco, routinely employ them. These teams, comprised of individuals from different departments or areas of expertise, are able to quickly grasp the 'big picture '. Their diversity of member perspectives, experiences, and skills fosters the creative thinking needed to tackle complex, multifaceted problems. This allows them to develop more comprehensive solutions and adapt to the dynamic demands of a volatile, uncertain market at an impressive speed. Cross-functional teams can be temporary, formed for a specific project or task, or permanent, as part of the organization's structure to continuously manage cross-departmental tasks.

No single-function team can really deliver at the speed the customer is expecting. Shamim Mohammad, EVP, CI/TO, CarMax

Crossing the Divides

Overall, the research suggests that cross-generational and cross-cultural compositions are becoming standard in cross-functional teams, particularly in organizations that prioritize innovation and global market engagement.

For the first time ever, six generations are working side by side in the workplace - Traditionalists, Baby Boomers, Generation X, Millennials, Generation Z, Generation Alpha. The trend indicates that a majority of teams in forward-thinking organizations are designed to include members from various age groups to maximize the benefits of diverse experiences and expertise.

?Cross-functional teams are also increasingly cross-cultural, reflecting the globalized nature of modern business. A report from the Boston Consulting Group (BCG) highlights this diversity is crucial for understanding and addressing the needs of global markets, as well as for fostering creativity and innovation by bringing in varied cultural perspectives.

Innovative companies not only build cross-functional teams but also pool cross-functional data so that those teams gain a more holistic view of the business. McKinsey & Company

Their Triple Challenge

Cross-functional teams face a "triple challenge" that significantly impacts their effectiveness: functional, generational, and cultural differences.

Functional Challenges: Different professional backgrounds bring varied priorities, working models, and jargon, often leading to misalignment. In 2015, research revealed that 75% of cross-functional teams were dysfunctional. Today’s statistics are not better. Research ?shows that -

50% experience misalignment and unclear decision-making

25% or less improve organizational performance

20% of executives believe their cross-functional teams are "high performing"

17% or less effectively communicate their goals

Generational Challenges: With six generations—Traditionalists, Baby Boomers, Generation X, Millennials, Generation Z, and Generation Alpha—working together, differences arise naturally involving: work preferences, work-life balance, communication , and technology adoption. For example, while Baby Boomers may value hierarchy and traditional work structures, Millennials and Gen Z tend to prioritize flexibility, inclusivity, and a strong work-life balance.

Cultural Challenges: Cultural diversity in cross-functional teams adds complexity, including risks such as misunderstandings due to linguistic interpretation (even among English-speaking cultures), transactional communication rather than relationship-building, and judging from a single cultural perspective instead of adapting to diverse cultural norms. The lack of appreciation for different communication styles can lead to a disconnect within the team. This underscores the importance of inclusive practices in cross-cultural team settings.

?Conclusion

The success of cross-functional teams hinges on their ability to navigate the "triple challenge" of functional, generational, and cultural differences. While these challenges present significant obstacles, they also offer opportunities for innovation, growth, and improved collaboration. To transition from these challenges to a cohesive "we" as a team, organizations must implement strategic initiatives that foster unity and collaboration across diverse team members.

Key Recommendations

• Promote a Shared Vision and Purpose: Establishing a clear and compelling vision that resonates with all team members is crucial. This vision should align with the organization's goals and emphasize the importance of collaboration across functions, generations, and cultures. When team members understand and are committed to a common purpose, they are more likely to work together effectively, despite their differences.
• Foster Inclusive Leadership: Leaders play a pivotal role in bridging the gaps between functional, generational, and cultural divides. Training leaders to be culturally competent and inclusive in their decision-making processes can help ensure that all voices are heard and valued. Inclusive leadership encourages a culture of respect and understanding, which is essential for team cohesion.
• Enhance Communication and Collaboration Tools: Utilizing technology that supports seamless communication across different time zones, languages, and functions can mitigate many of the challenges faced by cross-functional teams. Tools that facilitate real-time collaboration, transparency, and knowledge sharing are vital in helping teams stay aligned and work together efficiently.
• Implement Continuous Learning and Development Programs: Providing ongoing training that focuses on cross-functional collaboration, generational differences, and cultural awareness can equip team members with the skills they need to navigate these complexities. Encouraging a growth mindset within the team can also foster adaptability and openness to diverse perspectives.
• Encourage Relationship Building: Moving beyond transactional communication to relationship-building is essential in creating a sense of "we" within the team. Organizations should create opportunities for team members to connect on a personal level, such as team-building activities or informal gatherings, which can help break down barriers and build trust.

By addressing the triple challenge head-on and implementing these strategies, organizations can transform their cross-functional teams from a group of individuals with diverse backgrounds into a cohesive and high-performing unit. This transformation not only drives innovation and growth but also ensures that the team can effectively respond to the dynamic demands of the modern business environment.

References

Deloitte. (2021, October 26). Teaming your way through disruption. Deloitte Insights. Retrieved from https://www2.deloitte.com/insights/us/en.html

Harvard Business Review. (2015). Why 75% of cross-functional teams are dysfunctional. Harvard Business Review. Retrieved from https://hbr.org/2015/06/why-75-of-cross-functional-teams-are-dysfunctional

Boston Consulting Group. (2024). Collaborative advantage: Leveraging the power of cross-generational teams. Retrieved from https://www.bcg.com

Harvard Business Review. (2015). Why 75% of cross-functional teams are dysfunctional. Retrieved from https://hbr.org/2015/06/why-75-of-cross-functional-teams-are-dysfunctional

Philip Morris International. (2024, June 24). How cross-generational workforce can unleash innovation. Retrieved from https://www.pmi.com

Urassa, M., Lawson, D.W., Wamoyi, J. et al. Cross-cultural research must prioritize equitable collaboration. Nat Hum Behav 5, 668–671 (2021). https://doi.org/10.1038/s41562-021-01076-x

McKinsey & Company. How innovative companies leverage tech to outperform (December 14, 2023), https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/how-innovative-companies-leverage-tech-to-outperform