How to Lead Effective Cross-Functional Teams

Digital transformation is knocking down silos that have long separated functions within an organization. To succeed, adapt, and innovate at the pace of modern business, disparate units often need to be part of the same project from the beginning, ensuring that their needs are met without delaying the launch of a new initiative.

As MIT Sloan Management Review and Deloitte explored in Coming of Age Digitally, effective leaders must get people “to collaborate across boundaries” more than ever.

It’s a tough task. How do you manage a team when only some of its employees report to you? How do multiple managers share the responsibilities and challenges? If there’s a dispute, who has final say?

Too often, cross-functional projects fall apart. McKinsey reports that in many companies, “ownership of processes and information is fragmented and zealously guarded, roles are designed around parochial requirements, and the resulting internal complexity hinders sorely needed cross-business collaboration.”

But when organizations tackle this problem, they can see profound effects on the bottom line. 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.”

I’ve spent the past two years as a leader on a large, cross-functional project focused on improving our customer relationship management (CRM) system. It has required getting groups across the organization to change and scale a critical piece of our infrastructure. We pulled together people from operations, risk, revenue, tech, product, finance, international, legal, and compliance.

I found early on that coleading this project successfully meant focusing on three central tasks, all of which revolve around communication.

Persuade Using Common Pain Points

To make any cross-functional project work, you first have to get broad agreement around the core problem to solve. This can be trickier than it sounds. People who have spent years in silos may not be used to hearing about the challenges other departments face — or, even with good intentions, might not have the bandwidth to think much about them.

It’s important to first find people’s pain points by gathering information from stakeholders in each department about what they need from the project. Then, in an initial meeting, come equipped with hard facts and data about all of the pain points contributing to the core issue. Help everyone understand why the project is connected to their day-to-day work.

Another way to gain buy-in is to introduce real examples of other companies that have undertaken similar projects, so it’s important to do research in advance. Show how those changes led to solutions for each unit and improvement for the company as a whole. For collaboration to flourish, all participants need to share the commitment and, ideally, the passion for getting the work done.

Negotiate Resources Fairly

Every unit involved in the project will be contributing resources, especially in the forms of funding and employees’ time. Here, it’s important to be mindful of just how much each unit feels it stands to gain from the success of the project. In many cases, these resources should not follow an even split.

I recognized that our project would bring the most benefit to my unit — revenue. But it would also bring big payoffs for the other units. Through collaborative discussions, we came up with a breakdown for how much each unit would contribute.

This doesn’t have to be static. Sometimes, the first part of the project can involve more resources from one department, while later stages shift. And there are always some surprises along the way, so be prepared to renegotiate and be flexible.

Find Common Ground

Throughout the process, different units may have different concerns, frustrations, and experiences. Administrators may discover that permission settings in a new piece of software pose potential problems. Legal and compliance may recognize an unforeseen risk. Managers need to be nimble, take concerns seriously from cross-functional contributors, and act quickly to address these new sticking points. If the team continues with a project despite a flaw raised by one of the units, some of the team’s work may end up being thrown out, in which case, everyone loses.

After two years, my team has completed two of three phases of our project, and we’re seeing early success. One of my fellow managers said to me the other day that we’ve become “partners” in this, watching out for our own employees and for the success of the project as a whole.

None of this means it’s a smooth ride. In driving a cross-functional project to completion, you will have some bumps along the way. Some people won’t like a decision that’s made or will feel that some of their needs are not met. When that happens, we try to avoid casting disagreements as “right versus wrong.” Instead, we establish that we’re working to do our best for all the stakeholders and that we hope the results will speak for themselves.