During my 15 years in the corporate world, I have seen several instances where projects fail just because it was managed by a cross functional team. I find that the projects always succeed when it has one leader and a good champion from the top management instead of a whole cross functional team to support.
The author of this article claims that he has studied cross-functional teams in industries such as communications, software, pharmaceuticals, semiconductors, agricultural, chemical, manufacturers, retail, utility, consulting, internet software, government, insurance, and banking and have found a strong correlation between the minority of successful projects and their oversight by a high-level team that was itself cross-functional. The article also states that projects that had a single high level executive champion had a 76 % success rate.
In a detailed study of 95 teams in 25 leading companies, the researchers have found that almost 75% of the cross-functional teams are dysfunctional. The cross functional teams seems to be failing on several criteria such as meeting budget, target dates, specifications customer expectations and aligning with the companies strategies.
The article claims that the main reason for the dysfunction is the team members working in silos. People in a cross functional team usually don’t work well with each other because they have completely different expertise and background. The solution recommended is to create a “Portfolio Governance Team (PGT),” where high-level leaders make complex decisions on the various projects together. As the high level learns to work together, that attitude cascades down and their team members will start to work together. Cisco has created a cross-functional team with representatives from marketing, software engineering, manufacturing, quality assurance, and customer service, to intensify security for router lines. The team had a three-layer structure. Project managers allowed for around 100 people to attend the meetings, but only a core group of 20 had to communicate back to their functions. Above these levels was a small governance team, made up of two vice presidents, the company’s chief development officer and the leader of the core team of 20 people. This implementation of cross-functional governance worked well for that project and several other projects and Cisco is now the number one router security vendor, with business growing at about 80% per year for 5 years.
The following are the recommended rules for the portfolio governance team.
- Every project should have an end-to-end accountable leader:
Instead of having one leader, each functional team should have a leader. E.g. VP of engineering should be the owner for the engineering action items and Director of marketing for marketing activities.
- Every project should have clearly established goals, resources, and deadlines. Before the beginning of any project, there should be an approved budget, and a charter defining priorities, desired outcomes, and timeframes. Establishing those early on is one of the key roles of the PGT.
- Teams should have the project’s success as their main objective. Different members will have other priorities, but for the project to succeed the contribution should be part of the compensation and performance review for each individual.
- Every project should be constantly re-evaluated. PGTs should keep a list of projects and priorities and routinely cut those that aren’t working or that don’t align with business goal
Reference: 75% of the cross-functional teams are dysfunctional by Behnam Tebrizi (HBR)
I think that one of the major contributors to team dysfunction, which your post references, is that the goals of individual team members are not properly aligned. This can result from differing functional goals and more importantly incentives. In my job, I am responsible for Strategic Sourcing initiatives which often involve changing materials in order to drive cost savings. My group often encounters resistance to these changes from Marketing. A lot of this resistance is due to the fact that the Marketing team does not have incentive to cut costs and view a material change only as a risk.
Great post Mirna! This seems against the traditional thinking that cross-functional teams will add values for projects because we are able to view things from different angles. I agree with you that cross-functional team will work only if all these elements exist: accountable leaders, clearly established goals, project success to be part of performance measure, on-going control processes. It is important to have all because missing any of these can result in a dysfunctional team. One project I recently involved in was to redesign our inventory management processes. The goal was to refine the current model and to make it more effective. I have to work with the demand planning team to gather information and better understand processes on their end. I have accountability for this project and it will be part of my performance measures. We have a clearly established goal and everyone understand the goal. However, success of this project is not part of the other team’s performance matrix. I encountered lots of resistance during the information gathering process because this is not the other team’s priority.
I really enjoyed this post. I think the main takeaway for me was #3 on the list of recommended rules for the portfolio governance team. It’s important to remember that every individual has their own goals and objectives in the back of their mind. Without making a project a priority to everyone through compensation or including the project performance in an employee yearly review the project will always be more difficult to complete within budget and on time. It’s also important to have that top level management buy-in. Having a leader that sees the project from start to finish is crucial and has helped prior projects of mine to be successful.
Thank you for this perspective. As Kit said, traditionally, we think of cross-functional teams as able to approach a project with many different perspectives. I have found that clearly established goals, resources, and deadlines are crucial for a cross-functional project. Different groups have different priorities and if there isn’t buy in from the beginning about what the goal of the project is, each project member will go in their own direction. I have also seen group members “check out” when they no longer feel that the project aligns with their understanding of the established goal. If it looks like the project will be a failure, why spend additional time on it when you have other projects demanding your attention. I think it is difficult for project members to have one project as their main objective when members may participate on several projects, but I think it is key for their managers to be bought in on what is expected of them and how their contributions will be evaluated.
Great post! It is true, cross functional teams can be difficult. My company is very flat and there are as many as ten functions that all contribute to the program in different ways. They all have their own functional goals as well as program goals, the prior which tends to take priority. That being said, each function is very important to the successful execution of a project. Without each area’s expertise, it would be more difficult to successfully execute a project. Something my company does is a lot of team building activities. My director may buy us a pizza lunch from Lou’s or we may go out to drinks after work. I work on a $1B project so having us get along is important. If team members understand and respect each other than everything goes more smoothly, even when taking into account that everyone has their own individual goals as well as team goals.
So my question to you all is this? Is they key to project success re-organization and re-structuring, or is it maybe something else? Maybe the answer could be working on company and team engagement to help unite functions. Thoughts?
Great post Mirna! It is important feel project members the ownership of their work, sense of responsibility and achievement both help team members to feel motivated to meet the goals.
Cross functional team members may lack these things and they may set their own priorities as per their biases and this may affect the project outcome due to poor execution and lack of attention to the project. Though we have learned that Matrix system developed as need of an hour but every corporation required different combination of work environment too focused project teams or traditional culture and it is dependent on size and area of the business but sense of responsibility and achievement are critical things for project team members motivation and success of the team.
such a very good and informative stuff also waiting you on a click away of comcast router login