What is a cross-functional team? A cross-functional team is a group of people with a variety of expertise who come together to achieve a common goal. It typically includes employees from all levels of an organization.

When you think about cross-functional teams, which one of these scenarios most closely matches your first reaction?

They're like "The Avengers"! Everyone brings together their unique super powers to conquer a challenge.
Cringe! You're having flashbacks to those group projects you hated in school: misunderstandings, disagreements, procrastination, that one guy who spaced on everything. …

The truth is that cross-functional teams can go either way. When they work well, these teams speed innovation and enhance members' skills and job satisfaction.

And when they don't? There's nothing like wasting a bunch of time and energy without getting results (unless increased stress and animosity is what you’re seeking).

So how can you help make any cross-functional team that you're a part of – or even leading – more, well, functional? We've got your complete guide.

What is a cross-functional team?

We typically think about teams as groups of people who have similar jobs – the marketing team, the IT department, the sales division. A cross-functional team, however, brings together people with different kinds of expertise or from different departments in your organization.

A cross-functional team may have members from different seniority levels. It might also have special decision-making power. For example, the team presents its plan on a project directly to the CEO instead of running it through the usual approval process.

Cross-functional teams get a lot of buzz today, but they're not new. They've been successfully used in industries from insurance to auto manufacturing to technology.

The different kinds of cross-functional teams

Cross-functional teams work in different ways in different kinds of organizations. Startups and small businesses are often cross-functional just by the nature of their size. They're not big enough to have specialized teams, so employees from different expertise areas automatically work together on most projects or decisions.

What actually creates innovation is bringing together people with diverse knowledge and experiences.

Larger companies may set up a cross-functional team as a working group to address a specific project or goal. In other words, they still have individual, specialized departments. But, separate from that structure, employees from different departments come together on a cross-functional team for a stated purpose.

At other larger companies, cross-functional teams are the primary structure.

Why create a cross-functional team?

Cross-functional teams address the challenges of our modern business environment. Things are changing pretty fast out there, and it takes consistent innovation just to survive.

We tend to assume innovation comes from "lone geniuses." But research is debunking that stereotype and showing us that what actually creates innovation is bringing together people with diverse knowledge and experiences. Nobody has all the answers anymore, but smart collaboration sparks those answers.

Cross-functional teams make good business sense in other ways as well. They can help companies move faster and more efficiently, and even give a new project a "trial run" before hiring a new full-time team for it.

A cross-functional team is more likely to challenge the status quo and find better ways to do things.

They can also fight the scourge of groupthink. When everyone in the room thinks similarly or comes from a similar background, it's easy to overlook problems or to let old assumptions go unquestioned. A cross-functional team is more likely to challenge the status quo and find better ways to do things.

Finally, these teams can help develop, engage and retain team members. They build a sense of cohesion and collaboration. Employees feel more connected to the organization as a whole, instead of just their own department. Such teams can also expose employees to new knowledge areas and give them a chance to improve skills like relationship-building and problem-solving. When employees are learning and growing, they're a lot more likely to stick around.

What are the challenges of cross-functional teams?

All that said, it might surprise you to learn that about 75% of cross-functional teams are dysfunctional. So what's going wrong with these teams?

Sometimes a cross-functional team is tasked with a fuzzy or ill-defined mission. The team may not be given (or may fail to quickly decide) key parameters, such as how long they have to achieve their goal and how much they can spend. With no clear goal and no path to get there, a team gets stuck spinning its wheels.

Another big reason that cross-functional teams get off track is that members have competing priorities or obligations. They focus on looking after their own interests or their department's interests instead of the team goal.

That's not the only personnel issue that can derail cross-functional teams. When a team includes members with at different levels, power dynamics can get tricky.

And then there's the simple fact that cross-functional teams are extra work for members who are also part of a departmental team. That creates stress, pressure and frustration, especially if some on the team are falling short.

But even if a team is working efficiently and professionally, it can end up being ineffective if it lacks the authority to take action and gets hung up waiting on approvals or decisions from organization leaders.

Productive cross-functional teams start with clarity

Now let's start figuring out how to make your cross-functional team one of the innovative ones, not one that gets bogged down in confusion and conflict.

The first thing your team needs is a big dose of clarity. What are the specific goals of this team? Everyone must be on the same page about what success will look like. That's important for any team, of course. But it's even more vital for cross-functional teams because members often operate from different mindsets and sets of assumptions. They might not share the common language that a departmental team does.

Team members must feel safe speaking up, even if they are disagreeing.

Besides the big goal, establish the milestones along the way. Since your team is probably not seeing each other or communicating every day, this gives members a clearer sense of what's going on and what happens next.

We want to throw in a quick plug here for the goal-setting framework known as OKRs. That stands for objectives and key results. At Atlassian, we've found that using OKRs creates greater alignment, flexibility, accountability, and focus. If you want to try out this framework to set goals for your cross-functional team, check out our complete guide to OKRs.

Talking about the practical limitations your team is facing isn't quite as motivational as goal setting, but it's just as necessary. You'll be more efficient when everyone knows your budget and deadlines.

These discussions should happen when you're starting a new cross-functional team. That said, it's never too late to have them to get an existing team back on track.

Who should be on your cross-functional team?

When you know your team's goals, then you can figure out who should be on the team. Here are a few criteria to consider:

What kinds of expertise do you need? Who are the people in your organization who could provide it?
Besides their specific skills, team members should also have the personal qualities that will make them valuable contributors. Do they have past experience with cross-functional collaborations? Can they work independently and make recommendations or decisions?
Don't forget about the more political practicalities. If your team is focused on launching a project or making a decision, who are the stakeholders? Each stakeholder group should be represented on your team.

Choosing a leader

Your cross-functional team doesn't have to have a leader, but it will work a whole lot better with one. So who should that person be?

The leader of a cross-functional team must be able to guide discussions, to delegate and hold other members accountable. They need to be able to do this even if some team members rank above them in the corporate hierarchy. In other words, can they get people to do things even if they don't have the formal authority to tell them what to do? Can they use influence and persuasion to guide others?

Setting the ground rules for a cross-functional team

Once a leader is in place, one of the first things they should do is work with the rest of the team to establish ground rules about how things will get done. Again, this is something really valuable to do when a team is launching, but it’s never too late to do on an existing team.

First, get super clear about what's expected of everyone. Each member needs to do their share so that no one feels overburdened.

In addition to clear expectations on contributions, your team also needs a clear sense of how everyone is expected to behave. Team members must feel safe speaking up, even if they are disagreeing. Cross-functional teams are all about finding better solutions by bringing together diverse people. But you can't reach those solutions unless you can effectively navigate your differences.

Finally, everyone should be clear on how your team will make decisions. Does everyone weigh in on everything? When can the team leader act unilaterally?

Another fundamental step for building a successful cross-functional team is choosing the right communications tools. You will probably not see one another every day, so you'll be using these tools a lot. And if you have members across different locations, your communications tools will be the primary way you collaborate. Think creatively here. For example, instead of sending lots of emails, perhaps a shared blog would work well for your team.

Besides your communications channels, you might need other tools and resources. Consider questions like these:

Does everyone on the team have the hardware and software they need to work together?
Do you need physical or virtual space to store resources and materials for your work? Can everyone on the team access this space?
If your team has in-person meetings, where will they happen?

Keep your cross-functional team on track

Whether you're helping build a new cross-functional team or tuning up an existing one, we hope you're coming away from this article with a new sense of clarity and momentum. Here are a few things you can do to keep that going:

Regularly monitor your team's progress. This is where having those well-defined goals comes in. Are you meeting the milestones you set? Try using the team health monitor to get to the heart of the matter with the team health monitor Confluence templates to get started.
Stay adaptable. If you're not meeting milestones, what should you do differently? You may also have to respond to other changes in your plans. For example, the CEO may change your deadline, or unexpected layoffs could claim some of your team members.
Remember, you don't have to go it alone. Confluence has resources to help you handle the challenges of cross-functional teams, from goal-setting to meetings to decision-making.

Goals, signals, measures template

Distinguish the signal from the noise in setting your team’s goals

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DACI: Decision documentation template

Effectively guide your team in making informed group-decisions

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