The Role of Cross-Functional Collaboration in Organizational Efficiency and Success

Businesses face challenges when trying to coordinate efforts across functions. Specialized teams and isolated workflows can make aligning efforts toward a common goal hard.

Fragmentation leads to slow growth and decision-making across functions.

Effective ross-functional collaboration solves these issues by reducing silos in your teams and workflows. It allows small businesses to be competitive.

This article explores what cross-functional collaboration looks like to small businesses. It lists some actionable tips to improve collaboration and highlights challenges that‌ may arise.

What is cross-functional collaboration?

Simply put, cross-functional collaboration is when cross-functional teams work together to achieve a common goal.

Easier said than done.

Siloed teams form cultures and have their own goals and processes. Team leads may instill ways of working that differ from the rest of the business.

Project management aims to bring together different subject-matter expertise to come up with and implement innovative solutions.

Good project managers empower collaboration across teams to achieve common objectives.

A recent survey shows that 83% of digitally maturing companies use cross-functional teams. Companies want to be innovative and nimble (despite organizational structures).

When done right, businesses can amp up organizational culture, deliver great products and services, and boost their bottom line.

Benefits of cross-functional collaboration

Recently, 54% of office workers said that poor employee collaboration costs entities profits. Also, 61% said that it shunts overall business growth.

This shows the value of cross-functional collaboration and how it can affect your business.

Some benefits that a business can gain by fostering cross-functional collaboration include:

Diverse skills and experience

Tackling projects in a cross-functional way brings together a wealth of skills and experience. This is key to better, more innovative solutions.

For example, marketing teams bring customer insights, operations bring logistical experience, and finance teams bring ‌financial expertise.

With diverse perspectives, team members bring new (and better) ways to deliver solutions. When teams work in silos, tunnel vision can easily consume them, and they fail to see the risks or opportunities of complex projects.

Employee engagement

Working in cross-functional teams enriches employees' work experience by allowing them to grow, be recognized, and have a more profound sense of purpose.

Collaborative teams work to deliver projects that span multiple business units. This allows members to see the bigger picture and contribute to company goals.

The interaction also allows team members to learn and develop since they get exposure to different problems, skill sets, and perspectives.

Cross-functional teams break down barriers and keep employees in touch. They also form strong connections with other team members, which is a win-win for everyone.

Innovation

Innovation and creativity ‌come alive when people are exposed to challenges outside their comfort zone. Cross-functional teams put people in such situations since everyone has to bring in ideas, contribute to issues outside their typical job, and think differently.

Cross-functional teams tend to take a comprehensive approach to solving problems. They examine issues from different angles and don't always tie them to a specific niche.

This encourages members to be more creative as healthy debates arise, that lead to innovative solutions.

Common challenges of cross-functional collaboration

Cross-functional collaboration is no silver bullet. It's more about people than their expertise. As such, a few issues can throw a wrench into the workings of a cross-functional team.

Some of these issues are within the cross-functional team, while others relate to how the team is set up and supported within the business.

Lack of trust

As the famous adage goes, trust is earned, not given. Well, this goes for cross-functional teams as well.

The idea is, though, that with time, the team develops a sense of trust. But this isn't always the case. A lack of trust will leave members skeptical and, worse, reserved.

The results are a lack of collaboration, slower decision-making, missed deadlines, and poor outcomes.

To counter this, business owners should be smart when building successful project teams. They should engage the team in trust-building initiatives, and encourage open communication. How? We'll get to that later

Plan team-building exercises that let team members bond and engage outside of work. This could be as simple as weekly (offsite) lunches or as involved as an annual retreat. Doing so will break down barriers and create a sense of unity.

Also, as a leader, encourage and show transparent decision-making to show inclusivity and fairness. Involving the cross-functional team in critical decision-making (like cutting scope out of a project) can work wonders for building trust.

By building trust, you'll create a better space for your cross-functional teams, allowing them to thrive and deliver better outcomes.

Poor collaboration

Speaking of poor collaboration, when info isn’t relayed clearly, it leads to confusion. And when there's confusion, team members start pointing fingers rather than focusing on dealing with the issues at hand.

To solve this, use an Agile project management framework as it fosters open communication. This will be the foundation for the other things you'll do to improve collaboration. It makes it easier since the way it structures the project is in a collaborative manner.

Get a tool to help as well.

A good project management tool will break down all the project elements, assign tasks to team members, and make it easy for them to coordinate efforts. Teams can quickly update the status of their tasks, and call out for support or highlight any action that may be required from another member.

To encourage and empower collaboration, you’ve got to make it easy to do it.

Lack of a document management system

A project with many moving parts can get off-track fast, especially if no central system knits all the information and documents that come with complex projects together.

This can become serious if ‌team members need information to do their job but spend hours looking for it (or worse, can't find it).

To avoid this, you need a document management system (and process) with integration options. For example, in addition to keeping all documents in one system, implement a clear documentation naming format. Even this little bit will help team members find the resources they need (when they need them).

Tips, tools, and tricks to improve collaboration in cross-functional teams

Here are some tips to help you improve collaboration in your business.

Set clear and actionable goals

Starting on the right foot is important for successful cross-functional collaboration.

Business owners should set clear goals up front to ensure everyone is working toward the same thing.

Include key team members in setting these goals so that they can add context to the project.

Doing this will ensure everyone is on the same page and garner buy-in.

Define clear roles and responsibilities

After you've set your goals, you'll want to distill those into clear tasks and responsibilities for your cross-functional project team members.

The RACI model is a great option when mapping out responsibility in a cross-functional team. It details every member’s level of responsibility for tasks in a project.

This way, everyone clearly understands what tasks they're on the hook for (and when.)

Mind the communication channels

Effective communication between team members is paramount.

Agile methodologies encourage communication with ceremonies like daily standups (where team members give quick updates and ask for help when needed).

Agree on a clear communication rhythm and have a tool to support this (see the next tip).

Note that it takes some effort to improve team communication, and you should know that this is a long game.

Make collaboration easier with project management software

We live in a digital era, and you can't run a project involving cross-functional teams without a robust tool that helps the team collaborate.

There are many options in the market, but a good project management tool (like Motion) should have in-app collaboration functionality.

Consider cross-functional collaboration for organizational efficiency

Cross-functional collaboration is necessary for any business looking to succeed.

It helps you get the best out of the talent available in your business by putting them where they can deliver value, resulting in better business outcomes.

If you're looking for a robust tool that facilitates effective collaboration, check out Motion.

The "teams" module organizes complex projects into small tasks so team members can focus (and collaborate) on meaningful work every day.