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What Is Cross-Functional Collaboration?

Cross-functional collaboration happens when people from different functional areas work toward a shared goal. Functions may be areas of expertise, such as marketing or sales, or they may consist of regions or product lines. Whatever their composition, to benefit the overall organization, these teams need to collaborate effectively and efficiently.

The concept of cross-functional collaboration may sound simple, but a quick Google search turns up more than 155 million hits on the subject. In many ways, cross-functional collaboration is the holy grail of delivering organizational strategy. However, companies spend millions—in some cases, billions—of dollars on restructuring to create alignment across functions, only to repeat the process a few years later when the new cross-functional teams fail to deliver the desired outcomes.

Shouldn’t cross-functional collaboration come easily when you assemble the right team and provide them with the correct tools?

Technically, yes. But most organizations haven’t prepared their team leaders and team members to work together. Even worse, the organization itself is rarely set up to support truly collaborative processes and methods.

Collaboration: What It Is (and What It Ain’t)

Oxford University Press defines collaboration as “the action of working with someone to produce something.” Seems straightforward, right? Yet, in many organizations, people think they’re collaborating when they’re not.

Consider this common scenario. A manager is tasked with solving a problem. She solicits input from a group of stakeholders, which includes department heads and subject matter experts. Then, she proposes a solution based on this feedback and circulates it among the stakeholders for feedback, which she uses to inform her final recommendation.

While it’s true that other individuals are taking part in the process, the manager isn’t collaborating with them. Instead, she’s identifying and selecting a solution on her own.

Collaboration involves bringing stakeholders together to co-create something and reach consensus. That “something” is a project or initiative plan, a decision, a strategy, or a solution to a problem. Whatever the desired result, in a truly collaborative effort, the co-creation process is done by the team; the leader’s role is to support the team in producing that outcome.

This brings us to the first key shift required for a truly collaborative approach. Rather than playing the role of a wise hero with all the answers, team leaders need to shift to the role of facilitator and guide. Leaders need to bring out the best in their teams by keeping them focused and working through the collaborative process to deliver results. This approach calls for new skills, new tools, and new rules for team leaders, team members and, often, the organization as a whole.

Learning—and practicing—collaborative tools and methods is a critical step on the path to seamless cross-functional collaboration. Transitioning to a truly collaborative culture, however, requires leaders to shift how they view the organization and to learn how to operate outside their silos.  

Working Across the Organization

If you’re struggling with cross-functional collaboration, then your challenges lie in the horizontal dimension, first identified in the 1970s with the advent of matrix management (what we refer to as Matrix Management 1.0). While matrix management recognized both the horizontal and the vertical dimensions, it proposed a vertical solution—dual reporting—to address the horizontal challenges faced by increasingly complex organizations. 

Solving cross-functional, or horizontal, issues requires looking at this second dimension and changing how you run the business. Recognizing this second dimension can be a big shift for many organizations, but the horizontal dimension is where processes are run and integration takes place.

To improve cross-functional collaboration now, start with your cross-functional teams. (We know they already exist.) Have each team clearly define their common goal or outcome and ensure that key stakeholders are represented. Whether they manage a cross-functional process or they oversee a project, product or service portfolio, educate everyone on the importance of collaborating with stakeholders from the start, and provide them with collaborative tools to do so.

  • For business processes, develop the team’s skill in mapping a business process end-to-end and identifying the internal customer and supplier relationships along that process.
  • For projects, develop their ability to launch and plan a project so they know who needs to be involved at every stage.
  • For decisions and problems, develop the team’s ability to use collaborative processes and methods and to engage key stakeholders.

For the most part, the horizontal dimension is invisible and ignored. Instead, businesses focus on the vertical dimension, embodied by the organizational chart. This timeless tool shows lines of authority, but it offers no information about how the business actually operates. For insight into the latter, organizations need to map the horizontal dimension.

Failure to address horizontal operations and processes keeps organizations locked in the vertical realm, which always leads to silos. If you’re serious about cross-functional collaboration, start by addressing the root causes of silos and siloed thinking.

Cause 1: Functions Reign Supreme

When the org chart is the primary focus, leaders strive to make their areas of responsibility—and all the people who report to them—as effective and efficient as possible. Makes sense, right? Optimized parts should produce an optimized whole. Too bad this doesn’t work in reality. 

While businesses set long-term and twelve-month organizational goals, departments and divisions in turn translate these goals into specific deliverables for their respective areas. They establish independent benchmarks and incentive plans for division leaders that depend on their group’s performance first—not on the execution of the most important organizational goals. Sometimes leaders reconvene after this process and attempt to integrate their deliverables, or they use performance metrics to hold them accountable to a program goal. However, such measures are typically secondary. As a result, the system creates competition among groups as they scramble for their share of limited resources, and people place the priorities of their division (department, function, etc.) before those of the team—and before those of the organization.

Picture the organization as an orchestra. If every section—strings, percussion, brass, etc.—put itself first, at all times, the result would be less than harmonious. In fact, listening, and responding, to other players is a key musical skill. When functions, departments and even cross-functional teams engage stakeholders and work together with the support of management systems that foster collaboration, then products and services—as well as the supporting operational processes—move smoothly across the organization.

Cause 2: Antiquated Accountability

Accountability systems drive behavior. Unfortunately, outdated accountability systems often undermine collaboration efforts by, first and foremost, measuring success based on achievement of individual goals and by creating a culture of fear and blame.

Align to shared organizational and team goals.

Since we’re trying to improve cross-functional collaboration, accountability needs to align horizontal teams, not vertical or functional teams. Specifically, accountability systems should drive alignment and delivery of prioritized organizational goals, team goals and individual goals.

Let’s look at an example. Innovative Company wants to shift its business model from traditional, printed educational materials to subscription-based online learning. The sales department has revenue and profitability targets, with compensation depending largely on commission. The product department has its own goals related to product usage and sales.

During the first quarter, the sales team discovers that the physical products are both easier to sell and they generate significantly higher revenue, and thus commissions. They focus sales on this area and exceed their targets at the end of the year, but their actions undermine the goals of the product team, which blames sales for their product “failure.” Did the sales team achieve their accountability? Using a vertically focused accountability system, they would because accountability was to their individual performance. No, they didn’t advance the larger organizational strategy, but that was the product team’s goal.

A more effective accountability system would position everyone to focus on the broader organizational goal—the shift to online learning—together. Defining this shared goal and prioritizing it over other goals makes it a cross-functional team goal. Sales, product development, marketing and other stakeholders work toward, and are accountable for, the common goal of promoting online learning.  From there, individual goals are defined to support the team goal. The sales team, for instance, would set up their commission and compensation plan to advance the shared goal. Product development would support sales efforts by improving the sustainability, availability, usability, etc., of online products.

Accountability systems are a great way to drive alignment to organizational and team goals, but they don’t work in a vacuum. By setting up an effective cross-functional structure, and backing it with a prioritized, common goal, the right accountability system will support the sales team’s success and the product development team’s success, while aligning everyone’s efforts with the broader organizational goal.

Stop playing the blame game.

Many outdated accountability systems focus on “what went wrong.” If something goes wrong, find the responsible party and hold that individual accountable. In these punitive systems, few people are willing to take risks, to make decisions or to venture beyond the “areas they control” for fear of incurring leadership’s wrath if things don’t work out. Such fear-based cultures don’t drive innovation or encourage individuals to work across boundaries.

In complex, knowledge-based organizations, interdependency is the norm, and teams drive results. Your accountability system needs to align everyone around shared goals with a focus on team performance. And setting teams up for success starts by giving them time to collaborate and define achievable goals, which creates buy-in and commitment to executing the plan.


Ready to Get Started?

The obstacles preventing cross-functional collaboration in most organizations did not arise overnight, and they can’t be overcome with quick fixes like one-off team-building events—or even with expensive, protracted reorganizations. But they can be overcome. Collaboration starts when organizations recognize what true collaboration is, develop employee skills in using collaborative tools, and upgrade organizational systems to support collaboration.

To learn how to harness the power of teams to deliver cross-functional outcomes, download The Ultimate Guide to Cross-Functional Collaboration or contact us to discuss the specific needs of your organization.