What are Cross-Functional Teams?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 12 October 2019
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Cross-functional teams are units in a business which include members drawn from multiple departments in the business. The team may be assembled on a temporary basis to work on a specific objective and short term goal, or it may be a permanent unit which is designed to address ongoing issues in the business. Using cross-functional teams can be a highly effective business strategy for companies in many different industries.

The origins of the cross-functional team appear to lie in the 1950s, when companies first started exploring the idea of assembling teams with members drawn from multiple departments. By combining people with different areas of experience and skill, a company can create a very small functional unit which is capable of accomplishing a great deal. For example, a company working on the development of a new product can move the process along much more quickly with cross-functional teams than it would by stepping the product sequentially from department to department.


The members of a cross-functional team work together, but they also keep the needs of their home departments in mind. For example, someone from marketing will remember marketing needs when discussing goals with members of the team and may shape the direction of decisions made by the team in a way which will benefit the marketing department. Likewise, a person from the department which focuses on packaging and distribution would consider issues related to this department, and so on. This can reduce inefficiency down the line by ensuring that needs of different departments are considered at every step of the decisionmaking process.

Cross-functional teams can be tasked with making decisions, developing products, and solving problems confronted by the company. They can work quickly and highly efficiently and may be given a great deal of autonomy. Using cross-functional teams in operations can encourage innovation as people may feel more comfortable exploring and presenting new ideas in small groups.

When assembling cross-functional teams, companies need to think about their needs and about how to achieve the right mix of people. Usually a team leader is assigned to coordinate the group, but because the group is small, it is critical to make sure that everyone works well together. Interpersonal conflicts can decrease efficiency in addition to creating an unpleasant work environment, which will make it difficult for the team to meet its goals. Conversely, team members who think too much alike may not make a great team because they will have difficulty seeing the bigger picture or thinking about problems in new ways.


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