Setting up a Cross-Functional Team

Working Effectively With Other Departments

Setting Up a Cross-Functional Team - Working Effectively With Other Functions

© iStockphoto

Learn how to manage a team that covers several different tasks.

If you've ever worked in a cross-functional team – that is, a team that includes people from different departments in your organization – you'll know how much of a challenge it can be.

For instance, who should lead the group? Will everyone be motivated to meet the team's objectives? And how can people balance the needs of the team with their responsibilities of their day-to-day role?

In this article, we'll look at what a cross-functional team is, and we'll explore the challenges behind setting one up. We'll also look at strategies that will help your team to succeed, right from the start.


Although we're exploring setting up cross-functional teams inside an organization, you can apply many of these strategies to working collaboratively between organizations, too.

What Is a Cross-Functional Team?

A cross-functional team is simply a team made up of individuals from different functions or departments within an organization.

Teams like this are useful when you need to bring people with different expertise together to solve a problem, or when you want to explore a potential solution. For example, you might put together a team made up of people from finance, engineering, production, and procurement to come up with a solution to reduce the lead-time for a new product.

One approach is for team members to be "loaned" full-time to the cross-functional team, returning to their day-to-day role once their contribution has finished. Alternatively, they may work on a part-time basis, continuing with their existing responsibilities alongside their cross-functional work.

The most important distinction between the creation of a cross-functional team and the formation of a new department is that members of a cross-functional team maintain substantial links to their day-to-day responsibilities and to managers in their "home" department.


Projects often involve people from a variety of functions. However, projects tend to have a more formal structure, have set deliverables and timelines, and have a definite end point. A cross-functional team is more likely to be used when the team has an ongoing responsibility, or when the team is meeting for a short period of time to solve a problem.

Challenges of Cross-Functional Teams

It's always a challenge to create a new team, but setting up a cross-functional team has additional difficulties.

For instance:

  • Team members may still be doing their "day jobs," with the same responsibilities, workload, and deadlines as before. This can lead to prioritization issues.
  • People might be reluctant to participate, and may not be happy to take on the additional work and effort that being part of a cross-functional team often requires. (This may be true for you, too!)
  • It's more difficult to set priorities, make decisions, motivate people, and manage performance when you don't have direct authority over members of the team.
  • Team members may be required to use a different set of skills in a new environment. For example, a programmer who normally works alone may now be required to work with others.

How to Set up a Cross-Functional Team

If you're tasked with setting up a cross-functional team, use these strategies to give your team the best chance of success:

1. Set Objectives

Begin by setting a goal for your team. What are its objectives, and why has it been set up?

Create a Team Charter to clarify these objectives and identify the resources that the team can call upon. Get these objectives agreed with senior managers in the organization, and by the managers of the departments affected by your new team.

2. Define Roles and Select the Right Team Members

Once you have an idea of what you want to achieve with your team, you can identify the roles that you need to fill, and the types of people you want in those roles. (Bear in mind, however, that you may need to select your team based on who's available at the time.)

When defining roles, remember to think about more than just the technical expertise each person should have. For example, will they need good communications skills, or good decision making skills? Or, will they need to be able to work to tight deadlines?

Finding This Article Useful?

You can learn another 276 team management skills, like this, by joining the Mind Tools Club.

Join the Mind Tools Club Today!

Once you have team members on board, work through the Team Charter with them to make sure that you're all working to achieve the same objectives. Update your Team Charter if necessary.

It's also important to give people the opportunity to talk through how they see things. Be really clear about what you can decide as a team, and what has already been agreed by more senior people.

Tip 1:

Don't be tempted to take "the easy option" when it comes to team selection – use the best people available, even if they don't necessarily agree with your views or your ways of working.

Tip 2:

Team members will likely go through several predictable stages, as they move from being strangers to forming an effective team. Read our article on Forming, Storming, Norming and Performing for more on this.

Tip 3:

Although having shared goals and objectives will help to motivate people, you'll likely need to motivate them in other ways too, especially if they were reluctant to join the team. Our article on Motivating Your Team looks at how you can motivate people effectively.

3. Consider Resources and Logistics

It seems obvious, but new teams need access to all normal, basic resources, and it's worth making sure you've thought about everything that you need to organize.

For instance:

  • Do you need dedicated team space?
  • Does the team need a budget against which team members book time or other costs?
  • Do team members have access to all of the hardware and software needed to do the job?
  • Do you need to set up a shared area for storing files and documents?

If possible, make sure that everything is in place before your people start working together.

4. Establish Ways of Working

With a new team, you can't make any assumptions about the processes that the team will use to meet its objectives. Instead, you need guidelines in place that explain how the team will work together.

Here are some areas to consider:

  • How will your team meetings operate? Is it acceptable is it to be late to meetings? Do you always start on time, or do you wait for latecomers? How are meetings structured? Is an agenda sent out in advance of the meeting, and, if so, how far in advance will it be sent?
  • Are team members copied into all correspondence? Or only into correspondence about certain things?
  • Are team members expected to be "always available," or is it accepted that people will have times when they can't be contacted?
  • Who is involved in making decisions, and how are they made? Who is told about these decisions?

Once you've agreed how your people will work together, add this to your Team Charter.

5. Adopt the Right Leadership Style

Overall authority for your cross-functional team will probably lie with senior managers, sponsors, or a steering group. However, the team will likely be expected to make day-to-day decisions without their input, so you (or someone on the team) will need to lead the team toward its objectives.

As the team's leader, you'll probably be leading equals as you won't have direct authority over many of your team members. So, you'll need to use a more persuasive leadership style, rather than a controlling approach, to help them set their priorities. Often, this involves functioning as a coach, helping people make their own decisions and solve their own problems, rather than as a traditional manager who issues orders and distributes tasks.

With this in mind, try to involve everyone in making decisions – our article on Organizing Team Decision-Making shows you how to do this.

Also, establish your credentials early on, so that you can gain respect from your team.

6. Negotiate and Communicate

Naturally, there will be times where team members have priorities that conflict with their day-to-day roles, and you may sometimes need to seek advice from your sponsor or steering group to take things forward.

However, you can often avoid issues by first negotiating a solution that works well for everyone. (Tools such as the Influence Model and Win-Win Negotiation will help you do this.)

It's also important that you communicate effectively with everyone affected by your cross-functional team, including your people's day-to-day managers – stakeholder analysis will help you to identify who these key people are.


You may find that having a Steering Group is helpful. This gives you an opportunity to report the same information to key stakeholders at the same time. Working with a steering group can help you build consensus and wider support for your team's decisions, and you'll get help resolving issues along the way.

Key Points

A cross-functional team is a team made up of people from different functions or departments in an organization.

These types of teams are useful when you need to bring together expertise to solve an issue, or to explore potential solutions. However, setting up a cross-functional team can sometimes bring difficulties.

You can overcome these challenges by setting objectives early on, and by getting your team, and key managers, to agree to them.

You also need to establish the processes that your team will use, and use the right leadership style.

It's also vital to have good negotiation skills and to communicate effectively with key stakeholders.

This site teaches you the skills you need for a happy and successful career; and this is just one of many tools and resources that you'll find here at Mind Tools. Subscribe to our free newsletter, or join the Mind Tools Club and really supercharge your career!

Rate this resource

Comments (8)
  • Over a month ago BillT wrote
    Hi hrdina1,

    Thank you for that great feedback, and such a demonstrative example of how teams can and cannot be effective, depending on how they are set up.

    One thing I have found useful in cross-functional teams is visual management - a way to illustrate progress in projects that everyone can see and be informed by.

    Mind Tools Team
  • Over a month ago hrdina1 wrote
    Brilliant article! Thank you for it.

    I have worked on couple of projects where cross-department cooperation was needed. At some point we had to decide if creation of cross-functional team makes sense and why. As alternative to cross-functional team we considered cross-department meetings organized ad-hoc when some decision had to be made. Downside of such approach is inconsistent cross-functional cooperation in time. For justification of the team existence we were discussing how frequently such a team could be leveraged and useful. And on some projects this question was not easy to answer on the beginning. In such cases the cross-functional team was either not created at all or was created later - usually when the project encountered serious issues.

    I believe it is important to decide on the team existence early in project. One of important factors for such decision maid be company culture and previous experience with work in cross-functional teams.
  • Over a month ago BillT wrote
    Hello Paul,

    Thanks for that. Which piece did you find most interesting?
View All Comments