AIPMM: Product Management Articles for Product Management

Teaming with Strangers Success Strategies for Cross-Functional Teams

A new form of teamwork has quietly become a key factor in many of America's most successful and competitive companies, including many insurance companies. And it is making for some strange bedfellows.

Research scientists are meeting with marketing professionals; design engineers are working with purchasing department staff; cost accountants are teaming up with operations managers; and computer programmers and office managers are serving together on systems development teams. In many organizations, eight or more disciplines are working together on cross-functional teams to bring a new product to the marketplace, develop the next generation computer system, design a new layout for a factory floor, produce an important new drug, engineer a complex telecommunications network, prepare a long-term corporate strategy, or implement a procedure to upgrade service quality in a government agency.

In some property and casualty insurance companies, the functional silos have given away to cross-functional account teams that consist of home office and field personnel such as underwriters, account claim executives, account engineering executives and people with skills in pricing, billing, credit and customer service. The outcome is a seamless approach to the total customer relationship.

In the life and health insurance arena, some companies have reorganized the field sales support or policyholder services functions into a team-based, cross-functional organization. In essence, this means going from a service mode where one person handles one function, such as new applications, to a team approach where every team member can handle any request. Once again, the field sales representative or direct customer is the focal point of the collaborative process.

Why is the Industry Using Cross-Functional Teams?

Effective cross-functional teams have many advantages. While some of the pluses apply to other types of teams, too, these advantages have a unique flavor when played out in the context of a cross-functional team. I have found six competitive advantages.

Speed. Cross-functional teams, when they are appropriately empowered, get things done faster, especially product development and customer service.
Complexity. Cross-Functional teams improve an organization's ability to solve complex problems because they bring together people with different skill sets, experiences, perceptions and styles.
Creativity. New product and service breakthroughs come from the clash of ideas, not from interactions among people with similar views.
Customer Focus. Cross-functional teams focus all of the organization's efforts on satisfying a specific internal or external customer or group of customers.
Organizational Learning. Team members pick up technical and professional skills more easily, gain important knowledge about other areas of the organization and learn how to work with people with different styles and cultural backgrounds.
Single Point of Contact. The team promotes more effective and efficient teaming by identifying one place to go for information and decisions about a project or customer.

Success Strategies

On the face of it, cross-functional teams look like a great idea. Just get together a group of people from different parts of the organization, sit them down in a room and good things will happen. Not! There are some obstacles that must be addressed if the benefits of cross-functional teaming are to be realized in your organization.

The Team Leader Must Have Both Technical and Process Skills. The leader must have the technical background to understand the subject of the team's work and to recognize the potential contributions of people from a wide variety of backgrounds. The leader must also have the interpersonal skills to facilitate a diverse group of people with little, no or even negative experiences in working together.
The Team Must Be Empowered To Act Decisively. The senior management sponsors of the team must clarify the limits of authority available to the team. I recommend that the sponsor provide the vision, overarching goal or general set of expectations which the team, in turn, translates into specific objectives and a detailed plan. Once the objectives and plan are approved by the sponsor, the team should be empowered "to do whatever it takes to accomplish the objectives and implement the plan."
Team Objectives Should Be Clear and Specific. If there is one thing everyone is clear about it, it is that successful, high-performing teams have clear performance objectives and unsuccessful teams do not. Objectives are the "scoreboard" against which teams measure their progress and objectives are the "unifying force" that brings together the diverse members and stakeholders represented on a cross-functional team.
Cross-Functional Teams Need Positive Relationships With Key Stakeholders. Senior management, functional department heads, support groups, suppliers, customers and regulatory bodies (e.g., insurance commissions) are among the key people who can provide either pathways or barriers for a cross-functional team. "No team is an island" and, therefore, building effective external relationship is a critical success factor.
Team Members Want "Credit" For Their Performance On The Team. Companies need to examine their performance management system to see whether team behaviors are taken into account and department heads incorporate team member performance data into their appraisals. Some department managers ask team leaders to complete the performance appraisal form for the people who serve on that team while other companies are experimenting with a team member peer review process.
Companies Should Consider Project Team Rewards and Member Recognition. In a team-based organization, companies need to develop a program that rewards a team if it achieves a preannounced objective (e.g., bring a new product to the market by a certain date; increase customer satisfaction by X%). Individual recognition should go to people who are effective team players---people who increase the effectiveness of the team by doing such things as sharing their expertise, pitching in when needed, facilitating meetings and asking the tough, but necessary questions.
Cross-Functional Teams Should Be Small. Many organizations make the mistake of including everyone with some connection to the task. As a result, cross-functional teams are often too large to be effective. We know, and many studies in group psychology confirm, that when a team gets too large, communications and productivity suffer because members feel less accountable and, as a result, their participation decreases. The ideal team has four to seven members---certainly no more than 10 members. If your team is too large, consider simply decreasing the membership, using a core team to make the key decisions or creating small task teams to do the bulk of the work.
Positive Interpersonal Relationships Are Essential. The diverse nature of cross-functional teams usually means that lack of trust, poor interpersonal relationship and conflict are endemic. Therefore, it is important that the organization provide training and consulting designed to develop positive norms, conflict resolution tools, consensus-building techniques and an appreciation of diverse team player styles.
Management Must Support The Team Process. All the good work to create, develop and train teams can be sabotaged by key management stakeholders who do not cooperate or worse, undermine the team process. The senior management team and team sponsors must (a) provide resources such as time, training, funds, people and equipment, (b) "talk and walk" teamwork in everything they do, (3) recognize and reward teams and team players, (4) communicate a set of expectations or overarching goals to the team, (5) break down barriers such as old paradigms and procedures and (6) model teamwork by participating in team building and operating as an effective team.
Front-End Training is a Real Plus. I recommend a kick-off launch session followed quickly by at least two days of basic team training. The launch meeting should include the team sponsor who presents management's expectations or goals and addresses all concerns and questions about the team process. The start-up training addresses such areas as team player skills, establishing norms, meetings management, external relationships and communications.

The insurance industry is making use of cross-functional teams to manage accounts, develop new products and provide customer service. The key to success is to eliminate the barriers by providing the training, consulting and other supports that maximize the benefits.

Glenn Parker is a team building consultant based in New Jersey. He is president of Glenn M. Parker Associates, a company he founded in 1971. This article is based on his session at the 1998 SITE Conference in Boca Raton, Florida. The material is drawn from his best-selling book, Cross-Functional Teams: Working With Allies, Enemies and Other Strangers published by Jossey-Bass. The book was a selection of the Executive Program Book Club and Executive Book Summaries and has been called "a must for anyone charged with managing the future of the business."