Several years ago, I was advising the board of directors of a struggling financial services company and suggested, among other actions, that they form a task force of cross-functional members of senior management to focus on companywide strategies for improving profitability. During the task force’s first meeting, one member declared that his functional area was profitable, so while he would be glad to participate in the meetings, it wasn’t his team’s problem to fix. Obviously, this was an immature statement about a very complex problem. Needless to say, that mental midget’s time at the company didn’t last much longer.

Unfortunately, silos and turf battles are a mainstay of corporate life—in healthy and distressed, profitable and unprofitable, growing and declining companies. And unfortunately, when cross-functional teams are designed to solve companywide problems and the silo mentality is not addressed head-on, the project fails more often than not. This is only one of several reasons cross-functional teams are often dysfunctional.

According to research into 95 cross-functional teams conducted by Behnam Tabrizi—a Stanford University professor and author of The Inside Out Effect—nearly 75 percent of them failed on at least three of five criteria: 1) meeting budget; 2) staying on schedule; 3) adhering to specifications; 4) meeting customer expectations; and 5) maintaining alignment with corporate goals. Why? Tabrizi writes, “Teams are hurt by unclear governance, by a lack of accountability, by goals that lack specificity and by organizations’ failure to prioritize the success of cross-functional projects.”

My experience, having consulted with hundreds of companies, is that cross-functional teams fail more often than they succeed, and the reasons can be stated more simply: They often lack leadership, goals, boundaries and measurements of success.

Leadership

Leadership of a cross-functional team—whether it’s to launch a new product, solve a unique systemwide problem or develop a new quality process—is a complex task. These teams are formed on the premise that a big task or huge problem requires a team with broad departmental representation to solve. Therefore, team members are usually a mix of strangers, friends and colleagues with diverse skills, experiences and points of view. There’s both good and bad in this complexity—the whole can be greater than the sum of its parts, but only if the parts don’t tear it apart.

To avoid that, the team leader must have excellent people management skills to recognize silo mentality and turf battles, as well as have the courage to address them. It should be stated up front that team members are expected to work well together and arrive at consensus decisions. Honesty, trust and respect must be developed from the get-go to build positive dynamics.

Another common characteristic of cross-functional teams is that they typically address technical and complex issues, so leadership needs technical knowledge or should acquire it from consultants who are experts in the nitty-gritty issues at hand. Yet they also need an ability to see a big-picture future vision of the completed project, communicate it and fight for it to ensure the team has adequate resources and authority to implement changes companywide. This is not an easy task, and that’s why so many cross-functional teams fail.

Goals

Because of the diversity of cross-functional teams, members come to the table with different views of what needs to be accomplished. They may understand their piece of the puzzle, but few understand what the completed puzzle is supposed to look like. That’s why it’s important for leadership to clearly establish measurable team goals based on the problem or project, such as reduce customer returns by 50 percent, increase profits by 10 percent or gain 20 percent of annual revenue from a new product launch. This helps the project stay on target and makes it easier for team members to communicate goals to their department.

Boundaries

In my experience, nothing feeds the rumor mill or can stir up an organization like a special team or committee. Suddenly everyone is talking about who is on the team or committee, what they said or did, and what it will mean for their department. This can spin out of control quickly, unless the team leader establishes boundaries regarding information flow. Information about what the team is working on should be shared vertically with senior management and horizontally with functional areas, but in a systematized way on a “need to know” basis.

Boundaries should also be established around what the team is supposed to accomplish—and what they are not going to accomplish. “Project creep” can happen in a nanosecond when a diverse group with competing views and goals isn’t reined in.

Measuring/rewarding team success

The diverse nature of cross-functional teams also means that members probably have different ideas of success. If not managed well, cross-functional teams become a competitive arena over turf, recognition and rewards. To promote teamwork instead of competition, rewards should be based on the team’s success rather than individual performance. For instance, recognize those who share their functional expertise freely for the team’s betterment and are willing to stretch outside their comfort zone to help others.

Cross-functional teams succeed when they use an approach of “Keep it simple, stupid” (KISS). When this is done well, your organization will achieve amazing results and keep the dysfunction out of cross-functional teamwork.