Digital Transformation & Cross-Functional Teams

One of the important aspects of Digitial Transformation is the introduction of cross-functional teams. A cross-functional team is a group of people with different functional expertise working toward a common goal[1]. Cross-functional teams include people from various departments with different functional expertise working towards a common organizational goal. This teams also might have people from outside of the organization such as suppliers, key customers, etc.

The purpose of the cross-functional team is to facilitate innovation through creative collaboration leading to higher throughput and quick problem resolution. Another purpose of the cross-functional team is to break the silos that typically happen in big organizations and instead try to build bridges for communication. All the people in a cross-functional team have various levels of expertise so even if the posed problem is not solved, it can easily be taken to an “expert” by the team for doubt resolution and a probable way forward. All in all, cross-functional teams do lead to improved coordination across various functional areas.

Cross-functional teams are a necessity for an organization to introduce digital transformation and venture into the field of Digitalization. The most important part of breaking of the silos or creating fast throughput communication bridges between various operational areas in the organization is the key for succeeding in the process of digital transformation. In the Projectified with PMI podcast, “Digital transformation – What it takes”[2], Anand Swaminathan cites an example of the ING company which is one of the largest financial conglomerates, who created cross-functional cross-discipline teams to provide a customer with the full experience of ING products & services. They called such teams as tribes & squads who work towards providing the best possible solution to their customers.

One more example was cited for the medical field where hospitals reorganized the teams to deliver healthcare centered around patient needs thus optimizing the patient throughput and reducing patient wait times. I do agree to the benefits of having cross-functional and/or cross-disciplined teams providing for faster turn around times. But such teams can only provide for faster turn around times till the problems faced are generic and do not require any special/expert in-depth consideration.

When a customer, for instance, comes in with a very specific problem which needs deeper analysis from experts in the area for a proper resolution, cross-functional teams are way more inefficient at handling this kind of situations. An example can be a child who enters an ER complaining of chest pains. Or a customer who already has billions of dollars invested in funds and now wants to move them into crypto. Also, research-intensive tasks such as finding a new DNA sequencing algorithm or optimizing the frequency utilization for a given band will pose some great challenges to cross-functional teams which they will not be able to clear.

In general, any problem which has not been solved previously will be a difficult one for cross-functional teams to handle. Digital transformation has various levels of success depending on the industry type and the way external and internal stakeholders & customers interact with the eco-system. Personally, I see the cross-functional cross-disciplined teams as assembly pipelines[3](progressive assembly) in a broader sense. Of course, it does not mean that the cross-functional cross-disciplined teams work in a sequence without variations. What I mean to suggest is that the efficiency of the cross-functional cross-disciplined team is greatly enhanced by having the “semi-assembled parts” ready! As long as the teams are not going to invent a new “assembly part”, everything should go smoothly.

As I see it, the way these teams are successful is because most of the problems faced by external/internal customers are not new and have already been previously solved. The cross-functional cross-disciplined teams take advantage of the previous experience to provide a faster solution and in doing so add to the previous experience. So my take on the aspect is to regard cross-functional cross-disciplined teams as structural organizations that can reduce the organizational overhead as well as break the silos and increase cross-functional communication.

And it does not mean that specialized organizations and roles are not needed anymore. Specialized organizations and roles just do not solve the already solved problems and hence the increase in efficiency since 90% of the problems are being solved externally from the core/expert group. I have seen organizations deeply involved in research, for instance, taking the cross-functional team as buffered pools for doing systematic research. This has a negative effect on digital transformation hindering the actual output of such research focussed organizations.

Please do post comments as I would like to understand if this is a general sentiment across the industry.

[1] – Krajewski, L. J. and L. P. Ritzman. 2005. Operations Management: Processes and Value Chains. Pearson Education, Upper Saddle River.
[2] – Project Management Institute, Inc (2018). Digital Transformation: What It Takes | Projectified. [online] Pmi.org. Available at: https://www.pmi.org/learning/training-development/projectified-podcast/podcasts/digital-transformation-what-it-takes [Accessed 18 Sep. 2019].
[3] – Wikipedia Contributors (2019). Assembly line. [online] Wikipedia. Available at: https://en.wikipedia.org/wiki/Assembly_line [Accessed 27 Apr. 2019].