Metrics Blog

The Blog for Business Performance Improvement

How Do I Measure the Effectiveness of Cross-Functional Collaboration?

 

No matter how you define it, diversity is important to every company, and every team within every company, looking to succeed.

Cross-functional groups, which typically consist of stakeholders from different departments, ensure equal representation at the table when decisions are made and changes are plotted. Ultimately, they serve to streamline internal operations and bolster efficiency, productivity, and quality – or, at least, they do when they’re effective. And not many are.

Only a small number of cross-functional teams actually manage to achieve these aims, according to research published in Harvard Business Review. Stanford University Management Science and Engineering Professor Behnam Tabrizi collaborated with fellow academics and consultants to assess the performance of almost 100 cross-functional teams at more than two dozen leading corporations. Tabrizi and his colleagues discovered that three-quarters of these teams failed to meet customer expectations, align with organizational goals, and adhere to established budgets, timelines and project specifications.

So why did these teams fail? Tabrizi linked the dysfunction to a lack of accountability and clearly defined metrics for performance evaluation. To turn this situation around, these and other struggling cross-functional teams must first figure out how to assess their efficacy. Here are some proven and actionable strategies for keeping such diverse working groups in check and ensuring they reach their potential:

1. Make success the primary objective

This may seem like an obvious strategy, but it often falls by the wayside because of the very nature of cross-functional teamwork. Since members hail from different departments, they often have discrete and sometimes conflicting priorities, which can undermine collaboration and set them up to fail. Organizations can prevent this outcome by encouraging team members to place the success of the project above their individual interests. What’s more important is ensuring decisions don’t adversely affect their departments in ways that co-workers from other departments might not notice until it’s too late.

2. Establish project milestones

While quality of output is certainly the most important metric for cross-functional performance, using this indicator alone can also increase the likelihood of dysfunction and failure. Businesses that focus solely on the quality of the end result tend to not track project progress in real-time and address collaborative or operational friction as it arises. This is why experts advise companies to establish milestones that measure progress at each stage of the project. With this multiphase assessment strategy in place, business leaders can not only effectively monitor team performance but also intervene to stabilize projects about to tip over the brink of failure.

Overcoming Challenges in the Paper & Pulp Industry eBook

3. Mandate peer reviews

Cross-functional teams are only as strong as the individual contributors that staff them. Consequently, it is critical that companies looking to assess the effectiveness of these groups also evaluate how individual members perform. Of course, such groups often work in isolation, meaning external parties cannot observe team dynamics and compile feedback on specific members.

Peer reviews are a valuable option here, but enterprise leaders must be careful when using this information to drive improvement. Organizations that have management present peer review results should ensure that the feedback is constructive and framed in a positive way, as studies show that professionals do not respond well to overly negative feedback.

4. Involve outside team members

Cross-functional team members are best equipped to measure holistic success, as they live and breathe project execution. For this reason, many forward-thinking businesses allow these individuals to participate in the design of performance measurement systems for assessing the effectiveness of cross-functional collaboration, according to HBR. Teams can offer unique insights into how these groups should function on a microscopic scale and help build out key performance indicators that accurately contextualize outcomes at every stage of the project. However, business leaders should still provide some oversight and ensure that macro measurements comport with larger business goals.

5. Consider expert assistance

Sometimes operational leaders are ill-equipped to assess the performance of cross-functional work groups. Many shop floor supervisors and business leaders simply do not have enough time to build out effective measurement frameworks. Others lack the expertise needed to execute such tasks. In these scenarios, calling in an external partner can provide a much-needed outside opinion from an expert who has seen firsthand how cross-functional teams fail and how they reclaim what they lost.

Here at USC Consulting Group, we’ve been working with organizations across numerous industries for 50 years, helping them transform their operations and adapt to marketplace shifts of all kinds. Connect with us today to learn more about our experience in team performance assessment, process improvement, and change management.