5 reasons to use cross-functional teams in startups

5 reasons to use cross-functional teams in startups

Wednesday May 11, 2016,

3 min Read

Startups are generally small organisations. Smaller companies have lesser cognitive dilemmas. The fewer number of ‘heads’ has its own advantages. In most startups, decisions are made in cross-functional teams. This is what sets people with an entrepreneurial mindset apart from others: they love freedom of expression and being part of participative decisions. So, unlike traditional large companies, is it a good idea to have no departmental borders in startups?


Well, here are five reasons why cross-functional teams have a positive impact in a startup environment.

Involvement is engagement

The idea of being ‘bossed’ is considered redundant by most founders. Entrepreneurs believe in team spirit and goal congruence. Involving people from various backgrounds by forming cross-functional teams empowers them. This leads to engaging participation, which is an absolutely rewarding feeling for the people involved.

Heterogeneity sparks creativity

Creativity needs non-linear thinking. Cross-functional teams are a great way to brainstorm business ideas. Someone who carries less ‘baggage’ is likely to contribute immensely to the problem-solving process as he or she has a certain openness to look at the issues at hand. Also, connecting unrelated people can make the group think very differently from standard homogeneous teams.

Smart decision-making

A good decision-making process demands holistic thinking. It is a process that takes two extremes into consideration and evaluates both the pros and cons of the problem. In a startup system, there is no singular or ‘right’ answer. In fact, many times articulating the problem is itself a challenge. There are no quick solutions and thus the varied perspectives of team members are often welcomed. Because of the hyper-competitive nature of business, the decisions aim to be ‘smart’ rather than ‘right’.

Solution-minded culture

Bringing smart people together from different backgrounds fuels their passion to solve business dilemmas. A small company needs strong cultural foundations, especially in terms of how people approach issues. Several large companies face the negativity problem, which essentially is the mental block that their employees create when faced with a difficult situation. Successful startups train their people in becoming ‘taskmasters’ rather than ‘paper tigers’.

Healthy competition

The cross-functional team is a mechanism to kindle the competitive spirit. But the idea of such a setup is to propel people to perform in an environment where they can see a variety of skills. Startups are not fun workshops. It takes a lot to make your mark in an organisation that is small and evolving. There might be little or no formal appraisal systems but those who join startups know that it is an uphill task to be counted as a serious cog in the wheel of a newly formed organisation. It throws up several challenges and opens umpteen opportunities too.

Decision-making is not limited to information processing. The nature of information in a startup environment is vague, incomplete and often uncertain. It is about making people smart at reading between the lines. Those companies that can survive the shocks of uncertainty are the ones that establish management control systems that are interactive and non-authoritative.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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