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298 PART 4: THE LEADER AS A RELATIONSHIP BUILDER

Exhibit 10.3 Evolution of Teams and Team Leadership

Functional Team Cross-Functional Team Self-Directed Team
• Grouping individuals • Coordinates across • Autonomous, defines
own boundaries
• by activity organization bound- • Member-centered
aries for change
Leader centered
• Vertical or command team projects • Self-managed team
• Leader gives up some
power
• Special purpose team,
problem-solving team
• Special purpose team,
Need for traditional leadership problem-solving team Need for team leadership

Brenham, Texas, is a functional team that tests all incoming ingredients to make
sure only the best products go into the company’s ice cream. A fi nancial analysis
department, a human resources department, and a sales department are all func-
tional or vertical teams. Each is created by the organization within the vertical
hierarchy to attain specifi c goals through members’ joint activities.

Cross-functional team Cross-Functional Teams As the name implies, cross-functional teams are made up
Cross-functional team
team made up of members from
team made up of members from of members from different functional departments within the organization. Em-
different functional departments
different functional departments
within an organization ployees are generally from about the same hierarchical level in the organization,
within an organization
although cross-functional teams sometimes cross vertical as well as horizontal

boundaries. Cross-functional teams typically have a specific team leader and coor-
dinate across boundaries to lead change projects, such as creating a new product
in a manufacturing organization or developing an interdisciplinary curriculum in
a middle school. Cross-functional teams are generally involved in projects that af-
fect several departments and therefore require that many views be considered.
Cross-functional teams facilitate information sharing across functional
boundaries, generate suggestions for coordinating the departments represented,
develop new ideas and solutions for existing organizational problems, and assist in
developing new practices or policies. The members of one type of cross-functional
team, the problem-solving or process-improvement team, meet voluntarily to discuss

ways to improve quality, efficiency, and the work environment. Their recommenda-
tions are proposed to top executives for approval.
Another frequent application of cross-functional teams is for change proj-
ects, especially new product innovation, because effectively de-
Action Memo
veloping new products and services requires coordination across
many departments. IBM uses cross-functional “swat teams” that
As a leader, you can create a cross-
work directly with clients such as Wal-Mart, Charles Schwab, and
functional team to handle a change
the Mayo Clinic to design products and services to solve specifi c
project, such as product innovation, that
problems. At Charles Schwab, for example, the company’s exten-
requires coordination across departmental
sive portfolio analysis using Forecaster software was supposed to
boundaries. Use a problem-solving or
inspire more trading and higher commissions, but it was so slow that
process-improvement team to initiate ideas
it was turning customers off. An IBM team of hardware, software,
for improving quality and effi ciency.
research, strategy, and sales people came up with the idea of organiz-
ing all of Schwab’s computers into a so-called “grid” that functions