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In 2025 working in cross-functional teams is not only commonplace, it is crucial to deliver great products and services that delight customers. While such teams alone aren’t a silver bullet, they are an essential ingredient in getting the best out of people with diverse skills and bringing them to bear on delivering value efficiently and effectively.
This guide covers the essentials of cross-functional teams and best practice today, common challenges organisations face, and a number of emerging themes that are important to consider at the team and organisational level.
We will address:
Where did the idea of cross-functional teams come from and why?
How are they implemented and optimised?
What are the challenges in organising in this way, and what solutions are emerging to meet those challenges?
Some real-world examples of cross-functional teams in action
What does the future look like for cross-functional teams
And finally we will look at some recommendations for optimising cross-functional teams in your organisation.
The recently published Business Agility Report shows that on a macro level there is a growing sense of agility and nimbleness across organisations globally, with countries and regions echoing this sentiment. However, beneath these successes lie key hurdles that are still standing in the way of increasing and maturing business agility.
Let’s dive into the key sub-themes underpinning the top three challenges to business performance in 2025 and explore specific actions you can take today to address them. Each section also includes a detailed discussion video where Maria and Martin delve deeper into the topics.
“In times of stress, leaders often fall back on old methods and routines that may no longer be effective.” - Maria Muir
The Rise of Cross-Functional Teams
A cross-functional team (also known as a multi-disciplinary team) is a group of roughly five to ten people that includes a broad enough set of roles or disciplines for it to get most, if not all, of its work done without external support.
Our friends at Sooner Safer Happier trace the origins of cross-functional teams back to hunter–gatherer times – they are not a new concept, and in many ways are how human beings collaborate naturally to achieve a goal.
When siloed working made sense
The industrial revolution's focus on efficiency led to specialized roles, mirroring machine functions. This division of labor optimized production but created work silos, limiting workers' knowledge to their narrow tasks. This siloed approach became the norm, prioritizing maximum productivity over providing people with understanding the bigger picture.
The need for cross-functional collaboration in the knowledge economy
For a time, this siloed approach worked. The production line made a certain sense when it came to assembling a physical product - keep the blinkers on, don’t get distracted. But then we shifted into the knowledge economy - people using their minds more than their bodies in their work, with machines and AI waiting to take over mundane, repetitive tasks - and the silos started to become a limitation.
It’s taken a while, but bit by bit organisations are coming back to the practical ideas of hunter–gatherer diverse, cross-functional teams, of frequent and low friction collaboration, as the way to make ‘ knowledge work’ - well, work.
Even the factories that still make the big mechanical products are starting to move away from the siloed approach, recognising that people need to connect more to the whole, and to each other. Toyota revolutionalised the automotive industry with what it was able to achieve via the Toyota Production System and the birth place of Lean.
The digital demand for cross-functional working
But if your organisation is building digital products and services, there is an even higher likelihood that you will need a wide range of experts working closely together to launch a new product to market. A good example is the growth market of Generative AI-enhanced products. These products require expert involvement from legal, cyber security, data privacy, marketing and more (Matthew Skelton’s talk The AI-savvy Operating Model is a good explainer of why cross-functional teams are important here, and the perils of not working in this way).
Implementing and Optimising Cross-Functional Teams
Accepting cross-functional teams as a building block of modern business, the next question is how to implement and optimise them. The whole point of such teams is to work together for a shared outcome – but the team needs to know what that is. So at Sooner Safer Happier, they always ask, “What are you optimising for?”. Are you optimising for customer delight, for revenue, for cost efficiency, or something else? All of these decisions come with tradeoffs.
Team composition: the right mix of roles and skills
For most organisations, particularly those working in product development, the next step is to ensure each team has the right mix of roles and skills - what Marty Cagan refers to as Empowered Product teams in this talk. This typically means experts from product, design, engineering and delivery capability; however, this is not a definitive list and may also include marketing, data, even sales and customer success, depending on the nature of the team and their mission.
John Cutler takes this a step further in his illuminating diagram of the journey to product teams, which talks about the accountability of the team broadening to encompass all that the team needs to be able to deliver value.
To use a software engineering example, this means having a broad set of skills to architect, build, test, and run the product or service the team is responsible for. Too often in these teams, divisions of labour persist (for example, separate functions for testing, support, release management, engineering, and so on) and the process is optimised for individual capabilities rather than the team’s delivery of value to customers.
Broad but deep expertise
The ideal team capability model is to have individuals with sufficient breadth across the required capability but crucially deep expertise in a few specific areas. This is in contrast to individuals who have knowledge and skills in many areas but without that deep understanding.
You might have heard this referred to as “T-Shaping” - the topic is more nuanced than the shape of a capital letter. The Sooner Safer Happier article on learning ecosystems is a great resource for understanding this topic.
As an aside, not every team has to be cross-functional in nature, for example, a sales team may work well as a single team of people who mostly work independently and interact with prospects and customers more than their colleagues.
That said, your sales, marketing and customer success teams should still regularly interact with your product teams to avoid situations such as sales selling a product that isn’t built yet, marketing missing elements that will allow them to give the product its best chance at success, or customer success coming under fire for something promised and not delivered.
Ultimately, you may decide that giving these functions a voice within your cross-functional teams is the best way to ensure the highest possible delivery of value to your customers.
Organising multiple teams for cohesion and value delivery
It is not just about optimising for individual teams either – it is also important to consider how teams organise together for example as teams-of-teams or value streams. This can be a game changer or an inhibitor depending on the grouping of teams and the team boundaries. If you are in a situation where there are many cross-team dependencies it may be more effective to bring those teams together either temporarily or more permanently to identify and improve the cross-team interactions. To learn more about a team of teams, check out Stanley McChrystal’s book Team of Teams.
Value streams, Value Networks and other such topics are a worthy topic in their own right. Value streams as a concept have more recently been applied to the notion of knowledge work but originally started out at Toyota in the form of the flow of materials and information required to deliver customer value. Check out John Shook and Mike Rother’s book “Learning to See” for a lot of the original explanation and observations from John’s time at Toyota.
Optimising for flow of value, not the myth of efficiency
Another closely related topic is optimising for the flow of value. In other words, make sure people in teams can do their best work with as few impediments as possible, with short feedback loops to customers or consumers. Optimise the process to reduce the times teams are delayed by handoffs, slowing progress.
A useful analogy is a relay race vs a game of rugby. In the former, individuals are stuck waiting until another person hands over the baton, whereas in the latter people move up and down the field together, checking in, collaborating.
If instead of flow of value, you focus just on the utilisation or busyness of individuals, you will leave people stranded, with no slack in the system for the unexpected or simply unplanned conversations and work that can and should come up in a vibrant, productive, inspiring workplace.
Challenges for Organisations with Cross-Functional Teams
While cross-functional teams are an improvement on siloes, they still require the right infrastructure and support to enable them to work as they should: from overarching strategy alignment to funding models. In this section, we explore some of the challenges that may inhibit the performance of cross-functional teams.
The growth challenge: an increasing number of teams
As new working practices spread within an organization and build on early successes, the number of cross-functional teams within the organisation grows. It does not take long for the number of people working in these teams, and the interactions between the teams to exceed the level of complexity which our ‘social brain’ can work with effectively.
A system providing a single source of truth for teams becomes essential to provide good quality, widely accessible information on what the teams are; their purpose and how they are organised together; who is in the teams, the role they play and the work they are doing – and how that work aligns to strategy and outcomes.
The data underpinning this representation is often either poor quality and fragmented, severely impairing the organisation’s ability to plan well, and to measure and report effectively with the perspective of cross-functional teams.
Without addressing this challenge, the organisation is exposed to increased risks and inefficiencies affecting decision making and the delivery of value for the organisation. Senior leadership experience delays and challenges in obtaining key management information needed to optimise the organisation for better outcomes. The current process for connecting teams and work is inefficient, involves connecting data from multiple systems and spreadsheets, and often omits bottlenecks.
The alignment challenge: pulling together
The better understanding of context teams have, the better able they are to make decisions that will be well aligned and drive outcomes that connect back to the organisation’s strategy. As each team is delivering incremental value towards a common goal, it is essential to ensure a consistent shared understanding of the goal and context around it.
However, in fast moving environments with high degrees of uncertainty, it’s hard to keep the shared context and alignment that enables the fast flow of value to consumers and customers. As the level of cross-team coordination and handover required increases, progress slows. Each team is focused on its own priorities so as soon as one team needs support from another it creates an interrupt.
The hybrid challenge: collaborating without being face to face
Post-COVID, more and more organisations accommodate hybrid working. While the flexibility is to be welcomed, it does mean people who work together can end up having different days in the office, which adds to existing team variables, such as teams in different office locations and timezones.
The impact of this new dynamic is that people need to be far more intentional about how they work, how they communicate and collaborate (synchronously or asynchronously), their boundaries, scope, tooling and practices. Communication within teams and across teams in the hybrid scenario quickly becomes highly complex - both on a day-to-day basis and for longer term planning and goal setting.
It is now less likely that organisations will be able to have completely in-person “big room planning” events, so unless management excludes some people from cross-team planning, online synchronous or asynchronous approaches are essential for teams to plan on the same page.
The funding challenge: project ramp-down and funding delays
When ways of working evolve but ways of funding don’t, it can create major obstacles for teams trying to deliver value for customers and consumers. Too often funding is tied to a particular project and there is no continuous follow-on planned and agreed. Once a project is completed, the team working on it may disband, some individuals leave the organisation, and valuable learnings and expertise are lost.
To meet these challenges, we see a number of practices emerging in forward-thinking organisations.
#1: A connected tooling ecosystem supporting cross-funtional teams
Starting with an organisation's strategic priorities provides a firm base from which cross-functional teams can operate smoothly. From here, any cross-team dependencies can be addressed, and then the individual teams’ priorities. While there is no one-size-fits-all solution, ongoing and transparent discussions with a clear visualisation of work across teams can bring everyone together. This usually includes:
Financial and strategic planning – usually in a Lean Portfolio Management tool which captures clearly defined outcomes with success measures
A team management system such as TeamForm which acts as a single source of truth for cross-functional teams, allocations, structure and planning with a joined up view of people, teams, work and strategy
A work management system (such as a kanban board to visualise and connect teams to work)
Collaborative tooling such as Miro to enable all teams and team members to work together regardless of location and timezone
Our friends at Team Topologies offer guidance on how to address alignment challenges. Their focus is on limiting the number of concerns that individual teams have to address, and which require coordination. A good case study of this thinking in action is Amazon’s 2 Pizza teams approach that they used to create AWS. By defining clear team boundaries and communicating clearly how teams should interact with each other (the Team API), the level of coordinating work and the cognitive burden on individual teams is reduced.
#3: Hybrid working in a cross-functional world
The hybrid working model seems to be here to stay, even if some organisations have started to impose a minimum number of days in the office. As discussed above, this way of working requires people to be much more intentional about how and when they communicate and collaborate. Companies like GitLab have now adopted an async-first model, which includes charters that people sign up to to get the most out of this approach.
#4: Changes to funding models and the impact on planning and delivery
The right funding model is one of the cornerstones of a productive cross-functional team. Moving to more responsive funding models, usually from project-based funding to capacity-based funding, supports long-lived teams that are able to flex and optimise their capabilities to deliver value for the consumer or customer over time, rather than being driven (and disrupted) by project start/end deadlines, often accompanied by delay and hiatus before initiating a follow-on phase of work, and loss of talent as people are re-deployed to other active work in the meantime.
Cross-functional teams in the real world
For examples of companies doing cross-functional teams well, take a look at these resources.
How Miro builds product (article) - some great insight from our friends at Miro on how they work and how they infuse multiple disciplines into their teams to deliver outstanding user experience in everything they do.
How Notion works (video) - another modern organisation with a similar approach, this video further talks about the organisation's structure in addition to how cross-functional teams are working at Notion.
Scaling Agile at Spotify (pdf) - one of the original experience reports from Spotify on how they tackled the fast growth of the organisation from hundreds to thousands of colleagues. Some of the patterns popularised by Spotify have now become common language to many in the industry, e.g. Chapters, Squads and Tribes.
How JP Morgan Applied Team Topologies to Improve Flow in a Market Leading Enterprise Platform (video) - an in-depth talk from a specific area of JP Morgan on how they took a Team Topologies approach to define how teams work and interact with each other, and to reduce and eliminate cross-team dependencies. This is an inspiring talk - especially taking into account the size and complexity of an organisation like JP Morgan.
Howweteam.fyi (site) - Take a look for more examples and case studies. If you know of any great case studies we haven’t mentioned, please reach out to us.
What Will Cross-Functional Teams Look Like In 2025 and Beyond?
It can be fun to speculate and guess what the future holds; in reality there are some trends which appear historically to be accelerating and therefore can be extrapolated upon. One of those is that the pace of change continues to increase. So if you’re not improving, you’re falling behind.
In the case of cross-functional teams, this means it isn’t enough just to set them up and leave them running. Traditional competitors and business models continue to be displaced by startups who understand the need to invest in their teams, and to ensure they can respond fast to new technologies, and societal changes.
Curious minds needed for cross-functional teams
The main requirement? Curious minds. The desire and ability to adapt and continue learning. Businesses need to move away from the hire and fire model that selects people based on the specific skills required for one specific project, this does not support learning as an organisation.
Rather than hiring on the latest technology trends (AI being the latest example), hiring for problem solving, analytical and softskills will yield far better results in both the short and long term. Information is only becoming more accessible through technology, so investing in communities of practice in your organisation will help with cross-pollination of ideas, concepts and practices.
With hybrid and asynchronous working, being able to effectively and efficiently community is becoming more important than ever. These skills will help your organisation take advantage of the possibilities of AI, and so much more too.
A network of teams
Ultimately, this should see cross-functional teams working to achieve a larger outcome, and often far beyond a single team of teams or value stream. Krishna Kumar explores this in his post, Value Networks and Value Streams.
Cell-based teaming and architecture models (referred to as Amoeba Management System, as pioneered by Japanese company Kyocera) are also gaining in popularity. This is a move towards a more independent, more networked or ecosystem-based set of teams. Haier in China is the classic example of this.
Lastly, we refer again to Matthew Skelton’s talk about AI and teaming in which he points out that things are not that different, we just need to be thoughtful and deliberate about how teams work, collaborate and commit.
Recommendations for Organizations Working With Cross-Functional Teams
In terms of steps organizations can take to improve cross-functional teams right now, consider:
Visual work management systems (such as Obeyas, Whiteboards aka information radiators)
Creating clarity within each team on roles and responsibilities, how often they communicate, how they do it, and through which channel (chat vs email vs calls)
Although most organisations are already operating with cross-functional teams in 2025, the chances are that they won’t have a place to see and explore those teams, and that they will not be sufficiently broad in their capabilities from a product team perspective.
Deploying a tool such as TeamForm supports organisations to manage, plan and visualise their cross-functional teams - connecting them to both work and outcomes, and making it easy to find individual teams, contact and collaborate with them.
Conclusion
In 2025, cross-functional teams have proven to be essential drivers of innovation and efficiency in organizations across industries. By fostering collaboration among diverse skill sets and breaking down traditional silos, these teams address the complexities of modern business challenges, enabling organizations to deliver exceptional value to their customers. However, their success depends on intentional design, support, and continuous adaptation to evolving dynamics.
Organizations must remain vigilant about optimizing team composition, aligning teams with strategic outcomes, and adopting new practices to address challenges such as hybrid working, coordination complexities, and funding inefficiencies. Leveraging emerging tools and methodologies like value stream mapping, asynchronous collaboration models, and flexible funding approaches can empower teams to navigate these obstacles effectively.
Ultimately, the key to succeeding in a challenging and dynamic environment lies in cultivating a culture of curiosity, collaboration, and adaptability. By investing in their people, fostering cross-functional collaboration, and embracing innovative frameworks, organisations can ensure they are not only prepared to meet today's demands but are also equipped to drive sustainable growth and innovation in the future.