Companies must implement alternative organizational models, strengthen roles that facilitate collaboration and improve the skills of their employees

It is time to go beyond cross-functional collaboration. Companies need to implement alternative organizational models, strengthen roles that facilitate collaboration and improve the skills of their employees to respond to rising competitive pressure. These are the main results of a recent study conducted by Roland Berger Strategy Consultants among 20 companies from various industries. The study analyzed how companies can go beyond "traditional", taskforce-based cross-functional collaboration.

"Functions still dominate today's corporate structures, but that won't be enough to meet tomorrow's requirements," says Thomas Rinn, Partner at Roland Berger Strategy Consultants. The reasons are manifold: Increasing customer requirements, growing global competition and exhausted "functional" potentials – these demand that companies realize synergies through cross-functional integration.

Most companies rely on "traditional", taskforce-based cross-functional collaboration to overcome functional barriers, such as joint sourcing teams comprising purchasing, development and production. However, this "traditional" approach towards cross-functional collaboration is often not successful. Based on over 20 interviews, Roland Berger attributes this outcome mainly to insufficient incentives, responsibles' fear of losing power and insufficient internal resources.

Need to go beyond "traditional" cross-functional collaboration

Therefore, companies need to adapt their management system to go beyond "traditional" cross-functional collaboration.

To implement successful cross-functional collaboration, three elements are crucial:
1. Implement alternative organizational models: Network structures in particular will gain importance. At the moment, many companies drive cross-functional collaboration based on project structures, combining their traditional line organization with institutionalized project management. Network structures across functions, countries and hierarchical levels are better suited to enforce successful cross-functional collaboration.
2. Companies need to strengthen roles that facilitate collaboration; especially the staff that operationally drive or support a project, process or task and moderate between different stakeholders will become more and more important in the future. Successful companies actively strengthen these roles and employees in terms of responsibility and career opportunities.
3. Companies need to improve the skills of their employees to prepare them for less hierarchical and structured environments. Employees have to be able to see the "big picture" and to develop the ability to convince and persuade without having the authority to give orders. Active change management and open communication can facilitate faster acceptance on all hierarchical levels.

Systematic change management is required

Going beyond "traditional" cross-functional collaboration implies a fundamental change for most companies. Systematic change management is required to be successful. Nevertheless, many companies are prepared to implement major organizational changes. "Organizations dominated by functions do not fit today's needs. Companies should look for a more tailored solution and implement systematic change management to make the new setup successful," states Dr. Sebastian Durst, Project Manager at Roland Berger.