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Leadership and Cross Functional Teams
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by Brent Filson
A lot of business trends have been grabbing headlines during the 90s: downsizings, mergers, reorganizations, and reengineerings. But one vital trend has been going on without fanfare. It's the proliferation in all business fields of cross-functional teams. And as far as financial careers are concerned, this trend may be the most important of all.
You know it when you see it. A cross-functional team is made up of participants from a variety of business functions. For instance, one might have a cross-functional team whose aim is to develop a new product. That team might be composed of participants from the company's manufacturing, sales, marketing, and financial functions. Cross-functional teams help companies do more with less. This trend is not going away. Such teams are going to be even more important to business success in the years ahead. How well management accountants and financial managers do on these teams will to a great extent determine the success of your careers.
Most teams that I have observed do not realize their full potential. That's because the team members have a fundamental misunderstanding of what their roles on the team are. They believe that to be good team participants, they must be good team players. Clearly, teamwork is necessary for the success of cross-functional teams — but it is not sufficient. In fact, it is not even the most important thing that participants should do. Participants on these teams should be more than simply good team players. They should be good team leaders. Now I'm not just talking about one person leading a team and the rest being followers. That is the common perception of the way teams operate. But that perception is wrong. Cross-functional teams fail not because of lack of teamwork but lack of leadership. Put another way: Teams operate most efficiently and effectively when every team participant takes leadership in their particular team role.
For instance, a world manufacturer of computer devices put together a cross-functional team to develop a new product. The company was a market leader in a particular industry niche, but its rate of growth was slowing, and its market share was beginning to erode. The new product was to spearhead a family of new products that would help them regain lost share. The team consisted of designers, manufacturers, marketing, sales and financial participants.
Immediately, the financial participants stumbled. They viewed their role on the team as traffic cops, stopping, diverting or releasing the flow of capital. And because of this view, they began to impede the team's ability to develop a new product that was responsive to customer needs. Don't get me wrong: Their playing the role of financial traffic cops was important for the team's success. After all, the team had to use resources efficiently. But being traffic cops exclusively, they often promoted resource-productivity at the expense of product-development, thus limiting the team's effectiveness.
To be truly effective contributors to the team, they had to change their view of their roles. They had to see themselves not just as financial traffic cops but as financial leaders. This change in viewpoint, this change from "doing" the tasks of traffic cops to leading the accomplishment of those tasks, was not simply a fine distinction in definition, but a trigger for action.
To understand how that change in point of view turned them from being a stumbling block against the team to a results' springboard, let's look at what true leadership is supposed to be about. For consulting with financial leaders for more than a dozen years, I've seen one thing stand out: Almost all of them have serious misconceptions about leadership. And these misconceptions prevent them from getting the results they're capable of.
We can dispel these misconceptions by first understanding some fundamental principles of leadership. To do this, I must refer, and defer, to Albert Einstein. Einstein is well known for his special and general theories of relativity. But he is not well known for a magnificent quest that he carried on for some 30 years — and in which he ultimately failed. That was his quest to discover a unified field theory of the universe, to describe the basic forces of the universe in a single equation. And it was a quest that inspired me, in my small way, to find a unified field theory of leadership. Just as there are grand forces driving the activities of the universe, I'm convinced that there are grand forces driving the activities of leadership.
After a number of years of researching, consulting, and writing books and articles about leadership, I have come upon what I call the unified field theory of leadership success, the UFTLS. I describe it as a series of three propositions.
UFTLS Proposition 1. Business success happens when people get results.
At face value, it seems like an obvious, motherhood-and-apple pie proposition. But on a deeper level it may be one of the most misunderstood concepts in business. Many leaders whom I have encountered don't really believe that it is people that get results. They may talk about how people get results; but they walk a different mind set. In their heart of hearts, they believe that machines get results or that numbers get results or that marketing or sales strategies get results — anything but people. So they treat people as the bond servants of those drivers. The old joke that the company of the future will have just two creatures to run it, a man and a dog, the man to feed the dog and the dog to keep the man from touching the machinery encapsulates this mind set.
The fact is, however, that the most effective leadership begins with a passion on the leader's part that the key drivers of all results are people.
For instance, the financial participants had to realize that their expertise was most effectively put to use on the team through the good offices of the other functional participants — in other words, through people. In order to involve others, they had to take the time and expend the resources to understand the needs of the individual people they worked with. It was only when the financial participants understood that it was through the needs of others that they could best employ their expertise on the team were they able to cultivate the right viewpoint to be successful.
UFTLS Proposition 2. Leaders do nothing more important than have people get results. When we talk about leadership and results, we have to go back to Einstein again. Einstein's unifying of time and space led to powerful technological applications, from atomic energy to electronics, that transformed the 20th century. Our unifying two forces, results and leadership, gives us the opportunity to create applications that can transform our world.
Just as there is a space/time continuum in physics, there is a leadership/results continuum in business. The financial members of the team had to realize that leadership is all about getting results, that we cannot separate results from leadership, and that if we are not getting results, we are not leaders, no matter what our position, title or pay level is. So the first step in being a leader is to be clear about the results we have to achieve.
When the financial members at first focused on being traffic cops, they missed sight of the true task of the team, product development. Only when they changed their view of results from an exclusive focus on resource productivity to a strong focus on helping the different functions of the team fulfill the needs of the company's customers did they begin to contribute strongly to that team.
For instance, they developed an economic model that tracked financial measurements of "customer satisfaction." The idea behind the model was that customer satisfaction was not found in surveys but in customer buy-decisions and so the true measure of the product was in the actual buy decisions that customers made. Those buy decisions were first analyzed in test markets. The financial participants worked with other functional members of the team to develop the test market and then develop the tracking model.
Once the financial members clarified the true results they had to get, they had to clarify precisely how they would go about leading to get those results.
The word "have" in the Proposition is a passive word. But in that passiveness is great leadership power. For leaders themselves can't get results — unless we want to lead units that are nothing larger than one-man bands throughout our careers. If we want to progress in their careers, which means if we want to do well being in charge of larger and larger organizational units, we must acquire the knowledge, skills, and experience in "having" others get results.
Proposition 3: The best way to have people get results is to motivate them to take the leadership in achieving those results.
There are two aspects to this proposition, motivation and leadership.
Let's first look at motivation. The word "motivation" begins with two key letters, "mo." We see these letters in such words as "motor," "movement," momentum," mobile," etc. What all the words have in common is physical action. "Motivation" involves physical action. It is not what people think or feel but what they do. Furthermore, motivation is also something we cannot do to anyone. We communicate, the people we want to motivate must motivate themselves. The motivatee and the motivator are always the same person. Finally, motivation involves emotion. The words "emotion" and "motivation" come from the same Latin root word meaning "to move." When we want to move people to take action, we engaged their emotions.
Now let's apply those concepts of motivation to the leadership aspect of Proposition 3.
Our world changes when we understand that we are expected to lead. As long as the financial participants saw themselves in the "doing" mode, they could not realize their full potential on the team. There is a clear difference between team participants "doing" and those same participants "leading." When doing tasks, we simply get jobs done. Period. But as leaders we must do more than do a job. As leaders, we must have a vision of where we are going. We must communicate that vision to others. We must motivate others to get results that realize that vision. When the financial participants saw that they played the most useful role on the team not as traffic cops, as "doers," but instead as financial leaders for developing a good product, they positioned themselves to start to get significant results.
To actually get those results, they had to take right leadership action. The word "leadership" comes from an old Norse word-root meaning "to make go." Indeed, leadership is about making things go — making people go, making organizations go. But the misunderstandings come in when leaders fail to recognize who actually makes what go. Leaders take wrong leadership action when they believe that they themselves must make things go, that if people must go from point A to point B, let's say, that they must order them to go. But order leadership founders today in fast-changing, highly-competitive markets. In this environment, a new kind of leadership must be cultivated — leadership that aims not to order others to go from point A to point B — but instead that aims to motivate them to want to take the leadership in going from point A to point B.
The financial team members took leadership action predicated on their convincing the members of the other functions not simply to use their financial model but to actually be the "cause leaders" of that model. Thus they measured the effectiveness of their leadership by how well their cause leaders led.
For instance, the financial members of the team, instead of using the clumsy, over-used, cost-out approach to the manufacturing component of the cross functional team, instead provided the manufacturing participants with financial tools to better measure the costs of compressing the manufacturing cycle times. Without the manufacturing participants using such financial tools, the cross functional team could not achieve a key goal: to not just produce a new product but to produce a new product that could be manufactured quickly and inexpensively.
Instead of just scrutinizing the sales budget of the new product for ways cut to costs, the financial participants also helped the sales members of the team consult with the financial managers of new customers. Those consultations helped the sales people better sell the new product by getting the financial departments of their customers on their side.
Instead of being just a resource traffic cop for the designers of the new product, the financial participants worked with them to put together cost models for various parts consolations that could be designed into the new product.
A final tip: Beware, when you are a member of a cross functional team, of the Committee Syndrome. The most serious danger that faces every cross-functional team: lies in the danger of its becoming a committee. There is a difference between a committee and a team. A committee usually analyzes and reports on a particular matter. A team on the other hand is supposed to take action to get results. And the difference between committees and teams is leadership.
The worse thing that can happen to the participants of a team is to believe they are acting as a team when in fact they are acting as a committee.
One of the most powerful tools that organizations have to deal with in rapidly changing marketplaces is the cross-functional team. It brings speed, productivity and innovation to organizational activities. Bring speed, productivity, and innovation to your career activities by doing well on the cross functional teams that you participate on. You can do well when you take leadership of the role you must play on that team. Let the UFLS be your polestar in that leadership voyage — not to bring you into a safe harbor, for retirement is the only safe harbor for any career, but to help that career go farther, faster.
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