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Ideas for Leaders #778

Why Cross-functional Teams Need Strong Leaders

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Key Concept

An experimental study of the decision-making process in cross-functional teams reveals the impact of leadership, or lack thereof, on the quality of the teams’ decisions and the satisfaction of team members with those decisions.

Idea Summary

Previous studies have demonstrated the quality of decisions that emerge from cross-functional teams. Most of these studies focus on the outcome of cross-functional deliberations, but not the deliberation process itself. A study built on the simulation of six cross-functional teams reveals that the type of leader or leaders guiding the deliberations of the team will significantly impact the process of decision-making and the resulting satisfaction with the decision from team-members.

The researchers developed their experiment based on a real case involving a major telecommunications company deciding whether to launch a new high-speed Internet access service. In the experiment, five groups of six participants were asked to reach a decision on whether or not to launch the new service, using the information from the shared case. In addition, role sheets, distributed to each participant, identified the participant’s title in the company and the constraints and priorities that stemmed from this position. The other members of the team knew the titles of all participants; the other information on the sheets was kept private. 

A sixth group of six participants also deliberated on the launch of the new service; this was a “control” group: it did not have an assigned leader, and the members of the group were not assigned roles. 

The participants in the experiment were 36 professionals and executives from diverse functions in public and private sector organizations, with an average professional working experience of 10 years. 

A single observer assigned to each of the six groups took notes on such issues as to whether the group was clear on the task, the dynamics of group relationships and member participation, and how the decision was reached (voting, consensus, bullying, etc.).

The results of the experiment revealed the importance of leadership on whether the team arrives at a decision that satisfies the group members.  A quick summary of the results, highlighting the type of leadership, the process through which the ultimate decision was reached, and the satisfaction of group members with the decision demonstrates the link between leadership and success:

Group 1: The leadership was weak, and because he could not bring the group to a consensus, the decision was based on a vote. Minority members were dissatisfied with the decision to launch the service.

Group 2: The leadership was strong, with the leader directing the discussion, and even controlling a team member who tried to dominate the group; after much back-and-forth, a consensus was reached, and the members of the group were satisfied with the decision to launch the service.

Group 3: The leadership was laissez-faire, with the leader retreating when the discussion became too heated. A few aggressive members of the group took over, essentially bullying the other members to agree to delay the service. Most members were dissatisfied with the decision.

Group 4: The leadership was weak, with the leader unable to explain the task—a key role for the group leaders—and unable to direct the discussion. Dominant group members filled the leadership void and successfully pushed for a vote to launch the service. Minority members, who felt their views had been ignored, were dissatisfied.

Group 5: The leadership was overly democratic, with the leader appearing indecisive and refusing to provide clear direction. A single dominant member took control, commandeering a vote to launch the service. Minority members were dissatisfied with the process and outcome.

Group 6: In this group without an assigned leader, a strong leader with superior knowledge and information about the industry emerged, a consensus was reached, and the members of the group were satisfied with the decision to delay the launch until more information could be acquired.

Business Application

This experiment reveals that while diversity of background and experience may strengthen a cross-functional team, leadership plays a key role in whether the team is effective. Specifically, companies can draw four lessons from this simulation that can guide how to create effective cross-functional teams.

  1. Leadership matters. Diversity is valuable but leadership makes the difference between success and failure.
  2. Leadership is not a function of position or formal authority. As shown in this experiment, position authority (in this case, through being assigned the leader) is more likely to lead to the group’s failure. Only one of the five assigned leaders showed the strength necessary to guide the discussion and lead to a consensus. When no leaders were assigned, natural leaders emerged to successfully guide the group. 
  3. Dominance is not leadership. In several of the group, dominant members filled the leadership void by pushing and bullying the group to get their way. In this type of situation, there is little chance of by-in from many of the groups’ members 
  4. Three leadership skills are vital. The successful leaders in this study, whether assigned or emergent, demonstrated persistence, consistency, and the ability to channel the group to make informed choices.
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Authors

Institutions

Source

Idea conceived

  • June 2018

Idea posted

  • November 2020

DOI number

10.13007/778

Subject

Real Time Analytics