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Jurgen Appelo calls himself a creative networker. But sometimes he's a writer, speaker, trainer, entrepreneur, illustrator, manager, blogger, reader, dreamer, leader, freethinker, or… Dutch guy. Since 2008 Jurgen writes a popular blog at, covering the creative economy, agile management, and personal development. He is the author of the book Management 3.0, which describes the role of the manager in agile organizations. And he wrote the little book How to Change the World, which describes a supermodel for change management. Jurgen is CEO of the business network Happy Melly, and co-founder of the Agile Lean Europe network and the Stoos Network. He is also a speaker who is regularly invited to talk at business seminars and conferences around the world. After studying Software Engineering at the Delft University of Technology, and earning his Master’s degree in 1994, Jurgen Appelo has busied himself starting up and leading a variety of Dutch businesses, always in the position of team leader, manager, or executive. Jurgen has experience in leading a horde of 100 software developers, development managers, project managers, business consultants, service managers, and kangaroos, some of which he hired accidentally. Nowadays he works full-time managing the Happy Melly ecosystem, developing innovative courseware, books, and other types of original content. But sometimes Jurgen puts it all aside to spend time on his ever-growing collection of science fiction and fantasy literature, which he stacks in a self-designed book case. It is 4 meters high. Jurgen lives in Rotterdam (The Netherlands) -- and in Brussels (Belgium) -- with his partner Raoul. He has two kids, and an imaginary hamster called George. Jurgen has posted 145 posts at DZone. You can read more from them at their website. View Full User Profile

Cross-Functional Teams Don't Come Free

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How should people be grouped together? Basically there are two main options to choose from: group people by similar function or by similar business.

Grouping people by similar function means that you put developers with developers, testers with testers, and project managers with project managers. Such groups are called functional units, and the driving motivation behind this kind of structure is efficiency and functional learning. After all, it is easiest for writers of user stories to learn how to be efficient user story writers when they’re all put together in one department called User Story Writing.

Grouping people by similar business means that you put everyone together who works on the delivery of the same business value (the same feature, the same product, or the same customer). Such groups are sometimes called cross-functional units, because all people involved in the same project(s), from user story writers to binary assembly deployers, end up in the same group.

Good communication is both hard and crucial for any organization. It is therefore imperative that we let communication be one of our guiding principles when choosing between the two variants.

Which people need each other most often?

The ones with the same job titles?
Or the ones working on the same project?

If you were to analyze daily communication between employees it would quickly become clear that most of that communication is oriented around the business, and not around the function. People with different functions but working on the same projects need to communicate more frequently than people with the same functions who work on different projects (see figure). We can thus conclude that, for projects, cross-functional teams are a more suitable solution to the grouping problem.

It has been reported that, in organizations where people are grouped by function (sometimes referred to as functional silos), there are too many dependencies between the functional teams. Delivering even the smallest piece of business value (like one feature of a product) requires communication and co-ordination across multiple teams. Functional silos therefore have a high interaction penalty.

However... when you build teams across the functional silos, and not inside the silos, the interaction penalty is lower, but not zero! There are three problems with cross-functional teams: suboptimization at the project level, inefficiencies due to lack of coordination across projects, and reduced expertise because of limited knowledge sharing across specialists [Reinertsen 1997]. So it appears that with cross-functional teams the penalty is paid for synchronization of standards, methods and approaches within one functional discipline across different teams. For example, it will take a quality assurance manager more effort to co-ordinate best practices in testing, when the testers and QA people are spread over multiple teams. But the price being paid here is generally lower than in the case of functional units.

There are several other advantages to cross-functional teams (varyingly referred to as feature teams, project teams, organic teams, or product teams). Several experts report improved design decisions, reduced waste from hand-offs of intermediate products, improved speed, improved adaptability, simplified planning, and focus on delivering value.

But remember, unlike the Dutch score at world cup final, the costs of having cross-functional teams will not stand at zero!

This article will be part of the book Management 3.0: Leading Agile Developers, Developing Agile Leaders. You can follow its progress here.


Published at DZone with permission of its author, Jurgen Appelo. (source)

(Note: Opinions expressed in this article and its replies are the opinions of their respective authors and not those of DZone, Inc.)



Emma Watson replied on Fri, 2012/03/30 - 6:01am

Another good post especially around the costs of having a cross-functional team not standing at zero. Interesting timing in that just recently, I posted a similar article with a sightly different slant on the effects of team structure on enterprise architecture. I compared the team organizational structure of functional versus business aligned.


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