Firms are challenged to achieve organizational goals in an environment of increasingly decentralized information. Cross-functional project teams are employed widely as a strategy to facilitate better coordination, yet projects still fail at a rate of 31% per year. Communication is a leading cause of failure. While inter-team communication has been studied extensively, less is understood about the intra-team communication of a cross-functional project team.
The main finding of our study is that the success of a cross-functional team is dependent on the team’s ability to inquire across multiple knowledge boundaries in a way that develops an awareness of each other’s functional identity. Functional identity is defined as the norms and practices of a functional team which represent how they think about and prioritize their work. Whether or not this functional-identity knowledge-sharing process occurs determines whether a cross-functional team is able to construct a shared reality with respect to the projects’ goals and priorities. Achieving a shared reality is what enables a team to perform successfully. We call the understanding of another’s functional identity, constructed through a process of inquiry by the project team’s members, their achievement of interpretive symmetry.
Our findings are from an integrated mixed-methods study. Qualitative results from Study 1 began with the consideration that cross-functional team members live in two social worlds, that of the project team and that of their own functional team. Boundaries on a project exist both from a knowledge and a social membership perspective. Therefore, team members must engage in a process of inquiry across these boundaries. We found that successful teams have a receptive awareness that the project team does not “know” and needs to learn. This receptivity supported the team members in their open inquiry with one another and the sharing of not only functional knowledge but functional identity. Exposing these elements proved necessary for the project team when negotiating a shared reality that was essential to their project’s success.
In Study 2, we sought to validate how functional identity positively influenced performance. Using a quantitative survey, we found that functional identity was mediated by the ability to learn and understand someone in a different function which increased project team performance. We noted that functional identity alone did not affect a project team’s performance. Together with findings from Study 1, we concluded that the acts of eliciting and verbalizing a functional team’s practices allow team members to share their functional identity, and this, in turn, leads to performance.
Continuing on this line of inquiry, we sought to understand through analysis of cross-functional team dialogue how functional identity played a role in the construction of shared reality. In Study 3, we found that teams with shared reality were accepting of explanations of functional identity while teams without a shared reality questioned identity. Whether functional identity was accepted or questioned was linked to the team’s shared reality or lack of one surrounding their project goal.
Shared reality is a relational theory that considers the interrelationships among the pieces within the organizational structures we create. Functional team members exist in relationship to the firm and its purpose as part of their own ongoing reality and identity. Project goals are formed to serve a firm’s purpose. We found that when a project goal was not consistent with firm purpose, identity is called into question because of this ongoing interrelationship between organization and identity. A lack of alignment between goal and firm purpose prohibits the team from developing a shared reality. This was evidenced by the questioning of identity in project teams without shared reality.
In summary, as the theory of shared reality instructs us, everything exists in relationship to each other. In the case of this mixed-methods study, we find that the project team, the functional team, and the organization have an orientation to one another that is important to understand for the purpose of developing a shared reality. We demonstrated how the surfacing and communication of functional identity played a central role in uncovering this orientation and constructing a shared reality for the project team that supported their success.
In constructing a shared reality, the project team must not only take into account their relationships across their functional boundaries but must also contend with their relationship to the firm as well. Project goals that are founded in firm purpose are an additional crucial component needed to construct a shared reality. This study contributes to our knowledge on intra-team communication, cross-boundary teaming, functional identity, and shared goals, and provides empirical evidence for shared reality.