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Cross-functional Teams Solving Complex Problems:
A Case Study Analysis

Matthew Howard
Northern Arizona University

PAS 421C: Public Agency Policy
January 26, 2013

Abstract

All case examples and observations come from What Do You Do When Your City is Looking at a Million-Dollar Deficit in the Current Fiscal Year? By Howard R. Balanoff and Charles W. Pinto, 1999.

City Manager Don finds a complex web of problems when he speaks with his department heads about budget irregularities. He discovers incomplete projects and miscalculations, somewhat unethical behavior, and a deep budget deficit threatening to destroy the mayor’s credibility. New to the department, Don can see that his predecessor made the rigid bureaucracy of the city even worse by randomly reassigning people to other departments. Don understands that he needs solid analysis of the city’s projects, a cost benefit analysis that will help him make important decisions about resource allocation. He creates a net work of cross-functional teams where everyone that knows about a project can contribute together. His teams need to understand how their projects relate, and they need to break down barriers created by their current silos to finish those projects. They will also submit, through their team leaders, cost benefit analyses (CBA) on their most critical projects to Don. Don will choose the most strategically important and cost effective projects as priorities, and get a solid grasp of the city’s finances in the process.


Root Causes

In the case study by Balanoff and Pinto, City Manager Don confronts a host of problems. On the surface, they appear as a multitude of complex problems. They stem from a number of underlying causes, which reveal the real root problem Don must solve to make his organization effective again.

Consider Don’s surface problems. His staff has not followed through on overdue projects like the privatization of the sanitation department. Many of the staff got moved around from department to department, creating confusion and stress. Their budget reports fail to accurately reflect staff costs due to shoddy accounting if not unethical practices. When Don tries to ask his team for solutions, everyone has a different idea. Even worse, the problems seem to multiply every time he asks a question. Underlying these problems we see a lack of project oversight and accountability. No one any longer holds people accountable for accuracy, competence, and completion – neither in their projects or their reporting.

These problems underlie his cost problems, but they stem from using ineffective structures to manage the city. Mismanaging through misuse of structures creates significant mismanagement of people. Don’s predecessor and his bureaucratic approach have failed to generate unified vision in the organization. They failed to get the right people in the right roles doing the right things. And, they failed to facilitate communication both within and between teams. Don can address these problems by putting into place the right structures and managing them effectively. But, he will need to move away from the bureaucratic approach and form effective teams to solve his problems.

Why Teams

The bureaucratic structure has broken city administrators into silos, compartments that don’t communicate across departmental ideas to share ideas and often don’t know how their projects affect other departments. Every time Don asks a question, he finds out that one project causes complications for many others. He also finds out that the people who might be experts got bounced into some other department. His predecessor took a slow and non-responsive structure and made it worse by shuffling people like cards.

In the long term, Don really wants to get the right people in the right departments contributing to projects. But in the short and very urgent term, he can get these people working together on cross-functional teams immediately. Don can facilitate these coalitions but need not play a hands-on role. His people know their expertise. Don and his department heads should first draw up a list of key projects that need completed. Then, Don assigns the department heads to communicate to their staff to gather in groups around those projects, regardless of their departmental divisions, and choose a team leader to report directly to Don.

Cross-functional teams may incur some short term cost due to their need to meet and organize. They also run the risk of taking time away from the staff’s prior commitments to work on the team project (Starling, 2011, pp. 315-6). But, Don may have to spend money in the short term to fix the leaks in his financial boats. He needs to green light these teams to lift his department out of the water. In this particular case, he will spend less time and money on confusion and languishing projects. Any important project a person might be taken from is a project a cross-functional team will tackle. In the current mess, people spend time in areas where they are less effective.

If Don makes this commitment to start cross-functional teams, he will benefit. His productivity will go up and so will the level of innovation at the city. His teams will have fewer barriers to sharing information, best practices, and recommendations. People in different departments will more clearly see how their projects affect each other by working with people they affect (ibid, p. 316).

This process of people finding the right projects for themselves will help Don solve his problem with staff positions. He will find motivated people gravitating to their favorite areas. This will give him an indication of where to more effectively assign people in the future.

Analyzing Costs

As a leader operating under budget restraints, Don has a key role to play in allocating resources to his projects. To make his allocations effective, he needs a solid cost-benefit analysis (CBA) of his projects. Don will assign this analysis to his cross-functional project teams. Not only will they pick their projects, the team leaders or a representative will submit a project CBA to him for review. This way, he can get a high-level view of the budget without immersing himself in the details of every single project. If his path remains unclear after reviewing the budgets, he should meet with all the team leaders to clarify and make important choices.

Don will communicate his expectations to his teams about these analyses. Teams will need to measure coasts and benefits in both direct and indirect terms. These might include both tangible and intangible benefits. They should identify the distributional impacts of programs, identifying both who really pays for the program, and who really benefits (ibid, pp. 260-4).

Conclusion

Cross-functional teams like the ones Don must build underscore the importance of organizational structure in public agencies. His current structure is working against his strategic goals, but he can change that structure as manager. His teams’ cost benefit analyses will help him make decisions. He will need to choose between mutually exclusive projects, operate under budget constraints, and consider the real costs and benefits of the many programs screaming for attention. Don must marshal his teams to gather around projects where they can make real contributions. In this process they will understand the affects and relationships of those projects, justify their existence and purpose, and form teams to enact real solutions.

References

Balanoff, H., and Pinto, C. (September, 1999). What do you do when you city is looking at a million-dollar deficit in the current fiscal year? In Public Productivity & Management Review, 23:1, pp. 83-88.

Lynn, Jr., L., (1999). Policy analysis. In Lane, F., Ed., Current Issues in Public Administration, pp. 272-80. New York, NY: St. Martin’s Press.

Starling, G. (2011). Managing the public sector. Boston, MA: Wadsworth, Cengage Learning.