What is a Team? 6 Different Types of Teams and Their Role in the Organization
Teaser: Each kind of team has its own pros and cons. Learn how to differentiate teams and identify the best model for your company’s structure.
A Standard study backs the saying that people in effective teams are more productive than individuals, especially when it comes to complex tasks and projects. Therefore, it should be no surprise that the majority of companies prefer to have people work in teams.
However, one needs to be mindful of today’s work culture before building teams. The current work landscape offers a never-experienced type of flexibility. One can opt to work remotely, in an office, or in a mix between the two. Today’s teams have to be structured to allow flexibility while adapting to the varying work styles.
Let’s look at different types of teams and understand when a particular team is better suited for a desired outcome over another.
Different types of teams
Each format of a team comes with its advantages and limitations. We take a closer look at the six most common types of teams.
Functional teams
The most common type of team is a functional team. What defines a functional team? Think of it this way: In a functional team, most of the members have the same skill set and are working towards the same objective or outcome. These teams are permanent in nature.
A quick example would be a customer service team. All the customer service representatives have the same profile, responsibilities, job descriptions, pay scale, and goals. All of them need to be able to resolve the customer’s issue as soon as possible, to the best of their abilities. In functional teams, the reporting hierarchy is pretty much the same for all.
The advantages of a functional team include the following:
- Easier to develop expertise: In a functional team, it’s easier to hone your skills and build expertise. If we go back to our customer service team, it’s highly possible for all the members to become highly skilled in their roles. This will increase the efficiency and innovation within the team.
- Easier to build processes: With a similar outcome, it’s easier for functional teams to develop standardized processes and procedures and maintain them. This also lends itself to more consistency and predictability in the work.
- Easier to allocate tasks and workload: Project managers find it easier to allocate tasks and workloads as everyone has the same work schedule, timing, capacity, and skill set.
- Easier to coordinate: In a functional team, it’s easier to coordinate schedules and projects because everyone pretty much works on the same schedule and often from the same location.
- Speedier problem-solving of specific problems: As everyone has a similar skill set in a functional team, resolving issues within that specific domain is easier and, more often, faster.
However, functional teams also have a few drawbacks:
- Difficult to adapt: Because the nature of a functional team is so specific, with certain processes, they can become repetitive and stuck in their ways. Functional teams can be inflexible, and sometimes, it can take more effort to cross-train them to work on new projects or processes.
- The team can become isolated: The narrow focus of functional teams can segregate them from the rest of the organization. It can take time to break into a functional team.
- Decision-making is slow and hierarchical: Sometimes, a functional team can result in slower decision-making because all the decision-making power lies with the team manager or the person on top.
Cross-functional teams
The opposite of functional teams is cross-functional teams. In this type of team, the members are all from different areas of expertise, and a leader or project manager will probably assign different tasks to each member based on their experience and skill set. However, they are all working towards the same goal, and the process adapted within a cross-functional team is also quite similar to that of a functional team.
An example of a cross-functional team would be a new product development team that includes engineers, designers, marketing, purchasing, and manufacturing.
The advantages of cross-functional teams are:
- Diverse opinions and perspectives: The diversity of expertise, experience, and skill set allows cross-functional teams to be innovative and develop unique solutions.
- Adaptable: Cross-functional teams, by nature, are more adaptable and can quickly respond to changes in the market or organizational priorities. This is because the team is able to rely on the skills and knowledge of team members from various functions. This varied experience allows these teams to pivot and adjust their approach as needed.
- More connected with the rest of the organization: Because these teams involve people from different departments of the company, they are less likely to operate in silos and are more connected with the rest of the organization.
The disadvantages of cross-functional teams are that:
- Complex management: Cross-functional teams, because of their members’ differing opinions and perspectives, can be more complex to manage. This can also make it difficult to assign tasks and workload because of everyone’s varying expertise.
- Increased administrative load: Cross-functional teams often require additional administrative support in the form of project management tools or communication platforms for effective communication and collaboration. This support can increase the overhead costs of running a cross-functional team.
- Potential for Role Ambiguity: Sometimes, in a cross-functional team, each member's roles and responsibilities need to be clearly defined. This can cause confusion, duplicated efforts, and reduced efficiency.
Virtual teams
Virtual teams are composed of members that aren’t geographically in one place. All members are remote and come together for a specific project or objective. In virtual or remote teams , there’s a huge dependence on project management and communication tools to complete tasks. Another distinction of virtual teams is that the members tend to be more task-oriented, and there is less social interaction between them.
An example of a virtual team could be a content production team where all the writers and editors are based in different locations. The manager assigns assignments and deadlines to each writer and editor.
The advantages of virtual teams are:
- Easy to assemble and scale: Virtual teams are quick to come together as one isn’t bound by geographic limitations. This setup also gives the organization access to a greater talent pool. This trait also makes virtual teams conducive to scaling as required. There are no “space” constraints.
- More cost savings: For virtual teams, organizations save on administrative overhead costs like rent and utility expenses. However, as they do require more technological support, the cost savings aren’t guaranteed.
- Greater flexibility: Virtual teams give employees more flexibility in terms of work hours and locations. This allows them to balance work and personal life more effectively, which results in greater job satisfaction and engagement.
On the flip side, the disadvantages are:
- Difficult to establish team culture: Culture is often established through social interactions and processes. Due to the limited interaction between members aside from task-related discussions, it can be difficult to build a culture in a virtual team. This, in return, can lead to feelings of isolation and disengagement between members.
- Vulnerable to cybersecurity threats: As virtual teams rely more on technology, they are automatically more exposed to cyber crimes like data breaches and hacking. The technology stack chosen to aid virtual teams has to be carefully vetted.
- Difficult to manage: Virtual teams take a lot more coordination and communication to be productive. Therefore, it needs a strong manager that understands this need and can fulfill it.
Problem-solving teams
Problem-solving teams are similar to cross-functional teams, where there are people from different backgrounds who come together. The main difference is that they are often temporary and brought together to solve a specific issue or challenge within the organization.
A real-life example would be that a team of an engineer, a quality personnel, a production manager, and a marketing agent is brought together to identify why there are several product returns because of defects.
The advantages of problem-solving teams are:
- Different perspectives: Like cross-functional teams, a problem-solving team consists of people from different backgrounds. Their varying expertise brings about more creative and innovative solutions to the issues.
- Quicker problem solving: By pooling their knowledge and skills, team members can identify and address complex issues more effectively and quickly.
- More accountability: The members are more likely to hold themselves accountable for the results of the team—they are driven by making a difference and resolving the issue on hand.
The disadvantages of problem-solving teams are:
- Potential for Conflict: It's natural for team members with different experiences to have conflicting opinions, personalities, and work styles. This can sometimes lead to unwanted conflicts and animosity that might slow down the results.
- Dominant Personalities: In any group, some people might feel more comfortable taking the lead in discussions, while others may be a bit shy about sharing their thoughts. This can create an imbalance in everyone’s contributions.
- Groupthink: While wanting to keep harmony is wonderful, it can also result in groupthink. This is when team members go with the flow and agree with the majority without really considering all perspectives.
Self-managed teams
Self-managed teams, or self-directed teams, are groups where the employees have the autonomy to manage their own work without direct supervision. These employees tackle tasks, set their processes, and make decisions without direct oversight or hand-holding. They also solve problems, drive improvements, and fully own their work.
The advantages of self-managed teams are:
- Increased employee engagement and morale: Employees who have complete autonomy and control over their work tend to be more engaged and motivated.
- Improved job satisfaction: Self-managed teams can lead to higher job satisfaction as employees feel valued and empowered. They can pick roles and projects that perfectly align with their skill set and career preferences. They also have the ability to maintain a better work-life balance, which also enhances job satisfaction.
- Better and more innovative problem-solving: As self-managed teams are empowered to make decisions and solve problems, they have a greater tendency to foster a culture of innovation.
The drawbacks of self-managed teams are:
- No set leadership: Autonomy—the very advantage of self-managed teams—can be complex to manage. This is because every member is also a leader with equal power.
- Greater potential for conflict: Without proper and agreed-upon communication channels, a self-managed team can lead to more conflict in the workspace.
- Risk of unequal work distribution: It can get tricky to assign, manage, and track workloads in a self-managed team because everyone selects their own responsibilities. This scenario can sometimes lead to burnout when someone takes on too much.
How to choose a team type for your organization
Use these guiding questions before picking a team for your company:
- Do you need the team to be permanent or temporary?
- What is the end goal of the team?
- How much supervision and handholding do the team members require?
- Do you have the technology to support the team?
- What is going to be the team size?
