Kings Food Markets' Local Fresh 24/7 program is proof of the power of teamwork.
The locally grown program, which brings fresh produce into the stores within 24 hours of harvest, is the result of a cross-functional team that met for about six months starting in the fall of 2011 and included representatives from Kings' marketing, operations and merchandising departments as well as representatives from Red Tomato, a nonprofit that coordinates produce delivery from local farms.
"We could not have achieved the success we have with Local Fresh 24/7 if we didn't have the cross-functional [team]," says Paul Kneeland, vice president of produce and floral.
Cross-functional teams help break down silos that exist at many retailers and food suppliers, allowing the companies to take advantage of skills found in various departments and resulting in better "buy in" for decisions, experts say. Sometimes teams are specifically designed with representatives from various functions; other times they evolve that way. Regardless of how they form, cross-functional teams generally focus on one task for a limited period of time. They're most often used in retail and food manufacturing settings when decisions need to be made that affect more than one department.
For example, Kings needed to establish wide acceptance of its Local Fresh program, and a team approach helped accomplish that. "It was imperative that everyone within the organization be on the same page for us to grow the program from a pilot in our Livingston store to a service all Kings' customers could experience in their neighborhood location," Kneeland says.
Allens Inc., a producer of canned and frozen vegetables based in Siloam Springs, Ark., recently formed a cross-functional team to develop a new line of flavored baked beans. "We have found that at Allens, we gain expertise and ownership from each department with cross-functional teams," says David Brown, vice president of sales. "In the food business and as a vegetable leader, it just makes sense."
The team included 10 people from Allens' quality control, product development, finance, sales and production departments as well as prospective customers for the new product line. "Each department signed off on the product and, as approval came, the project moved forward," Brown says.
Gaining acceptance from all affected areas will speed implementation, says Jessica Butler, founder of Attain Consulting Group in Ridgewood, N.J. The boss can dictate a solution, but when a team that includes all of the key departments comes up with a fix, it will have a greater chance of succeeding.
To make the process smooth, supervisors need to approve of team members' participation, says Mary Kay O'Connor, owner of StartingPoint LLC, a management consulting firm in Kansas City, Mo. The managers should be told why the team exists, how often it will meet and its expected duration.
Despite the value of cross-functional teams, retailers don't use them as often as they could, consultants say. "I don't think as a general rule they are used that often because they become a microcosm of the challenges a [company] is facing," O'Connor says. "Margins are low in retail environments, and often one department competes against another. So there's little incentive for them to cooperate with each other, especially at the store level."
A 2012 survey about deductions conducted by the Credit Research Foundation and Attain Consulting Group found that 41 percent of businesses in the food, beverage and grocery category use cross-functional teams to manage deductions, an area that seems ripe for collaboration.
"Deduction management is an area that crosses multiple departments," Butler says. "For food manufacturers, deductions are often first seen in the finance area as checks are received with short payments," she says. "Yet the causes of deductions originate from other departments, such as sales or distribution. Cross-functional teams can be of tremendous value to companies trying to reduce and control deductions, yet they are often difficult to successfully implement."
Cross-functional teams need the support of senior leadership to be successful. "My experience is that teams that are effective are hard-wired with senior leadership," O'Connor says. "And they can't just say, 'This problem is important.' Senior management has to say, 'We have to convene a special team of folks to tackle this.' They also have to say they will monitor the team, set milestones, expect reports and track metrics."
Cross-functional teams vary in composition with some including senior managers and others comprised only of staff. "It's very helpful to have representatives from all functional areas," says Jim Okamura, principal of Okamura Consulting in Chicago, which helps retailers plan strategy.
As the team's work progresses, the representatives can report back to their respective departments and get buy-in. "That way there are multiple, concurrent approvals along the way to smooth the final decisions," Okamura says.
Attain Consulting Group
Teams work best when the members are outgoing enough to voice their opinions. Team members should be cordial and respectful, but unafraid to disagree. "I would rather get energetic people together who have different perspectives and work toward coming up with a joint, collaborative solution than [have] a group who all think alike and do not want to challenge existing processes," Butler says.
O'Connor goes further, suggesting some debate should be expected as part of the process. "My opinion is that if you have a well-mannered team, you have a problem. You need people who are vocal, not afraid of conflict and know their business well."
Sometimes teams need outside help, Butler says. A consultant knowledgeable in cross-functional teams can facilitate the process for a few meetings, and then let the group complete its work. One of the first steps after a team is assembled is teaching team members how to work with one another.
When O'Connor facilitates a cross-functional team, she spends much of the first meeting working on listening and conflict-resolution skills. She breaks the group into pairs and then has one person interview the other about the problem at hand. The interviewer then reports back to the group about what her partner said. This exercise develops listening skills and helps team members see the problem from others' perspectives.
Establish goals early in the team's life. "The teams with a clearly defined objective have been the most successful," Brown says. "This is the key to the success of cross-functional teams. For us, clearly defining the goals for the group–as well as a realistic timeline associated with those goals to be reached–is a recipe for success."
Establish ground rules at the first meeting, Butler says. For example, encourage team members to start with a fresh outlook, unburdened by "baggage" from previous encounters with the problem or team members. Team members should limit their criticism and focus on the positive. Specifically, she suggests a rule stating, "You have to say two positive things before you can say a negative thing."
Another ground rule many cross-functional teams adopt is to allow everyone to share ideas, even those beyond a person's area of expertise. Lakeland, Fla.-based Publix Super Markets has used cross-functional teams when planning store renovations to ensure no detail is overlooked. After all, a store renovation affects every department at the store, as well as its regional management, designers, real estate personnel and facility services representatives, says Dwaine Stevens, Publix media and community relations manager.
So, Publix forms a broad-based team to consider every aspect of a renovation, including the competition, customer requests, equipment needs and the company's real estate strategy in the market. "There is lots of input, lots of decisions and lots of dollar implications" at the meetings, Stevens says. "Cross-functional teams are extremely value-added," he says, "since you create synergies with different disciplines working towards one goal or objective."
Once goals and ground rules are established, the team should dive into the problem. A cross-functional team's life should be divided in half with the first three months or so of its existence devoted to researching the problem and developing solutions, and the final three months spent implementing solutions, O'Connor says.
An essential part of that first half is gathering data to support or refute assumptions people bring to the group. O'Connor recalls a cross-functional team she facilitated at a coffee supplier that was having customer service problems. At the first meeting, the managers said they couldn't understand what the problem was because every customer issue was handled within 24 hours. Team members gathered data and learned that while responding within 24 hours was the goal, it was inconsistently met. A new call center was established, which, together with a few other improvements, cut response time by 40 percent.
Regardless of the team's goal, metrics are essential for assessing its progress, O'Connor says. "You need an inarguable standard; a measuring system that's transparent," she says.
All Ideas Welcome
The team also has to be willing to welcome all ideas, creating an environment where team members feel they can safely offer any suggestion without facing undue criticism or reprimand. This concept paid off for Pete & Gerry's Organics LLC when the firm formed a cross-functional team to plan the egg supplier's participation in a healthy foods festival in Brattleboro, Vt., this past spring. The team, which included the company chief executive, an outside consultant, the company's events planner and others with various areas of expertise, welcomed everyone's ideas, says marketing director Karl Johnson.
Pete & Gerry's Organics LLC
"At a team meeting to conceptualize the project, everyone contributed," recalls Johnson, whose Monroe, N.H.-based company provides organic eggs to grocers throughout the Northeast. He relates how various ideas unfolded: "Our events manager came up with the idea to photograph the side of a barn, put a weathered version of our company logo on it and print it on gauze to make sides for the tent," he says.
An educational consultant thought of handing out paper chicken hats at the event and creating a rotating egg display, while the marketing director came up with hanging egg-shaped display panels and preparing hardboiled eggs for kids to peel and eat, Johnson says.
By taking a team approach, the company arrived at more viable ideas than it would have with a few people working independently. Key to the team's success, Johnson says, was team members' mutual support. "We all felt safe offering ideas, whether or not it was our field of expertise."