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Every week seems to bring bad news about the state of the global economy and its impact on the tech sector. We appear well on our way to a downturn. Every startup will experience this recession differently. Some, particularly those in spaces such as SaaS, may get through it relatively unscathed. Others, like certain ecommerce and speedy delivery sectors, look set to have a tougher time. What every prudent founder will be looking at is how their startup can best weather the storm and set itself up for success when things inevitably get better.
The most obvious approach is to cut costs and increase efficiency. A no-brainer — but something that’s a lot easier to talk about than to effectively put into practice. Inevitably, many startups first look at cutting headcount to meet this goal. However, more often than not this does a lot more damage than good. Vital skills and knowledge are lost, morale is hit and customer service suffers.
Instead, the answer could be found in a change of team structures, processes and approaches. A change that maximizes efficiency and resilience and promotes innovation. I am talking about the magic of cross-functional, multidisciplinary teams.
This is probably a record-scratch moment where you look confused and wonder why I’ve started writing like a management consultant. Hear me out. Although this may sound like a load of random jargon it actually describes one of the best future business structures.
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Multidisciplinary teams: Taking down the silos
Generally speaking, businesses are divided up into departments. Marketers sit with marketers, and developers huddle with other developers. Marketing is in charge of marketing, the development team is in charge of, well, development. It’s nice and simple and has a lot of obvious advantages. Unfortunately, it also has some glaring problems that are becoming more and more apparent as technology, changing working practices and rising customer expectations increase the complexity of what many businesses do. I’ll give a few examples below, but they can be summarized as the siloing of knowledge — usually around data, and causing bottlenecks, single points of failure and reduced innovation.
Multidisciplinary teams are, as the name suggests, departments made up of people with a wide variety of skills. Cross-functional means that responsibilities, knowledge and aims go right across the business.
Let’s focus on marketing. The way businesses communicate has become incredibly complex — more channels, more tools, digital transformation, an unprecedented amount of data and higher expectations. Websites are expected to provide a host of personalized experiences. All of this requires a huge number of skills working in tandem: data science, security, IT, digital marketing, copywriting, customer service, development and much more.
Collaboration, not conflict
Juggling all of these different skills found in different departments with different goals leads to a lot of headaches and, in some cases, conflicts. Marketers make requests of developers to complete an action immediately but it falls to the back of the queue because the developers have their own priorities. Data scientists provide inputs that don’t include the commercial insights that marketers need for strategies. Everyone forgets to inform customer service about the new marketing campaign copy. And so on.
It’s inefficient, error-prone and an ultimately unsustainable way for many startups to operate. You can see these problems every time you experience a slow-running, poorly functioning or outdated company website. It was also readily apparent at the start of the pandemic as many companies struggled to switch their offerings online. A number of them — even some global companies — found they relied on one or two individuals (who were now absent with COVID-19) to manage website updates. They couldn’t put critical customer information online or even begin to create a new online channel for sales.
Marketing is just the most obvious example; siloed teams impact everything from critical business decision-making — that is, the best infrastructure and tools to adopt — to sales, product development and commercial strategy.
A multidisciplinary, cross-functional team
A truly multidisciplinary, cross-functional marketing team includes all the skills you need to execute any project. This doesn’t mean splitting up the whole department into fixed smaller teams; it means allowing them to work cross-functionally on one project. Everyone works together and shares the same goals. Skills run in a continuum — data scientists know a bit about marketing, marketers know a bit about development. Information, insights and knowledge generated in the marketing team flow out to every other multidisciplinary department and vice versa.
But wait a minute — weren’t we talking about surviving and thriving in a recession? This sounds expensive and disruptive, right? Well, no, not really. Certainly, if you intended to upend your entire business tomorrow and reorganize everything and everyone into a big multidisciplinary melting pot you would probably do more harm than good. I’m not advocating that. What I believe will work for a lot of startups is an incremental approach that focuses as much on the philosophy as it does on the practicalities. After all, building multidisciplinary teams involves a lot of best-practice measures that have their own wider benefits.
How you can get started
Every startup will be different, but there are some broad rules of thumb to follow to get started:
- Get your data flowing: Many startups big and small have information held in silos. Auditing your data — where it is held, who has responsibility for collecting, managing and analyzing it, where it is shared and how it is used — is the first step. Ensuring you have the tech and procedures to make it accessible across the business comes next. Building up the skills across your whole team to generate insights is the cherry on top.
- Break down those walls: Even the smallest startups can suffer with different teams operating in a quasi-rivalry with one another. More often than not it’s a structural issue. Priorities and goals across departments are not shared — except maybe a brief mention at an all-hands meeting. Actively encouraging and creating forums where different departments consistently meet to collaborate on and share problems and successes can be the easiest way to get started on closer integration and cooperation.
- Education, education, education: Teaching your team new skills can be the single most powerful initiative. It increases productivity, builds resilience and can really help speed up the integration process. But it doesn’t just happen naturally. You need to proactively upskill your team in a structured and targeted way. Identifying the key skills needed, who is best equipped to acquire them and, crucially, creating an environment where they can be applied immediately means developing a comprehensive training program.
- Make technology an enabler: It’s crazy how many companies have a tech stack that’s largely inaccessible or inappropriate outside the department it was originally commissioned for. Worse is when IT, for example, makes all procurement decisions and imposes them. Your tech stack can and should underpin cross-functional collaboration. It is the key to free data and information flow. Surveying you team’s sentiment to identify problems and opportunities will inform you how you can make quick improvements. Ultimately, you want to get to a point where you don’t need power users to get the most out of your stack.
- Talk the talk and walk the walk: Your team will take a cue from you and your leadership team. If you want to get buy-in for this approach you all need to get stuck in. This means being more transparent with management decisions and getting more involved and knowledgeable about how departments work in practice. This is much more than receiving activity updates. It means really understanding what everyone does on a day-to-day basis. If your CFO can tell you what Dave in development is working on — you know you’ve made it.
- Start small but think big: Any one of the above actions would see a big ROI for your startup. The key is to remember that at some point you will need to build fully multidisciplinary teams. Piloting one department, continually monitoring results and learning from mistakes will help you to eventually roll it out across your business. Don’t rush — costs will take care of themselves and risk will be mitigated by moving in a thoughtful and strategic manner. Remember, you need your team to be sold on the idea, or it will struggle to work.
There’s no escaping the fact that change can be hard. I imagine many people reading this will shrug their shoulders and think they already do this. However, there’s a big difference between having the veneer of a collaborative startup and having the procedures, skills, mentality and infrastructure that make it a reality. The virtue of starting this journey now is that not only will it help you ride out the present recession, it will also future-proof your business for the technological, economic and customer challenges the next few years will bring.
Dominik Angerer is CEO and cofounder of enterprise CMS Storyblok.