By Noel Sobelman

The benefits of organizing project work using a small, cross-functional core team structure have been around since the early 1990s, when Wheelright & Clark published their seminal research in “Revolutionizing Product Development.” My colleagues and I used to joke that a project’s entire core team should be able to fit inside a minivan.

Today, the principle is being popularized by companies like Amazon using the two-pizza rule. Teams shouldn’t be larger than what two pizzas can feed. Whether pizzas or minivans, whether you apply it to core new product development teams or new growth source innovation teams, the benefits of this project team structure haven’t changed.

Here are some practical tips for how your company can apply this model.

The Core Team Defined

Core teams are small, cross-functional teams with responsibility and authority for the delivery of new solutions. The core team approach goes well beyond a gathering of functional liaisons. Core team members fully represent all areas of the organization that contribute to the innovation process and are jointly accountable for success in market.

Joint accountability is where the model starts to differ from the pre-90’s siloed, “over the wall,” or serial approaches, when individual team members were held accountable to their vertical functions and measured primarily on the achievement of functional objectives.

Core teams are an effective way to break down functional silos by moving decision-making and accountability toward a project-centric model where development happens concurrently across functions. Success in market is the primary measurement of project team member success.

Think of it as a rugby team, moving down the field in a “scrum” formation versus a relay race where the baton is passed from one person to the next.

Core teams consist of up to 8 team members with a diverse set of skills and a core team leader. The core team leader in this model is more of a mini general manager than an expert project manager or senior developer. The emphasis is on cross-functional team leadership and, ideally, this person approaches innovation with a business mindset.

There is no-one-size-fits-all model for core team membership. Staffing is customized to the needs of specific projects. That said, it is helpful to establish a starting point or base structure for a typical project.

The “core team wheel” graphic below shows two sample core teams—one for a typical existing business project team and the other for a new growth innovation project team. The wheel is meant to reinforce the move away from a vertical hierarchy with rigid functional siloes to a structure where all team members are equals with a common objective: customer impact. A wheel is true and spins with less friction when all the spokes are tightened to the same strength.

The core team maps to a network of individual project contributors. This outer wheel is referred to as the extended team. Extended team members are individual contributors who play a key role in supporting the core team. They join a project as their skills are needed.

Core Team Characteristics

Joint Accountability

Core team members hold each other accountable and have a shared sense of responsibility for the market success of their projects. This shift in responsibility away from functional objectives to team-based success is one of the more difficult transitions for large companies.

Functional managers who are used to having the ultimate say in resolving project issues feel like they are giving up decision-making authority and control. However, properly applied, the core team approach frees functional managers up to focus on building departmental excellence—people development, tool development, functional process development, and functional strategies.

The functional manager’s role shifts from project-level decision-maker to project supporter while pushing project-level decision making to the ones closest to project issues. Leading companies understand this concept and have modified their incentive and reward systems to promote team-based behaviors over management by functional objectives or MBOs. For example, at least 50 percent of a team member’s performance evaluation comes from peer project team members using team-based performance measures.

Communication

In large organizations, effective communication needs to take place across functional boundaries and up and down the corporate hierarchy. The more functionally siloed an organization is, the more tangled inter-functional communication becomes, as information has to move horizontally across multiple functions and vertically up and down organization levels. The small, cross-functional core team structure short-circuits this approach and is designed to replicate the communication efficiencies of a small startup within a large organization.

Decision-Making

Innovation and new product development requires project teams to make hundreds of decisions each week. Timely decision-making is critical. Nothing slows a project team down more than the team member who feels the need to go up the chain of command to get permission to make a decision.

Using the core team approach, teams are staffed with empowered decision-makers who are trusted to fully represent their function. The role is much more than that of a functional liaison or Project Coordinator. Core team members have knowledge of functional strategies and know how best to apply them to project-level decisions in the context of a cross-functional, jointly accountable team.

For new growth innovation projects, team members work together to prioritize and test “leap of faith” assumptions, experiment to surface customer insights, and progress toward a scalable solution with each team member contributing a perspective from his or her area of expertise.

Core Team Roles and Responsibilities

Core Team Leader Responsibilities

The core team leader functions as the “general manager” for the project and is accountable for both team and project success. This person has organizational clout, effectively removes barriers to team success, and is the first person the CEO calls if he or she wants an update on the project.

Specific core team leader responsibilities include the following:

1. Maintain responsibility and accountability for achieving business impact
2. Drive team activity from problem validation through successful commercialization and scale-up
3. Reinforce project objectives, guide critical tradeoff decisions, keep the team moving at start-up speed
4. Maintain accountability to the governance team or new venture funding board
5. Evaluate performance of core team members

Core Team Member Responsibilities

Core team members are accountable for ensuring successful contribution for their defined area of responsibility over the course of the project. In addition, they have shared responsibility in working with the core team leader toward the overall success of the project. Core team members fully represent their functional area for project activities and are the functional representative responsible for project decisions. Team membership is designed to ensure cross-functional representation and collaborative project execution.

Specific core team member responsibilities include the following:

6. Make project-level decisions on behalf of their function or area of expertise
7. Enlist the support of other resources and from extended teams
8. Negotiate functional resource needs and assignments
9. Provide leadership and direction to extended team members
10. Maintain overall responsibility for functional area’s performance and budget
11. Evaluate performance of extended team members and the Core Team Leader

The Extended Team

Extended team members support the core team. They are identified jointly by the core team members responsible for the relevant activities and the functional managers who manage their allocation across the innovation and new product development project portfolio. They are allocated to projects upon phase gate approval or as an outcome of a new venture board funding meeting. Extended team members join a project as their skills are needed, stay only as long as necessary, and can often support multiple projects.

Specific responsibilities include the following:

12. Provide functional and subject matter expertise to the project
13. Execute project tasks in accordance with the project plan
14. Render a professional opinion on matters outside the core competencies of the core team
15. Work closely with core team members to ensure alignment between their work and project goals

Building a team with diverse skills is a foundational component of any project team. This is especially important when dealing with new growth source innovation where the team is dealing with conditions of high uncertainty. You want entrepreneurial-minded people who can manage chaos and wear multiple hats. Look for a balance of the following skills:

Solution Designer: Creatively applies technical and customer experience design skills to build the MVP, prototypes, and design experiments for rapid, low-cost learning. This person has expertise in the science or specific technology you are using.

Customer Zealot: Emphatic about the customer and customer job to be done; empathetic; personable. This is the person who leads the way with “outside-the-building” validated learning activities, including deep problem understanding.

Connector: Understands the inner workings of the organization and partner ecosystem. Mines a network of partners and co-creators, removing internal and external barriers to get things done.

Visionary Core Team Leader: Leads the charge, rallies the troops, keeps the team inspired, has a business mindset; tenacious; persuasive; resolves conflicts.

Serial vs. Parallel Development

Serial development is the practice of one function waiting until full completion of an upstream deliverable before handing it off to a downstream function. It slows knowledge transfer, is subject to interpretation, and leads to fingerpointing when something goes wrong.

Parallel development, the practice of conducting interdependent tasks at the same time, is ideal for the type of integrated problem solving enabled by the core team structure. Core teams reinforce the rich, face-to-face, two-way communication and timely interaction needed to anticipate issues and avoid downstream surprises.

In the following graphic (adapted from Revolutionizing Product Development by Wheelwright and Clark), arrows depict communication across functions, and darkened task bars represent knowledge transfer. Note how overall cycle time is shortened with parallel versus serial development.

Core Team Formation and Project Duration

With execution-oriented new product development, the core team is identified and staffed upon confirmation that the project idea fits company strategy and is worth an investment to fully define the solution, validate major assumptions, and plan the project.

Most companies with a phase or stage gate process call this milestone “Concept Phase” approval. Extended team members are involved as needed for planning and new product definition activity as trade-offs between product requirements, design approach, schedule, budget, and resourcing considerations are made. Extended team members typically rotate on and off depending on where the project is in planning, design, test, and launch phases.

For new growth source innovation, it is best to keep the extended team as small as possible, pulling in support resources from the base business as needed and on a limited basis while major solution assumptions are tested. The ideal team size is two or three people during the early stages of validating the customer problem and riskiest business model assumptions.

Project support resources and overall project spending will gradually increase as major unknowns are de-risked and the project progresses toward product/market fit, eventually being ready to scale. Along the way, the core team will need to tap into support functions such as Legal & Compliance, HR, Finance, Sales, and Marketing for guidance to protect core business assets as the core innovation team experiments with customers.

Corporate Leadership’s Role

Instead of tinkering with project-level details or getting pulled into functional disputes, the core-team approach frees senior leadership up to focus on new growth strategy, portfolio management, development pipeline governance, functional skill development, and ongoing operations.

For base business new product development, leadership governs the pipeline, making go/no-go business decisions at key project milestones. These milestones, or phase gates, are windows into the project. As long as the team is on track, core teams are empowered and funded to execute projects between the gates. For new growth innovation, the governance team (shown below as the Venture Funding Board) establishes areas of focus, sets opportunity size guidelines, sets customer development guard rails to protect core assets, and provides a “safe space” for innovation teams to operate.

The following graphic summarizes the organizational model with accountability to leadership for both the base business and for new growth innovation core teams.

Conclusion

Most companies today have some form of a cross-functional project team structure. That practice has been around for over 30 years. However, it is not enough to put people from different functions on a team.

At your next core team meeting, look around the room. Could you feed everyone in attendance with two pizzas? Could you fit everyone comfortably inside a minivan? If not, try restructuring your project team with a small, empowered set of individuals at its core, clear roles and responsibilities, decision-making authority, extended team support, effective core team leadership, and joint accountability for solution success.

About the Author

Noel Sobelman is a researcher, writer, and corporate advisor on innovation effectiveness. His experience includes senior-level corporate roles, new venture creation, and executive advisory. He is widely recognized for bringing a practical and applicable approach to companies looking to accelerate growth from innovation.