Understanding and Evaluating Cross-Functional Sourcing Team Leadership

INTRODUCTION There is little question that firms worldwide are experiencing relentless pressure to innovate and improve. Many are responding to this pressure by creating organizational structures designed to promote cross-functional and cross-company communication, coordination, and collaboration. To support this effort, cross-functional sourcing teams have become increasingly important, particularly as firms attempt to develop leading-edge sourcing strategies and practices.[1] While 80 percent of the major U.S. firms surveyed plan to emphasize the use of sourcing teams through the remainder of the 1990s, the success of this approach will vary widely from company to company and team to team, even across teams within the same business.[2] When executed properly, the cross-functional team approach can bring together the knowledge and resources required for responding to new sourcing demands, something traditional functional structures are often incapable of doing. However, in a classic work 35 years ago, Likert noted that groups and teams can accomplish much that is good, or they can do great harm. There is nothing implicitly good or bad, weak or strong, about teams, regardless of where an organization uses them.[3] Because most firms expect to use teams to support procurement and sourcing decision making, it is important to understand how to effectively manage the cross-functional sourcing team process. Unfortunately, researchers who study teams rarely reach the same conclusions about the key factors affecting team success. The study of teams is complex because no two teams or organizations are the same. A factor affecting one team may have little impact on another. Each team is a unique entity displaying its own behavior and nuances. There is one variable, however, that exerts an unusually strong and consistent impact on team success - the effectiveness of the formal team leader. The purpose of this article is to examine the critical role that team leaders play and the challenges they face in a cross-functional sourcing team environment.[4] First, the article outlines the important relationship between leadership and other variables critical to the sourcing team process. Second, the specific responsibilities and requirements that sourcing team leaders must satisfy to be effective are discussed. The final section details three assessment scales used to help identify a sourcing team leader's behavioral style and ability to satisfy critical leadership requirements. The use of these scales highlights opportunities for development and growth at the team leader level. LINKAGE BETWEEN SOURCING TEAM LEADERSHIP AND TEAM SUCCESS Why should organizations concern themselves with team leadership? Does it really make that much difference? While many variables potentially affect cross-functional team success, the influence of the team leader is particularly important.[5] The team leader can affect a team's effort, cohesion, goal selection, and goal attainment. Further, only a formal team leader can perform many of the responsibilities associated with team leadership.[6] For example, the formal team leader almost always serves as the primary link between the team and the rest of the organization. Previous research relating leadership to team performance points out the absolute need for carefully selecting individuals who have the ability to satisfy the requirements and responsibilities of formal sourcing team leadership. Of all the variables potentially affecting a team, few exert as strong an influence on team performance as team leadership. This is true in part because the team leader is in a position to influence so many other variables that affect performance. An earlier study of sourcing teams identified a direct link between sourcing team leadership and other variables critical to team interaction and performance.[7] Overall, effective leadership demonstrates a strong and positive relationship to team performance. …