# The Edge
## Foundational Organizing Structures

When we think about organizing around purpose it is helpful to use a very different mental model. Instead of thinking about *layers of control and authority*, we think of defining our structure in terms of the *markets we serve and the outcomes we want to achieve*. Instead of using the hierarchical pyramid model of control, we will think of our organization as a set of concentric circles connected by *markets*.

Borrowed from Neils' book *Organizing for Complexity* we can represent an organization as people in outer layers that create demand that people in inner layers of the organization consume, creating a market oriented value network.


In this model people who are part of an outer zone which in turn are serviced by people that are part of inner zones. In effect each outer zone acts as a market to one or more inner zones. When using this new mental model it is useful to think in terms of the following organizational constructs.

**The Teams** everyone is in a team, each team may or may not look like a classically defined agile team; but the need for everyone to feel like they share an outcome with a smaller group of peers is paramount.

**The Market** are all the groups that exerts external pressure on your organization.

**The Identity** establishes a common identity that directs self-organization towards value creation.

**The Edge** is made up of every team connected to the market and contains all roles that make decisions based on market interactions.

**The Core** is made up of teams that are intentionally deprived of market contact. These teams serve the Edge, providing services that the Edges chooses to use.

**Context Boundaries:** allow us to group teams in larger organizations based on a common context.

In larger organizations that number in the 1000s of employees, you may find it necessary to model a number of **Inner and Outer Cores**. An Inner Core serves the entire, or a larger portion of the enterprise. An Outer Core is closer the Edge, and directly serves a smaller number of associated Edge teams.

### What's in a name

In Neils' book Organizing for Complexity, these zone have different names. Some alternative terms for each of these zones that I have used with clients include:

**The Teams:** Pods, Squads, Labs, Bands,

**The Market:** External Context, Environment, Situation

**The Identity:** The Sphere, Organizational Boundary, The Enterprise

**The Edge:** Periphery, Market Facing Teams, Customer Teams, Value Centers, Feature Factory, Digital Factory,Garage

**The Core:** The Center, Support, Shared Services, The Glue, Infrastructure

**Context Boundaries:** Tribes, Guilds, Missions, Programs, Portfolios, Business Units, Subsidiaries, Divisions, Studios, Garages

Ok, lets go through each piece in a bit more details, and provide a few examples in an attempt to make it a little more real. Let's start from the outside and work are way inward.

## The Market

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The market are all the groups that exerts external pressure on your Organization. This list is not limited to customers and users, but **all stakeholders** that influence the way your organization provides services to the market. This list includes:

- **Users** of the products and services that you provide
- **Customers** who pay for those goods and services, either directly through some form of monetary compensation, or more indirectly by providing some other form of contribution such as their time, knowledge, or presence
- **Supporting Organizations** that help you engage with, or even better understand the Market you are in, such as Research Institutions, Educational Institutions, Industry Guilds, Technical Standards Committees, etc
- **Regulators** who place constraints and rules of conduct and validate compliance for organizations working in a specific market
- **Competitors** others outside the organization that serve the same or similar market

When starting to think about re-defining our organizational structure, it is very important that we start by identifying all of the players that our organization must interact with in order to deliver value to market. What roles do each of these market participants play? What is our primary means of engaging with them? there opportunities to exercise tighter feedback loops and better co-creation?

## The Identity

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The Identity establishes a common identity that directs self-organization towards value creation. **Unlike other "zones" in our org mental model, the Identity does not define where people are placed or who they engage with. In contrast, the Identity contains normative artifacts that describe who we are, and more importantly, *who we want to be,* as an organization.

I am not aware of any organization that has made a serious move to agility without paying attention to organizational identity.

Identity done poorly gives us propaganda. We get meaningless platitudes posted on walls, we get principles that leaders don't understand and don't follow. Identity done well give us some artifacts that inform the right culture. Artifacts that represent how leaders are behaving, or at least how they are striving to behave. There is a strong emphasis on articulating how the organization can foster a culture where people are empowered to make decisions for themselves. Good identity artifacts give us something to point to when we fall back onto familiar old ways of thinking and behaving.

There are some great examples of artifacts we can use to help establish our organizational identity, almost all of these artifacts are informal, and focused on telling a story, and not on creating a false prescription of artificial precision.

Good identifying element include:

- **Business Models** formed using the practice of [Business Model Generation](https://www.strategyzer.com/books/business-model-generation)
- Taking the time to establish a common set of **[Shared Values and Beliefs](https://www.notion.so/agilebydesign/Defining-Agile-through-Values-Beliefs-and-Behavior-26123c2f57fc47eba4940513baee00fe)**
- Full participation of **Common Rituals,** such as shared morning updates, standups, or periodic open spaces
- Publishing **A Letter To Ourselves,**
- Developing and sharing a **Culture Handbook**
- Developing and sharing an **Organizational Brand Proposal**
- A shared **Backlog of Customer Problems**

Poor Identifying elements include:

- Detailed Strategies / Blue prints or Road-maps
- Anything over a couple of pages
- Principles that are not immediately recognizable in the everyday actions of positional leaders
- Anything that cannot be challenged, updated for context, or revised based on learning

*Important: Identifying elements foster alignment and **inspire culture**, they don't lay out a recipe for people to follow.*

## The Edge

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The Edge is made up of every team connected to the market. The teams in the Edge possess the skills and have the authority to perform all of the roles required to make decisions based on market interactions. This means *every* market interaction! If a senior executive is responsible for maintaining a relationship with a strategic partner, he does no do so from the center. If necessary he facilitates allocating the ownership of that partnership to an edge team. He may also join that edge team in order to perform his responsibilities as part of that team, even if he only joining that team on a part time basis. This is important! If we want our new organizational model to thrive in the face of constant change, we must move all market oriented activity to the Edge!

It is important to note that each Market Participant should connect to at least one Edge team. Mapping edge teams to market participants is one of the first acts we should perform as part of organizational design.

There are many responsibilities that can be performed by Edge teams . Some of these include:

- Building new Product Features, deploying them to the market and validating them
- Customer On boarding, Maintenance and Support
- Research, Strategy, and Business Model Generation
- Marketing and Creative
- Vendor and Partner Management
- Engagement with Regulatory Bodies
- Participation in professional/standards/technical groups
- Organizational Investments
- Actuary / Credit / Other Financial Models that impact product and services
- Operational Activities that have a direct impact on market participants

This is a long list! It's important to think holistically about how we want to organize our people into teams within the Edge. It is extremely important to try to get this part of our organization right, and to continually refine how Edge teams are structured based on the latest feedback from the market.

We also want to design our organizationso that team own as much as they can. This includes delivering new features, operations of daily services, marketing, customer engagement and support. Acting like micro-organizations in their own right.

Some approaches to organizing Edge teams include organizing teams based on:

- Organizational Missions or **Outcomes**
- **User Life-cycle** (e.g.: User Awareness, User Activation and Revenue, Chargeable Activity, Billing and Receipt, Support and Customer Care, etc)
- Specific **Customer / User Segments**
- **Products** offered to customers
- Common **Platforms / Systems**

There are pros and cons to organizing your teams on any of these attributes. It's fair to state that I have ordered this list by an agility rank. in other words when you organize by outcome you will find it easier for people to collaborate, self organize, and get market feedback then if you organize by system or platform. But, again context matters. There are many short term, and even strategic reasons to organize by customer or product or even platform instead.

*TO DO: Impact with identity added, C1, GBP, Honda?*

## The Majority Works In The Edge

In general, as we move to a more agile way of working expect people working more people to be focused on market value. We want to transition from people working primarily in a functional department or team devoid of market contact. Inorganizations with healthy autonomy and decentralization the amount of centralized support required goes down, way down. The amount of teams that work with the market goes up. The end result is more market value gets created in your organization.

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So stated fully;

*Organizing Constraint 3: The majority of people in the organization are in edge teams working on achieving market outcomes*

## Sharpening the Edge

*TO DO: ATB Assessment*