
About a week has passed since our current Beta transformation client "went Live" with its decentralized Cell Structure Design at the dawn of the month of November. Today is 10 Nov 2024). In my last post about this particular transformation with the OpenSpace Beta approach I reported on what had happened after OpenSpace Meeting 1, and how preparations for the Go Live were advancing. Now it is time to talk about how the cell structure became real and what it took to get there.
The Cell Structure Design got finalized during the first week of October, or roughly four weeks after OpenSpace Meeting 1. This means everyone had been associated with a specific cell, and for good reason. Every periphery cell was staffed, in the design draft, in a way that it could function with reasonable autonomy. The design was so convincing that someone in the company said: "This enables us to work a thousand times better than in the previous structure - with small client portfolios for every business cell, and way more focus in their approach to work." Only 20% of the cells in the design were cells of the center – an excellent ratio, meaning that a very high level of decentralization and functional integration would be achieved.
If you are not that well-acquainted with the Cell Structure Design approach, here is a concept overview:

The first crucial insight into the decentralized design at the client was that while the company offers its own software product and platform, the largest share of its software development could still be decentralized to cells in the periphery. Only a third or so of the software development staff would still be part of the center after the Go Live - everybody else would be part of the periphery, thus directly facing clients and developing client features. This would make feature development much more adaptive and market-oriented. But it required a mental shift, too: As one software developer concluded: "When we started discussing the Cell Structure Design, ahead of OS1, I was convinced that only a select few of us had it in them to be full-stack developers. Now I am sure that most of us can become and should be full-stack developers. We had it all wrong how to structure software development, qualification and work organization. With dire consequences for our output."
Finalizing the Cell Structure Design meant solving the client allocation riddle
The last piece of the Cell Structure Design process was to allocate clients to periphery cells. As a B2B business, this software firm has just a few hundred corporate clients. There was no obvious reason to structure the business regionally, and no clients dominated the client portfolio. How to allocate the 400 or so clients to the periphery, so that each cell would get a fair share of the ongoing business? The solution was simple: Clients were allocated to cells first randomly, or by chance. Then all periphery cells would get the opportunity to "exchange" individual clients among them, if there were good reasons to do so, like ongoing strong client relationships with individual software consultants. A few iterations of "client exchange events" sufficed to get this sorted out.
Cell constitutions: Departing from a bias for talking to a bias for action
By mid-October, the Cell Constitutions got going. This means that all cell teams meet in person, for the first time, to talk about their businesses, and about how to work together in the new constellations. In some cases, team members would find themselves among people they would already know very well. But in most instances, teams would consist of constellations of team members that had never interacted much, in the departmental structure. "Constitutional tea sessions" do not happen in thin air or without boundaries: Cell teams are obliged to document their insights and the outcomes of their sessions on an A3 work sheet. Teams may require just one session to get their constitution, or they might need two or three work sessions to get the task done. All teams had do do this around the same time, or within the same 10 days or so.
The Cell Expo puts the new structure within reach
My client's Cell Expo happened on a Friday, on Day 43 of the 90 days of Practicing-Flipping-Learning in the OpenSpace Beta chapter (for detail: openspacebeta.com). I can tell you that it was quite a success! 20 people participated, including representatives of all cells and the Cell Structure Design stream working group. Spirits were high during the 3,5-hour session, and the increase in awareness of contexts, relationships and business needs within the cells was noticeable. There was some nervousness ahead of the Cell Expo: What if others think we did a bad job? What if we missed something? How will other teams respond to our documentation?
What is a Cell Expo, in OpenSpace Beta?
A Cell Expo is part rite of passage, part work session. Part peer review, part celebration of the new structure that's about to become real. I hope the header photo gives you at least a hunch of what the session felt like. As for the Cell Expo's contents: Before that session,
All cells pick team a name for themselves,
All cell teams work out detailed documentations about their individual cell's businesses and scopes (like the one on the wall in the header image),
All teams think through their cell's economic foundations, their learning and support needs, as well as principles of collaboration.
The cells' documentations are shared just ahead of the expo and the first part of the expo session gives everybody present the opportunity to review all cell documentations. But the Cell Expo serves not just to share every team's detailed findings, but also some "high-level insights" around the cell constitution process.
Usually, the cell structure goes live just a few days after the Cell Expo. In this case, the event was set for around one week ahead of the Go Live which was to happen, at the start of November. The Go LIVE occurred around Day 50 of the 90 days, which will give the company about 40 days to practice the new, decentralized structure, before OpenSpace Meeting 2, which is set for mid-December.
Getting the new structure to work
With small, highly autonomous business teams of just 5, 6 or 7 people, the new, decentralized structure requires a radically different approach to how the work is being approached. The organization previously had a "sales department", a "consulting department", a rather massive "software development area", an "office management area" and other departments. Now all periphery cells will run their individual businesses very independently, integrating the previously separating functions. As mentioned, this includes large parts of the software development function - now allocated to the periphery.
While company's sales department previously dealt with the 400 or so corporate clients in an infrequent and anonymous fashion, now every cell just has 30 to 50 clients which it can treat very intimately. "Teams can in principle get in touch with each of theirs every month if they want to," the company owner and Sponsor of the OpenSpace Beta process concluded at some point. Teams are currently figuring out how to acquire new clients. How to get new products adopted by their existing clients. How to serve consult to their clients and get services delivered. How to charge them and invoice (which was previously done by administrative staff).
A new kind of reporting will support the cell network's need for information and oversight
Getting to a kind of performance reporting that's fast, transparent and relevant to everyone and that shows the right numbers in a reasonable way has been a parallel effort at this transformation client. A Fast Close needed to be adopted. For the September closing (at the beginning of October), this still did not yet work well, but it got a lot better for the October closing. Accounting was in-sourced. New, more focused categories for sales and costs were adopted, financial reports re-designed from scratch, showing 36-month trends on all P&L numbers, and a few key indicators that are also shown in a cumulative fashion for the current year. Now the numbers are delivered to all on the 2nd day of each new month, in a way that's reliable, relevant and well-visualized.
Internal pricing between center cells and periphery cells ("Value Creation Accounting", see relativetargets.com) started at the beginning of November. Detailed figures for the individual cells and the cell network will be released with the November closing for the first time, at the start of December. With that monthly closing a "league table" comparing the periphery cells in a profit/loss indicator will also become available. This way, the fundamentals of a move to a Relative Targets approach to performance systems will be complete, too.
What's next in the client's transformation story?
As cell teams are sorting out their ways of operating, all kinds of learning accelerators (see OpenSpace Beta concept overview) are being used: "Tandem session" continue, short internal qualification sessions ("Takeaways") are run, and qomenius Nano by qomenius | freedom & learning will be deployed to all teams for the purpose of self-organized team development. Myself at Work has already been introduced for self-effectuation and collaboration improvement, and further use of this potent new psychometric diagnostic is prepared before OpenSpace Meeting 2, which will close the 90 days of Practicing-Flipping-Learning.
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Rijon Erickson and I just recorded an episode of "BetaCodex LIVE" about Beta transformation in software companies and IT service firms. In this episode, I also talked about the case discussed in this article. youtube.com/watch?v=yMXmgxJNugE

Fore more about the BetaCodex, visit betacodex.org. For more about the Red42 consulting practice, visit: redforty2.com
For more on the OpenSpace Beta approach: openspacebeta.com For more on Cell Structure Design: cellstructuredesign.com
A recommended book: Essays on Beta, Vol. 1 - with 200 essays on organizational development "Beta-style" that are both insightful and fun: redforty2.com/product-page/essays-on-beta-vol-1. The E-book: redforty2.com/product-page/essays-on-beta-vol-1-ebook

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