Formation Phase

The Formation Phase represents the critical transition from open exploration to structured commitment within decentralized networks. Following the ideation and relationship-building of the Conversation Phase, groups in Formation begin establishing clear boundaries, formalizing agreements, and designing the structure needed for coordinated action. This phase transforms emerging potential into concrete design, creating the foundation for functional structure to be implemented.

The formation phase usually culminates in a proposal or some other ask from the community or governance structure that the group is forming within. This is in order to gain funding/resources, partnerships, legitimacy, etc. to allow for the formal implementation of the group’s structure in the Organization phase.

When the formation phase is complete, a group is ready to move on to the organization phase.

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Key Characteristics

• Purpose Definition: The group works from the clear, specific purpose statement that emerged in the conversation-phase phase. This defines its reason for existence and intended contribution to the broader network.
• Structured Decision-Making: Simple but formal decision processes begin to replace purely informal consensus, enabling clearer accountability and execution.
• Initial Agreements: Members make explicit commitments about participation, contributions, and shared expectations, establishing the basis for mutual accountability.
• Lightweight Documentation: The group develops basic documentation of its purpose, practices, and progress through an initial cell state or nucleus document.
• Resource Planning: Initial budgets, timelines, and resource needs are identified and documented to support formal proposals for funding or support.
• Minimal Role Definition: Core roles and responsibilities emerge and are assigned, though these remain somewhat fluid and may evolve substantially.
• Team Formation: The self-selected group solidifies into an identifiable team with shared commitments, moving beyond loose association.

Functional Elements

Activities

• Early Execution: Beginning execution towards the goals of the group. Important to be able to experiment and learn to inform the design of the group’s structure.
• Commitment Establishment: Members explicitly commit to specific future contributions, roles, or responsibilities.
• Resource Mapping: Identifying needed skills, knowledge, and resources for successful execution.
• Boundary Definition: Clarifying what is and isn’t within the group’s scope and authority.
• Integration Planning: Establishing how the group will connect and coordinate with the broader network or community.
• Governance & Operational Design: Designing the governance and operational structure that will be implemented in the organization-phase phase.
• Proposal Development: Creating formal proposals to seek community endorsement, funding, or permission when needed to formally instantiate the group.
• Initial State Documentation: Documenting the group’s proposed purpose, practices, and plans in a group-state document. This outlines vision and practical implementation of the group.

Challenges

• Achieving Specificity: Moving from broad aspirations to precise, actionable objectives without losing alignment with deeper purpose.
• Balancing Structure and Emergence: Creating enough structure to enable effective action without prematurely constraining evolution and adaptation.
• Maintaining Momentum: Keeping energy and engagement high while shifting from open exploration to more structured commitment.
• Formalizing Without Bureaucratizing: Designing useful structures without creating unnecessary processes that hinder action.
• Establishing Credibility: Demonstrating sufficient capability and seriousness to earn support from the broader community.

Signs of Readiness for Evolution

A formation phase group may be ready to evolve to a more structured organization phase when:

• A clear governance and operational structure has been defined and is ready to be implemented.
• Key roles have been established and filled with committed individuals.
• Basic decision-making processes are being consistently followed.
• The group has begun execution of initial activities and can demonstrate progress.
• There is a need for more sophisticated coordination mechanisms to manage increasing complexity.
• Initial community support and resources have been secured via a proposal or similar.
• The group’s group state document is sufficiently developed to outline the structure to be implemented in the organization phase.

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Tools and Practices

State Documentation

Creating a lightweight but clear group state document is a critical practice during the Formation Phase.

The development of the group state document helps the group to get clear and precise about the group’s goals and how it is planning to achieve them. It also communicates this to others in the community or operational network, forming the basis for a proposal or other mechanism for community or operational endorsement, funding, partnership, etc.

Essential Components for Formation Phase State Documents:

Purpose Elements:

• Clear purpose statement connecting to broad community goals
• Specific problem or opportunity being addressed
• Initial goals and success criteria

Practice Elements:

• Key team members and their roles
• Basic decision-making protocols
• Simple meeting structures and communication channels
• Initial resource needs and treasury management approach

Progress Elements:

• Initial roadmap or timeline
• First planned deliverables
• Basic tracking mechanisms for activities

Proposal Development

Formation often requires creating one or more proposals to secure support, resources, or formal recognition from the broader community or governance system. Effective proposals typically include:

Proposal development can center around the group state document outlined above, combined with whatever specific asks that the group may have of the community or governance system. For example:

• Establishment funding
• Ongoing funding
• Access to community assets
• Formal recognition within the governance structure
• Mandate to act on the community’s behalf

Support Resources

• Governance Design Support: Accessing specific guidance and resources for governance design can save a lot of time and result in better overall governance design. This knowledge garden has a wealth of resources to support this work including governance patterns, frameworks, guides, and case studies.
• Group Facilitation: Accessing governance facilitation support can assist with helping the group to get to agreement on exactly how they want to define the group’s group state and which governance primitives and practices the group wants to adopt.
• Technical Support: Once the fundamentals of the group’s governance design are established, sourcing specific support to select the right technical tools to implement it is hugely beneficial.

Success Indicators

A formation phase has been successful when:

• Shared Commitments: Team members have made explicit commitments to specific contributions.
• Operational Structure: Basic operational structures and processes have been outlined ready for implementation.
• Resource Access: Initial resources needed for execution have been secured or identified.
• External Recognition: The group has been acknowledged and endorsed by relevant stakeholders.
• Execution Progress: The group has begun making progress towards its goals.
• Community Proposal: A clear, compelling proposal to the community or existing governance structure has been created and is ready to present.
• Completed State Documentation: An implementable governance and operational model has been designed and is outlined in the group’s state documentation.

The formation phase establishes the foundation for effective collective action by translating inspiration into structured commitment. It bridges the gap between exploration and execution, creating the conditions for a group to be formally established in the community or network that it is participating in.