The New Skill in AI and Teams: Context Engineering


Hi Reader

For the last couple of years, everyone has been obsessed with prompt engineering. How to write the perfect prompt. How to get better answers from AI. It kind of felt like a cheat code.

But now the game is shifting from prompt engineering to something much bigger: context engineering

It’s not just about the prompt anymore. It’s about what surrounds it — the background, the tools, the setup.

And it matters way beyond AI. It might just be the missing piece for building better teams, too.

Here’s what I mean:

The AI Lesson We Should All Steal

Recently I read an article by Philipp Schmid that made something click for me. He argues that the secret to powerful AI agents isn’t better prompts or smarter code. It’s the context you give the model.

Context, in this case, means everything the AI sees before it does the task: instructions, past conversations, relevant documents, even the tools it can use. The better the context, the better the outcome.

You don’t need a smarter model. You need a smarter setup.

And I’ll tell you — the same principle applies to people.

Context Isn’t Just for Code

At the beginning of my career, I used to think the key to building a strong team was hiring talented people and getting out of their way. That works, sometimes. But more often, I saw inconsistency, dropped balls, and missed opportunities.

It wasn’t about effort or intelligence. The context was missing.

When a team member doesn’t have the full picture, they guess. They hesitate. They move slower. They duplicate work. And then they get frustrated and disengaged.

So What Does That Look Like❓

Here’s how I started applying my CLICK framework to engineer context within teams:

  • Clear Purpose

At the heart of every high-performing team is a shared, compelling purpose. And it is all about ensuring every team member understands why their work matters.

  • Linking Connections

Building strong, trusting relationships both within the team and with key stakeholders. Context is not just the team – it’s the bigger organization, its clients, communities, and ecosystems.

  • Integrated Work

Establishing clear norms and processes so teams can operate independently. When everyone knows how work flows, they can act without constant oversight.

  • Collaborative Decisions

Establishing clear decision-making frameworks ensures teams can act decisively and cohesively. No more waiting for top-down approvals.

  • Knowledge Sharing

Creating an environment where knowledge flows freely and feedback is embraced leads to innovation and growth. Context compounds when it’s openly shared.

None of this was revolutionary. But it changed everything for teams that use this approach.

What Happens When You Get This Right

When people are in the right context, they:

  • Make decisions faster
  • Collaborate more effectively
  • Take ownership without waiting for approval
  • Feel more connected to the mission

They stop acting like isolated nodes and start working like a true network.

And yes, it’s a little more work upfront. But it’s a lot less cleanup later.

TL;DR? Context is Everything

Whether you’re building agents or leading teams, the lesson is the same: garbage in, garbage out. If we want teams (or tech) to perform, we need to feed them better. And that means engineering the right context, not just reacting to outcomes.

If you’re curious about how to put CLICK into action, my book is in the full publishing process and will be available on Amazon in September.

That’s all for today.

See you next Thursday.

PS – I’ll be sharing a behind-the-scenes look at how I use CLICK with client teams in upcoming emails. Make sure you’re signed up, and feel free to forward this to a colleague who could use a little more context magic in their team life.

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