This study presents a novel approach to forest management in the Canton of Valais, Switzerland, where forests belong predominantly to the ’Burgergemeinden’ (local commoners’ organizations). These forests serve as vital common pool resources, crucial for ecological sustainability and historically managed in a local governance way. Facing increasing pressures from climate change and intensified local resource demands, this research employs a participatory, co-design methodology to develop a resilient forest management strategy. By aligning with Elinor Ostrom’s principles of commons management, the project focuses in this first step on identifying and classifying forest functions critical to community and ecosystem needs. In the initial phase of developing the forest management strategy, the Living Lab methodology was employed to integrate local stakeholders to identify and classify forest functions. Sixteen functions were identified and ranked by importance, with timber production, energy wood supply, and protective functions emerging as the most critical. Additionally, these functions were assigned to the four categories defined by law, enabling the identification of the forest’s environmental function as the most crucial.