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A look inside a “conversational firm”

New book from MIT Sloan’s Catherine Turco examines one company’s quest to upend corporate bureaucracy.

By Kara Baskin  |  September 1, 2016

Is there room for more open corporate communication than ever before? Will the old guard let it happen? Should it?

Catherine TurcoCatherine Turco. Photo: Philip Borden

In her new book, The Conversational Firm: Rethinking Bureaucracy in the Age of Social Media, Catherine Turco explores how one software firm upended traditional bureaucratic hierarchy by giving all employees a voice.

Turco, an associate professor of work and organization studies at MIT Sloan, spent 10 months inside “TechCo”—the actual company name is kept anonymous—documenting daily activity, shadowing workers, sitting in on hundreds of meetings, and conducting interviews with 76 employees. What she found is a new way of communicating across old management structures, what she calls a “conversational firm.” And it may guide other companies through the shift in workplace culture as millennials grow in the workforce. In an interview, she explains her findings:

What new approach to communication did you find inside TechCo?
What most excited me was the realization that there is a new organizational model that companies can shoot for today. I believe this model has become possible—and perhaps even necessary—on account of the communication technologies now available and the habits and expectations that today’s employees bring into the workplace. I call the model the “conversational firm,” and it’s the idea that organizations can have far more open dialogue across the corporate hierarchy than we ever before thought possible.

The key insight underlying this idea is that hierarchy can be deconstructed in ways we haven’t previously seen or thought about. In the past, it was generally assumed that a firm’s formal communication and decision-making structures were tightly linked. Just think about how an organizational chart is taken to be a visual mapping of the formal lines of communication and decision-making authority.

However, I found something quite different when I looked carefully inside TechCo. There, I saw a firm that was leveraging a wide range of social media tools and platforms and that was responding to its millennial workforce’s expectations for voice by opening up the company’s communication environment quite dramatically. And yet it was doing so without destabilizing or disrupting a conventional decision-making hierarchy.

The Conversational Firm

When it came to communication, executives shared with the entire workforce detailed business information that other executives might pore over in senior leadership meetings but not distribute. The company’s executives also extended voice rights to everyone in the company by encouraging employees to speak up and weigh in on major business issues, not just those that concerned an individual’s specific job.

Meanwhile, the company still retained a fairly conventional hierarchy when it came to decision-making authority. It was as if voice rights and decision rights had been pulled apart from one another. Voice rights were delegated broadly, while decision rights were organized in a more conventional, hierarchical fashion. In fact, in a few cases when executives tried to delegate certain decision rights more broadly, employees used the voice rights they’d been given to speak up and note the problems this might cause. I was fascinated by what I was seeing, and I was also influenced by some brilliant work on the nature of hierarchy that my colleague Ezra Zuckerman has done.

Most interesting to me was the fact that this company, which was so vocal about rejecting conventional bureaucracy, ended up adopting some bureaucratic practices over time—but this happened precisely because employees used their voices to speak up and say when certain conventional practices that had been rejected would not be useful. It struck me that a whole new model was emerging, one in which cross-hierarchical conversation was a central mechanism for confronting business challenges.

How can an organization become a conversational firm?
For starters, it requires leveraging today’s communication technologies. TechCo had a very active corporate wiki on which executives and employees constantly communicated. It also had an enterprise chat system, and it was constantly adopting new tools to foster even more dialogue. Moreover, it had created a physically open communication environment to complement its digitally open one. People worked in wide-open workrooms with no offices or cubicle walls to separate them. Executives didn’t have offices, either; they sat with everyone else. Employees told me that this was especially important to them because it symbolized the sort of access and free-flowing communication they valued.

That said, building a conversational firm involves a lot more than just adopting a corporate wiki and taking down some cubicle walls; and it’s not easy to do. You need corporate leaders who really mean it when they say that they’re delegating voice rights and want to hear employees’ opinions. You need leaders who appreciate that the whole point of having a conversation is to surface a range of opinions. It won’t work if you tell people that you want their thoughts and then punish them when they speak up. Also, with open dialogue comes a lot of noise that many corporate executives might prefer to do without. But for executives who want more engaged employees and who want to be able to tap into the organization’s collective wisdom to confront business challenges when they arise, I think it’s well worth it.

How did this work at TechCo?
I think it’s easiest to explain by way of example. At one point, the company experienced a spike up in its customer churn. The executives could have hunkered down and tried to solve the problem in closed-door meetings among just themselves. But they didn’t. At the same time as they were thinking through the issue as a senior leadership team, they used the wiki to share over 100 pages of data on the issue with the workforce, and they encouraged employees to speak up and weigh in with questions, comments, and ideas. Then they took the conversation offline and held a “hack night,” where employees were invited to come and share their thoughts and work in small groups to “hack away” at the problem. Those groups continued to work together in the weeks that followed, using the wiki to update the rest of the organization on their progress and collect ongoing feedback. By promoting dialogue in digitally and physically open spaces like this, the company was able to turn the problem around quickly. In my opinion, that sort of rapid learning and adaptation is a unique strength of this conversational model.

What is the work relationship between millennials who came of age with social media and older generations of workers who did not?
From my conversations with millennial workers, I came to see that what they wanted most were voice and access. In reality, I think that’s what almost all of us want. Millennials are just particularly useful for revealing this desire because they display an extreme version of it in some sense. They were raised on social media tools and platforms that gave them more voice and access to information than prior generations had, and as a result, they have come to expect those things.

Describe “openness” in the workplace. Should we aspire to it?
Openness is a slippery concept because it’s so multi-faceted. It can mean participatory democracy. It can mean free-flowing communication. It can mean an organization without clear boundaries between itself and the external world. It can even mean surveillance.

Even though TechCo’s executives talked in terms of openness, I quickly realized that the word wasn’t the central metaphor for what I saw as truly unique about their evolving project. “Conversation” was more apt. Just like bureaucracy, openness solves some problems but creates others. At different stages of an organization’s life, different combinations of formal bureaucratic practices and more informal open ones might be necessary. The key is to have an open enough communication environment so that the organization can collectively surface the needs of the current moment and thoughtfully approach the next.