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MIT Sloan professor explores new corporate communication model for Millennials

New book offers lessons on becoming a “conversational firm”

CAMBRIDGE, Mass., July 2016 – Is social media changing the way people communicate within firms? Do businesses need to adapt to meet the expectations of Millennials? According to MIT Sloan School of Management Prof. Catherine Turco, social media has led to the development of a new organizational model, which she calls the “conversational firm,” that facilitates more open dialogue across corporate hierarchy than ever before. In her new book, The Conversational Firm: Rethinking Bureaucracy in the Age of Social Media, she explores how a software firm successfully broke from traditional bureaucratic hierarchy by giving a voice to employees – and the lessons for other companies looking to make a similar shift

“An exciting finding was the realization that there is a new organizational model that companies can shoot for today,” says Turco, who spent 10 months embedded in a software company called “TechCo” (not its real name). “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."

A key insight in the book is the idea that hierarchy can be deconstructed in new ways. In the past, it was common for formal communication and decision-making structures to be closely aligned. At TechCo, Turco observed a different model that leveraged a wide range of social media tools and platforms, and responded to Millennials’ expectations for voice. The new model “dramatically opens up” the company’s communication environment, but does not disrupt conventional decision-making hierarchy.

In a conversational firm, Turco explains, executives share detailed business information with employees that previously was not distributed outside of senior leadership. Senior leaders encourage all employees to speak up about business issues, even if they fall outside of an individual’s specific job. However, the company retains a traditional decision-making hierarchy.

She also found that not all bureaucratic practices were deemed bad. “It was interesting 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.

To shift to this new model, firms must utilize today’s communication technologies. Turco points to TechCo’s use of a corporate wiki, an enterprise chat system, and physically open office space as examples. It also requires leaders who are committed to delegating voice rights and open to hearing employees’ opinions. 

“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, it’s worth the effort to become a conversational firm,” says Turco.

The MIT Sloan School of Management is where smart, independent leaders come together to solve problems, create new organizations, and improve the world. Learn more at mitsloan.mit.edu.