Introducing "The Conversational Firm"

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PREFACE

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one Thursday, more than two hundred of TechCo’s employees and most of its senior management team filed into an assembly room just off the company’s first floor atrium. TechCo (a pseudonym) is a social media marketing firm that sells software and services to help businesses promote themselves online by using everything from email to YouTube videos, from corporate blogs to Facebook and Twitter. Recently, customer satisfaction with the company’s software had declined, and customer churn (i.e., attrition) was on the rise. Folks were heading to an open meeting to discuss the issue.

In fact, the organization had been discussing the spike in customer churn for weeks now on its corporate wiki. TechCo’s COO, Keith, had posted over a hundred pages of customer survey and financial performance data online for everyone to see. The results were not pretty. Many corporate executives would shudder to disseminate such information so broadly, but TechCo executives regularly share this level of detail with the entire workforce, and employees typically respond with ideas, opinions, and questions. Ever since Keith’s post about churn, they had been doing just that.

To keep the conversation going, the company was now holding one of its “Hack Nights.” Hack Nights are voluntary events where employees share their ideas and, along with senior management, collectively hack away at T FOUR O’CLOCK

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problems they care about. This evening’s discussion was being led by three managers, all in their mid- to late twenties. Carolyn from sales, Alexis from consulting services, and Rob from customer support stood before the crowd chatting casually, waiting for the room to settle. After a few minutes, Carolyn stepped forward, greeted everyone with a familiar, “Hey guys,” and reminded them why they were there. Then she invited anyone with an idea to come to the front of the room and share it with the group.

The tightly packed room shuffled and shifted as thirty or so TechCoers made their way forward and formed a line. In the queue were a mix of entry-level employees hired in the last year, some longer-tenured employees, and even a few senior executives. Some worked in departments directly affected by the topic of the evening, but others were from departments more removed from the issue such as IT and personnel. One by one, people took the microphone and offered their suggestions.

After the last individual spoke, Rob addressed the crowd. He listed the topics just raised and assigned each to different corners of the room, instructing people to assemble around whichever one they wanted to discuss. At the end of the night, he explained, they would all come back together, and each team would have ten minutes to share its specific recommendations. Pausing for a moment, Rob smiled and said, “Are you all ready for a period of controlled chaos? Go to your corners!”

Almost instantaneously, loud music was piped in, and people began moving about the packed room in a human approximation of bumper cars.

At one point, it seemed as if the entire right half of the room was trying to move left, while the left half was trying to move right, leaving everyone stuck in place. Eventually the traffic jam broke and people found their way to their desired corners. The music and sheer number of people talking all at once made brainstorming in larger groups impossible. Employees took to writing their ideas on large flip boards instead and then breaking off into small groups of four or five, pulling chairs together and leaning in to hear one another above the din.

For the next several hours, they worked like this. Pizza arrived at some point and boxes surfed their way around the room, prompting short breaks as team members headed to the kitchen to grab beer from the company’s

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free-beer fridge. Around nine o’clock, after the group had reassembled and then dispersed, a few stragglers collected empty pizza boxes, flipped the assembly room lights off, and headed home.

From the chaos and free beer, to executives sharing information that others might conceal, to lower-level employees weighing in on high-level business issues, this is not what we expect to see in a conventional corporate environment. That is precisely the point.

“The old ways of doing things don’t work anymore,” TechCo’s CEO told me the first time we met. The “old ways” he was referring to were most everything we think of when we think of a conventional bureaucratic firm: vertical hierarchy, centralized decision making, formal rules and guidelines to control employee behavior, corporate communication that follows the rigid lines of the firm’s organizational chart, and a staid culture that stifles individual expression. Today more and more firms are questioning these ways as outmoded. At TechCo, the CEO explained, “We’re trying to build a postmodern organization that matches the new reality.”

That new reality is the social media revolution. Since its inception, social media has profoundly transformed not just how people communicate with one another socially but also how they communicate in and with firms.

Inside organizations, employees are increasingly digital natives who grew up with Twitter, Facebook, Instagram, SnapChat, and the like.1 Born between the early 1980s and the early 2000s, millennials are the fastest growing portion of the labor force and widely noted for their comfort and skill on social media and their preference for newer forms of communication like chat and text over older ones like the phone and email.2 They are accustomed to more open expression and dialogue than generations past, and they are carrying those expectations into the workplace.3 Others are too.

In the market, customers are no longer content to just download information about a company’s products or services from static corporate websites. They turn to social media to weigh in directly, sharing their opinions and experiences for hundreds, sometimes thousands, to see. When they do, they expect businesses to answer back on those very same platforms. Just like employees, today’s customers expect more open, ongoing dialogue from corporations.

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Across the corporate landscape, firms are trying to make sense of these cultural and technological changes. They are trying to determine what it all means not only for their business models but also for the very form and structure their organizations take. To investigate this myself, I decided to study TechCo up close, living inside the firm as an ethnographer for ten months.

TechCo offers a unique window into the changes being wrought by social media because it has been built in direct response to them. Its software and services are designed specifically to help businesses engage with customers on these new platforms. And, with a median employee age of twenty-six at the time of my study (and a workforce of approximately six hundred at that time), its internal organization has been built with the new generation of workers explicitly in mind. TechCo, in short, is a firm that has taken the spirit and tools of social media and embraced them as organizational philosophy.

Like many these days, TechCo executives talk about this philosophy in terms of “openness.” By their own account, they aspire to build a “radically open” organization that matches today’s world, and this book follows their attempt to do that. The coming pages take readers on a guided tour of TechCo and its open ways and spaces. We will encounter the organization’s open technological platforms, like its wiki and enterprise chat system.

We will observe its open gatherings like Hack Nights. We will visit the company’s offices, which are open in the physical sense that everyone sits in large workrooms with no walls or cubicles, and also open in the more figurative sense that employees come and go as they please, setting their own work hours and vacation schedules. Along the way, I will analyze what firms like TechCo actually mean by “openness,” and we will learn that, just as bureaucracy always has, openness has its own tensions as an organizing philosophy, and some things work better open than others.

Ultimately, I argue that TechCo has achieved its goal of building something new, but openness is not the right metaphor to understand their project, nor does it capture what is truly unique about our technological and cultural moment. At its heart, social media is a platform for voice and conversation, and therein lies its revolutionary potential for firms. By leveraging the spirit and tools of social media, TechCo has succeeded in building something that I call a “conversational firm.”

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As the description of the Hack Night illustrates, this conversational firm promotes far more employee voice than has been seen before. Across all of its open spaces and platforms, conversations take place that are entirely new to the corporate world. In the process, a more adaptive organization with a more engaged workforce emerges.

The conversational firm is not open in every sense of the word, nor is it entirely postbureaucratic. It does not have open participatory decision making, for one, and certain bureaucratic elements find their way back in, even after having been discarded for more open ones initially. Yet even if TechCo is not as radically open as some may hope or imagine it to be, the changes it has effected are real and powerful. By deconstructing what its project truly is, we will find ourselves deconstructing many long-held notions of the conventional corporate model along the way. In the end, this is the story of how one organization is finding its way to an achievable transformation of the firm in our conversational age. And that is something pretty radical.

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