The command-and-control approach to management has in recent years become less and less viable. Globalization, new technologies, and changes in how companies create value and interact with customers have sharply reduced the efficacy of a purely directive, top-down model of leadership. What will take the place of that model? Part of the answer lies in how leaders manage communication within their organizations—that is, how they handle the flow of information to, from, and among their employees. Traditional corporate communication must give way to a process that is more dynamic and more sophisticated. Most important, that process must be conversational.

We arrived at that conclusion while conducting a recent research project that focused on the state of organizational communication in the 21st century. Over more than two years we interviewed professional communicators as well as top leaders at a variety of organizations—large and small, blue chip and start-up, for-profit and nonprofit, U.S. and international. To date we have spoken with nearly 150 people at more than 100 companies. Both implicitly and explicitly, participants in our research mentioned their efforts to “have a conversation” with their people or their ambition to “advance the conversation” within their companies. Building upon the insights and examples gleaned from this research, we have developed a model of leadership that we call “organizational conversation.”

Smart leaders today, we have found, engage with employees in a way that resembles an ordinary person-to-person conversation more than it does a series of commands from on high. Furthermore, they initiate practices and foster cultural norms that instill a conversational sensibility throughout their organizations. Chief among the benefits of this approach is that it allows a large or growing company to function like a small one. By talking with employees, rather than simply issuing orders, leaders can retain or recapture some of the qualities—operational flexibility, high levels of employee engagement, tight strategic alignment—that enable start-ups to outperform better-established rivals.

In developing our model, we have identified four elements of organizational conversation that reflect the essential attributes of interpersonal conversation: intimacy, interactivity, inclusion, and intentionality. Leaders who power their organizations through conversation-based practices need not (so to speak) dot all four of these i’s. However, as we’ve discovered in our research, these elements tend to reinforce one another. In the end, they coalesce to form a single integrated process.

Intimacy: Getting Close

Personal conversation flourishes to the degree that the participants stay close to each other, figuratively as well as literally. Organizational conversation, similarly, requires leaders to minimize the distances—institutional, attitudinal, and sometimes spatial—that typically separate them from their employees. Where conversational intimacy prevails, those with decision-making authority seek and earn the trust (and hence the careful attention) of those who work under that authority. They do so by cultivating the art of listening to people at all levels of the organization and by learning to speak with employees directly and authentically. Physical proximity between leaders and employees isn’t always feasible. Nor is it essential. What isessential is mental or emotional proximity. Conversationally adept leaders step down from their corporate perches and then step up to the challenge of communicating personally and transparently with their people.

This intimacy distinguishes organizational conversation from long-standard forms of corporate communication. It shifts the focus from a top-down distribution of information to a bottom-up exchange of ideas. It’s less corporate in tone and more casual. And it’s less about issuing and taking orders than about asking and answering questions.

Conversational intimacy can become manifest in various ways—among them gaining trust, listening well, and getting personal.

Gaining trust.

Where there is no trust, there can be no intimacy. For all practical purposes, the reverse is true as well. No one will dive into a heartfelt exchange of views with someone who seems to have a hidden agenda or a hostile manner, and any discussion that does unfold between two people will be rewarding and substantive only to the extent that each person can take the other at face value.

But trust is hard to achieve. In organizations it has become especially difficult for employees to put trust in their leaders, who will earn it only if they are authentic and straightforward. That may mean addressing topics that feel off-limits, such as sensitive financial data.

Athenahealth, a medical-records technology provider, has gone as far as to treat every last one of its employees as an “insider” under the strict legal meaning of the term. Insiders are defined as employees entrusted with strategic and financial information that could materially affect the company’s business prospects and hence its stock price—a status typically accorded only to top-tier officers. Opening the books to such a degree was a risky move, discouraged by the company’s underwriters and frowned upon by the SEC. But Athenahealth’s leaders wanted employees to become insiders in more than just the regulatory sense; they wanted them to be thoroughly involved in the business.

Listening well.

Leaders who take organizational conversation seriously know when to stop talking and start listening. Few behaviors enhance conversational intimacy as much as attending to what people say. True attentiveness signals respect for people of all ranks and roles, a sense of curiosity, and even a degree of humility.

Duke Energy’s president and CEO, James E. Rogers, instituted a series of what he called “listening sessions” when he was the CEO and chairman of Cinergy (which later merged with Duke). Meeting with groups of 90 to 100 managers in three-hour sessions, he invited participants to raise any pressing issues. Through these discussions he gleaned information that might otherwise have escaped his attention. At one session, for example, he heard from a group of supervisors about a problem related to uneven compensation. “You know how long it would have taken for that to bubble up in the organization?” he asks. Having heard directly from those affected by the problem, he could instruct his HR department to find a solution right away.

Getting personal.

Rogers not only invited people to raise concerns about the company but also solicited feedback on his own performance. He asked employees at one session to grade him on a scale of A to F. The results, recorded anonymously, immediately appeared on a screen for all to see. The grades were generally good, but less than half of employees were willing to give him an A. He took the feedback seriously and began to conduct the exercise regularly. He also began asking open-ended questions about his performance. Somewhat ironically, he found that “internal communication” was the area in which the highest number of participants believed he had room for improvement. Even as Rogers sought to get close to employees by way of organizational conversation, a fifth of his people were urging him to get closer still. True listening involves taking the bad with the good, absorbing criticism even when it is direct and personal—and even when those delivering it work for you.

At Exelon, an energy provider headquartered in Chicago, a deeply personal form of organizational conversation emerged from a project aimed at bringing the company’s corporate values alive for its employees. Values statements typically do little to instill intimacy; they’re generally dismissed as just talk. So Exelon experimented in its communication about diversity, a core value: It used a series of short video clips—no fuss, no pretense, no high production values—of top leaders speaking unscripted, very personally, about what diversity meant to them. They talked about race, sexual orientation, and other issues that rarely go on the table in a corporation. Ian McLean, then an Exelon finance executive, spoke of growing up in Manchester, England, the son of a working-class family, and feeling the sting of class prejudice. Responding to a question about a time when he felt “different,” he described going to work in a bank where most of his colleagues had upper-class backgrounds: “My accent was different….I wasn’t included, I wasn’t invited, and I was made to think I wasn’t quite as smart as they were….I never want anyone else to feel that [way] around me.” Such unadorned stories make a strong impression on employees.